In news surprising for its scale if not, unfortunately, its occurrence, the Disney Game and Internet Division — better known as Disney Interactive — has laid off around 700 employees today. The strong performance of Disney Infinity last year helped improve the financial performance of the group, but ongoing issues in some areas have led to a dramatic reduction in workforce of around 26%.
As reported by The New York Times, areas of strength for the company are currently in console games — primarily Infinity — and mobile products in Japan. Strategic moves include merging the successful mobile division with the struggling social games area, while internal development on all games will be reduced with a greater focus on external licensing; game production will also be reduced by around 50%, following the division's release of over 20 games last year that included some relative flops. Disney Interactive President James A. Pitaro said the following.
These are large-scale changes as we focus not just on getting to profitability but sustained profitability and scalability.
We’re not exiting any businesses, and we will pursue licensing partnerships in which we retain a lot of creative input. But this is a doubling down on mobile and an effort to focus much more intently on a core set of priorities.
At the same time we are reducing our focus in some areas, we are making strategic investments in others, and the Japan business is one.
These lay-offs are unlikely to affect successful products such as Disney Infinity, but will reduce — as indicated above — the division's overall output. Our best wishes go to those affected by today's job losses.