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Disney Interactive Revenue Slips On Lower Infinity Accessory Sales
Disney Interactive revenue fell 5 percent in the company’s first quarter of the 2015 fiscal year. However, operating income jumped by a significant 36 percent.
The company says that the sales decrease of $19 million from last year to $384 million is due to lower than expected sales of Infinity accessories and back catalog. However, starter packs for the Infinity series offset some of the losses (as those come with additional characters). Additionally, the marketing and per unit costs for Infinity 2.0 were higher.
The increase in operating income to $75 million during the quarter (up $20 million) is due to strength in the mobile business. Disney calls out Tsum Tsum and Frozen Free Fall as two titles that drove success. Additionally, costs were lower during this quarter due to fewer games in development.
[Source: Disney]
Our Take
Infinity is a key pillar of Disney Interactive’s business, as evidenced by earlier financial results. The franchise is still young, but it looks like adjustments to marketing spend and development costs might be in the offing. Selling starter kits is important, but they need to be gateways to families buying more figures. I expect we’ll see more focus on the benefits of expanding the collection when the inevitable third version arrives.
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