UPDATE: Disney has confirmed that they will be closing down Avalanche Software, the studio primarily responsible for Disney Infinity. Approximately 300 jobs will be cut. This message was also sent out as part of an internal memo, explaining some of the reasoning behind the canceling of the product and the shutting down of the studio:
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.
ORIGINAL STORY: Disney posted its quarterly earnings today, and it wasn’t as pretty as expected. While much of that had to do with a lack of success in media networks and parks/resorts despite huge Box Office successes, video games were also a part of the story.
The company said that “lower results” for Disney Infinity contributed to operating income in its consumer products and interactive media segment falling 8 percent year over year to $357 million. As a result, the company took a $147 million charge to cancel its Infinity video game line. Operations will cease in June.
To put it more simply: Disney Infinity was not as successful as it needed to be, and so it is getting canceled, effective next month. This is a bit surprising, considering the series always seemed to enjoy significant sales success. This is tough news for the many people out there who love the franchise. Combined with Skylanders’ falling sales, it looks like the toys-to-life market is getting just a bit too crowded.