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Disney Results: Interactive Losses Shrink As Overall Revenue Increases

Walt Disney Company reported a 74 percent increase in revenues in its game-related division, thanks to Toy Story 3 and Split Second, but losses still totaled $65 million due to increased marketing costs.
Walt Disney Company reported a 40 percent overall increase in profit for its latest fiscal quarter, as the company’s game-related interactive media division saw a decrease in losses compared to the same quarter the previous year. Overall, the company's Interactive Media division saw a 74 percent increase in revenue from $113 million to $197 million, primarily due to Disney’s successful self-published titles such as Toy Story 3 and Split Second, though higher marketing costs for these projects largely offset this gain. Interactive media losses for the quarter ended June 27 were still at $65 million, a slight improvement over the $75 million losses from the prior-year quarter, but still in the red thanks to the aforementioned marketing costs. The Disney Interactive Media Group includes the firm's online games (Club Penguin, Toontown Online) and console games (Epic Mickey, Split/Second), including notable console game studios like Junction Point, Wideload, Black Rock, and Propaganda. In addition, recent acquisitions in the social and smartphone gaming space such as Playdom and Tapulous will bolster the company's results in this business sector in the future. Disney’s other divisions also experienced gains in revenue. The Studio Entertainment division, for example, received a major boost from well performing films such as Toy Story 3, Alice in Wonderland, and Iron Man 2, and cable sports network ESPN was again a highlight for the firm. Overall, Disney experienced a 40% increase in profit to $1.33 billion, with revenue reaching almost precisely $10 billion for the quarter, up 16%, and profit exceeding analysts’ expectations.

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