Disney Infinity: Can Buzz Lightyear and Jack Sparrow Save Video Games?

The video game industry has been on a downward slide for the past three years, but Disney (DIS) is about to pull a secret weapon out of its arsenal that could change that.

Come June, the family entertainment giant is rolling out Disney Infinity -- a console and PC gaming experience starring some of Disney's most iconic characters. This will be more than just a video game or a series of games. Disney Infinity features actual action figures that come to life in virtual realms when placed on a base that's connected to a PC or any of the three major video game consoles.

Aiming Higher Than Skylanders

If the premise of a console title where data-storing figurines are placed on a base to create a customized experience sounds familiar, you probably know about "Skylanders: Spyro's Adventure." This was one of Activision Blizzard's (ATVI) biggest sellers of 2012.

In Skylanders, players collect several dozen figurines that appear in the game the moment they are placed in the Portal of Power.

Disney plans to release three sets in June, featuring characters from "The Incredibles," "The Pirates of the Caribbean," and "Monsters University." You can be sure that Disney will roll out even more figures that will double as collectibles. The trailer that introduced the new gaming franchise shows Buzz Lightyear, Jack Skellington, Mater, Perry the Platypus, and other Disney animated favorites in action.

Yes, Disney is completely copying "Skylanders" in the setup of incorporating physical figures that are mounted into place. However, the gaming experiences will be entirely different. And while Disney Infinity is riding on Activision Blizzard's coattails in a sense, it's in the gaming company's best interests for Disney to succeed. If the House of Mouse has a hit here, Disney may be single-handedly saving the video game industry.

More Than Just a Game

"We're not aiming for the truck," Buzz Lightyear tells Woody near the climactic conclusion of "Toy Story."

They're flying -- detached from a rocket that's about to explode -- and Woody assumes that Buzz is trying to glide into the moving truck carrying Andy's toys. No. Buzz has bigger plans. He wants to join Andy in the car that's leading the moving truck.

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Disney Infinity, as in Buzz's famous "to infinity and beyond" quote, may be trying to do exactly that.

Aiming for a hit isn't enough. Disney has a shot to actually revive the industry here.
Video game sales have been sluggish for years. Industry tracker NPD Group recently reported that software sales through traditional retailers plunged 26 percent in December. It's an ugly trend that has shown no signs of stopping since 2009.

Diehard gamers are still turning out for major releases, but mainstream players are moving on to cheaper, social diversions. This is where Disney Infinity can change that. Young kids aren't asking their older siblings if they can borrow their Xbox 360s. They're asking to borrow their parent' Pads instead.

The attraction of Disney's beloved characters can change that, cultivating a new generation of gamers.

Use the Force, Disney

It's not just about the kids. Just wait until Disney flexes the muscles of its entire character portfolio. Disney Infinity could be fertile soil for the company's Marvel and recently acquired "Star Wars" franchises. It won't just be the small fry firing up their video game consoles to explore Disney's rendered realms.

It also doesn't have to stop there.

Since the figurines can store data, there's nothing stopping Disney from offering special features that can be used to enhance game play if players bring their figurines to special bases at its theme parks and Disney Store locations.

Yes, something as simple as a hot gaming franchise could also increase turnstile clicks at the company's theme parks and woo shoppers into its hundreds of mall stores.

Disney Infinity is going to be big for Disney, but it may be even bigger for the video game industry itself at a time when it could really use the validation.

Motley Fool contributor Rick Aristotle Munarriz owns shares of Walt Disney. The Motley Fool recommends Activision Blizzard and Walt Disney. The Motley Fool owns shares of Activision Blizzard and Walt Disney.