Disney is in the process of a division-wide layoff operation that is said will affect 200 staff.
Details of the company’s sweeping reorganisation have been drip-fed over the past few days.
It was first revealed on Thursday last week that the Mickey Mouse media conglomerate hasd shut down Tron developer Propaganda Games – a studio with enough staff to work on two projects simultaneously. There have also been reports of layoffs at Epic Mickey developer Junction Point.
Disney hasn’t revealed how many jobs it has made redundant, though a US newspaper pins the number to “about 200 people”.
The disastrous outcome comes weeks after Disney announced its Interactive Media division reported a loss of $234 million between July and September last year. This was despite revenues climbing to $762 million – an indication of the magnitude of investment Disney put into games.
Sales of recent releases Tron and Epic Mickey failed to replicate the success of the Toy Story 3 game, which stormed the charts in the summer last year.
The Los Angeles Times reports that the 200-odd layoffs will not mark the end of Disney’s reorganisation.
As part of the transition, Disney has called in Halo co-creator Alex Seropian to take charge of all development teams.
Club Penguin creator Lane Merrifield will take on increased responsibility for children and family games, whilst Adam Sussman, hired from EA Mobile this week, will head up a strategic marketing group.
In what is said to be an email to employees, Disney Interactive co-Presidents John Pleasants and James Pitaro said “reorganisations require very difficult decisions and this one is no different. We must continuously evaluate our structure and organisation and its needs in order to make Disney's digital content and businesses even more robust and successful.”
Brighton-based studio Black Rock is thought to presently be unaffected by the staff cuts.
Cowen and Co analyst Douglas Creutz suggested Disney has become increasingly frustrated with little return on its biggest ever push into videogames.
“Several years ago, they had said they were going to invest money to build a video game business. They have done that and with a couple of exceptions, they've really had very little success," he said.