Disney Interactive Returns To Profit After Layoffs Earlier This Year

Disney Interactive, the mammoth entertainment company’s video game division, suffered significant losses last fiscal year. The company spent its 2014 fiscal year reorganizing, which included the elimination of approximately 700 jobs.

The company has reported on its full-year financial performance, indicating a turnaround for the Interactive unit. Revenues for the year were up 22 percent from $1.064 billion to 1.299 billion year-over-year. Net Income jumped from a loss of $87 million last year to positive performance of $116 million in FY14. 

Disney attributes performance to Disney Infinity, a mobile game called Tsum Tsum, and a minimum guarantee on an unspecified games licensing contract. The latter could be related to mobile publisher DeNA, which recently released Star Wars Galactic Defense for mobile devices.

[Source: Disney]

Our Take
Disney has drastically re-oriented its gaming division, though it still has work to do. Disney Interactive has benefitted greatly from Disney Infinity and the general consumer interest in toys-to-life products. The company needs to start preparing for a world in which those toys pile up next to plastic instruments, or else it will find itself in financial trouble once more.