Disney Infinity is Officially No More, Ceasing Operations In June

In a shocking turn of events, Disney announced this afternoon that Disney Infinity is officially no more.

UPDATE #1: CEO Bob Iger has released comments, check update at the bottom

Here is the official statement from Disney,

By now you may have heard the news that we have made the difficult decision to discontinue production of Disney Infinity. From the beginning, Disney Infinity was built for you—our fans—and I wanted to take a moment to thank you not just for your support over the years, but for creating a community that made Disney Infinity more than just a game.

Our goal for Disney Infinity was to bring the best of Disney storytelling to life in homes around the world, and with your support we accomplished that. We hope you had as much fun playing the game as we had making it.

So what’s next for Disney Infinity? We have two final retail releases coming, including three new characters from Alice Through the Looking Glass later this month, and the Finding Dory Play Set launching in June.

And as we turn to the next chapter in our story, I want to thank everyone who helped bring Disney Infinity to life, particularly Disney’s Glendale-based production and publishing teams, our external development partners, and of course the incredible Avalanche team for their tireless dedication to this project.

But most of all, I want to again thank you for making Disney Infinity a part of your lives—and for adding to the Disney legacy by being a part of this community.

So what’s going on?

Disney posted their earnings report this afternoon, and it did not meet expectations. We knew the Toys-To-Life bubble was going to pop at some point, but obviously did not expect it to be now.

Here are some excerpts from an internal memo sent to employees today:

The team behind Disney Infinity created an incredible product. It was a critical success that inspired a deeply engaged community of players. But, despite Disney Infinity’s quality, it has become difficult to financially justify continued investment given the lack of growth in the toys-to-life market. Coupled with high development costs, the economics of our current vertical business model no longer add up.

In addition, Disney will also be closing Avalanche Software, the main studio behind the Disney Infinity franchise.

UPDATE #1: Bob Iger has released the following statements following the earnings call (via Game Informer)

On Disney’s earnings call this afternoon, chairman and CEO Bob Iger explained more about the company’s decision to close down Infinity production. “We thought we had a really good opportunity to launch our own product in that space, “Iger said. “I realize it was console space, but it was also essentially– a large component of it was the toys-to-life, they call it toys-to-life business. In fact we did quite well with the first iteration of it, and we did okay with the second iteration. But that business is a changing business and we did not have enough confidence in the business in terms of it being stable enough to stay in it from a self-publishing perspective.

Iger reinforced the financial earnings report that attributed much of the write-down to lingering Infinity inventory. “You know that you take on substantially more risk, particularly when it comes to manufacturing and managing the inventory, the toy inventory, of that business,” he said. “In fact, as Christine noted, a good part of the write-off that we just announced comes from having to write off that inventory that we took responsibility for when we went into the publishing business. We just feel that it’s a changing space and that we’re just better off at managing the risk that that business delivers by licensing instead of publishing. It’s just that simple. We actually made a good product. I give the developer a lot of credit for the product that they made. It was extremely well-received. But we knew going in that there would be a lot of risk with this product and the fact that we did so well initially gave us the confidence to continue with it. The truth of the matter is that the risks that we saw at the beginning when we started this caught up with us.”

More as the story develops…