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Disney Folds Infinity Console Video Game Business, Takes $147 Million Charge

Disney is getting out of the video game publishing business. The company disclosed Tuesday that it has scrapped its Disney Infinity-branded console games business, resulting in a $147 million charge against its fiscal-second quarter earnings.

The Infinity games venture bowed in August 2013 and was published by Disney Interactive Studios. The plan was to release a new edition of the game every year with a set of action figures accompany the console games. It was seen as a natural extension for the wealth of Disney-owned properties from Marvel, Lucasfilm and Pixar. Disney cited the discontinuation of the Infinity series in its fiscal second-quarter earnings release Tuesday.

Disney chairman-CEO Bob Iger acknowledged that the console video game arena was too much in flux for Disney’s liking.

That business is a changing business and we did not have enough confidence in the business … to stay in it from a self-publishing (operation),” Iger said. The write-off, he noted came from Disney having to manage the physical inventory of games. “We feel like we’re better off managing the risk that the business delivers by licensing instead of publishing.”

The initial 2013 Disney Infinity release did well enough but the subsequent titles saw a significant drop in sales, he said. “The risk caught up with us,” Iger said.

John Blackburn, Disney Infinity senior VP and g.m., said in a message sent via Twitter that Infinity would still release two more titles, “Alice Through the Looking Glass” this month and “Finding Dory” in June.

“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,” Blackburn wrote. There were online rumors that Disney will also shutter its Avalanche Software production facility in Salt Lake City.

Disney execs made it clear that the company is out of the video game publishing arena. “Going forward our console games strategy will focus solely on licensing our great portfolio of content,” said Disney CFO Christine McCarthy.

The news about Infinity comes as Disney earnings fell short of analysts expectations for the first time in two years. That sent the company’s shares down more than 6% in after-hours trading. Before the earnings news was releases, Disney shares closed up 1.2% for the day to $106.60.

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