Is Disney Scared of Activision?
Infinity will have to wait a while longer.
Disney's ambitious new video game that takes a page from Activision Blizzard's blockbuster Skylanders franchise has been bumped from its original June release date. The House of Mouse expects Infinity to hit stores in late August instead.
Delay or not, the company has high hopes for the new game, calling it a "big swing factor " on the profitability of its interactive business this year. Disney interactive managed to contribute just $9 million to Disney's operating profit last quarter, by far the lowest of its five business segments. And the unit has been a consistent money loser for the entertainment giant, yanking $216 million, $308 million, and $234 million in profits from its books over the last three years.
There are good reasons to think Infinity could turn that trend around, though. Activision pioneered the retail/digital gaming sector with its Skylanders game, to huge success. By hawking toy accessories as a key part of a console game, Activision has been able to power global sales of more than $1 billion for the franchise in a little over a year.
But the company isn't resting on that success. It has a big expansion of the franchise in the works, called SWAP Force, which will add the ability for players to interchange toy parts to create new characters and gameplay possibilities. In a clear nod to Disney's competitive threat, Activision executives had this to say in last month's earnings conference call: "While others are just entering the category that we created, we're moving that category forward by introducing yet another innovative new play pattern, dynamic swapability ."
Since it is just a short delay, Disney's move probably has more to do with the retail calendar than it does worries over the match-up against Activision. Still, a Disney executive told The New York Times that the delay will help the development process. "It gives us a little more time to add bells and whistles and make sure it really sings and pops ," he said.
Bells and whistles can't hurt, as this lucrative segment of gaming is about to get a lot more competitive.
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The article Is Disney Scared of Activision? originally appeared on Fool.com.Fool contributor Demitrios Kalogeropoulos owns shares of Walt Disney and Activision Blizzard. The Motley Fool recommends Activision Blizzard and Walt Disney. The Motley Fool owns shares of Activision Blizzard and Walt Disney. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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