Disney Infinity Canceled, Disney No Longer Publishing Games

Disney made a surprise announcement in its 2016 second quarter earnings. Disney Infinity has been canceled and the mega-corporation has dropped out of the games publishing business altogether.

The first hint came from Wall Street Journal reporter Ben Fritz who revealed the news via his Twitter account. Disney has canceled Disney Infinity and taken a $147 million charge against the company’s financials. The cancellation of the toy-to-life game also impacts developer Avalanche Software. The Utah-based developer is being closed, which will cost close to 300 jobs.

Here is the official line from the Disney financial press release:

“Items affecting comparability during the quarter ended April 2, 2016 included a $147 million charge in connection with the discontinuation of our self-published console games business, principally Infinity (Infinity Charge).”

And the official statement from Disney:

“After a thorough evaluation, we have modified our approach to console gaming and will transition exclusively to a licensing model. This shift in strategy means we will cease production of Disney Infinity, where the lack of growth in the toys-to-life market, coupled with high development costs, has created a challenging business model. This means that we will be shutting down Avalanche, our internal studio that developed the game. This was a difficult decision that we did not take lightly given the quality of Disney Infinity and its many passionate fans.”

Unfortunately, competition in the toys-to-life market became overwhelming in 2015. Activision’s Skylanders went with the hook of adding vehicles to the mix while Warner Bros. Interactive introduced LEGO Dimensions. Nintendo also successfully entered the crowded field with its Amiibo line of toys in 2014 and saw sales explode in 2015.

Sales of both Skylanders and Disney Infinity suffered. Disney obviously was not willing to weather out the difficulties and costs associated with publishing Infinity despite it being tied to hot properties like Star Wars and Marvel.

Disney already has a publishing deal with Electronic Arts for Star Wars. It will be interesting to see what other deals can be struck for Marvel and other franchises going forward.

Update: Disney Infinity Senior Vice President and General Manager John Blackburn posted additional information about the closer. The Alice Through the Looking Glass characters will still be released this month followed by the Finding Dory Play Set in June.

Our goal for Disney Infinity was to bring the best of Disney storytelling to life in homes around the world, and with your support we accomplished that. We hope you had as much fun playing the game as we had making it.

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And as we turn to the next chapter in our story, I want to thank everyone who helped bring Disney Infinity to life, particularly Disney’s Glendale-based production and publishing teams, our external development partners, and of course the incredible Avalanche team for their tireless dedication to this project.

But most of all, I want to again thank you for making Disney Infinity a part of your lives—and for adding to the Disney legacy by being a part of this community.