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Disney Interactive Losses Up Slightly On Continuing Playdom Acquisition Costs

Disney Interactive remained the only segment of the media giant to show an operating loss for the 2010 holiday quarter, as costs from the Playdom acquisition continue to drag down earnings.
Disney Interactive remained the only segment of the media giant to show an operating loss for the 2010 holiday quarter as the effects of the company's $763 million acquisition of social game maker Playdom continue to drag down earnings. Though revenue for the Interactive Media division was up 58 percent year over year to $349 million for the company's first fiscal quarter, which ended December 31, losses were up 13 percent to $13 million. Those losses had been shrinking throughout the 2010 fiscal year. Sales of console titles were up significantly for the holiday period, Disney said in an earnings statement, with 2010 games like Epic Mickey and Toy Story 3 selling favorably compared to 2009 holiday releases including Sing It Pop Hits and Tinker Bell and the Lost Treasure. But those increased console sales "were more than offset by the inclusion of results for Playdom in the current quarter, which reflected the impact of acquisition accounting," the company said. Last month saw Disney's video game-making arm shut down Tron: Evolution developer Propaganda Games and undertake reportedly significant layoffs as the company restructures its game business around more casual and social titles. Income for Disney as a whole was up 40 percent for the quarter, to $2.2 billion, demonstrating particularly strong growth for the company's media networks and studio entertainment businesses.

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