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Disney Results: Interactive Loss Shrinks Amidst Overall Profit Surge

While Disney reported profit up 55% for its latest quarter, its game-related interactive media division saw a slightly reduced loss, as Club Penguin revenues increased but R&D costs were also up.
While Disney at large reported a significant profit boost for its fiscal quarter, up 55%, its game-related interactive media division saw a slightly reduced loss, as Club Penguin revenues increased but R&D costs were also up. Though its media networks (television), parks and resorts, studio entertainment (films), and consumer products divisions all saw revenue increases for the quarter and half, Disney's interactive media business, made a loss for both periods, and was down in revenue for the half, year on year. Interactive media revenues for the quarter ending April 3, 2010 rose 20 percent year over year, but the division still lost $55 million -- a 10% gain, however, compared to last year's quarterly loss of $61 million. For the half, however, interactive media revenues were down 15 percent year on year, though losses narrowed by 39 percent -- $65 million for the half, versus 2009's $106 million for the same period. Overall, the Disney Interactive Media Group includes the firm's online game (Club Penguin, Toontown Online) and console game (Epic Mickey, Split/Second) areas, including notable console game studios like Junction Point, Wideload, Black Rock and Propaganda. In its financial statement, the company said that Club Penguin subscription revenue increases and lower game inventory costs drove the improved operating results, but this was offset by higher costs for developing and marketing internet-based product. Overall, the success of its Alice in Wonderland film with Tim Burton, which has brought in $962 million in worldwide box office to date, was a major high point for Disney, with sports network ESPN continuing to bring increased revenues as well. The company acquired Marvel during this period, and also expects a big boost next quarter from the release of the Iron Man 2 movie -- although the video game version is published by Sega, so any gains will purely be on licensing revenue. Revenues for Disney overall during the quarter increased 6 percent year on year, from $8.1 billion to $8.6 billion. Overall, the company showed an impressive 55 percent increase in profits to $953 million.

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