May 24, 2016 – When Disney announced the shutdown of its popular Disney Infinity game line earlier this month, widespread surprise and questions arose. The “toys to life” franchise, which pairs collectible toys with digital games, was profitable. Just several months earlier, Disney Infinity had reported an estimated $200 million in revenue from the series’ third Star Wars-based installment. Fans and game critics alike, such as IGN, Polygon and Yahoo, had largely praised Disney Infinity 3.0, which launched late last year.
So why the sudden and unexpected closure? Some Disney blogs are speculating that the huge cost overruns and demands of the new Shanghai Disneyland (official opening date: 16 June 2016) may have helped contribute to Disney Infinity’s shutdown.
Under construction by Walt Disney Parks & Resorts, Shanghai Disneyland is a joint venture between Disney (43% shareholder) and Shanghai Shendi Group (57% shareholder), a conglomeration of Chinese state-owned companies. Construction began in April, 2011.
As Mainland China’s first Disney theme park, Shanghai Disneyland has gone over budget and behind schedule, missing an intended Spring 2016 opening (now rescheduled for June 16th). In February, 2016, Disney CEO Bob Iger reportedly ordered the U.S.-based resorts (Disneyland and Walt Disney World) to make budget cuts, which led to reductions in employee Cast Members’ hours, staffing, theme park hours and other cutbacks.
Approximately three times the size of Hong Kong Disneyland (opened 2005), the total construction budget for Shanghai Disney Resort is expected to be U.S. $5.5 billion for the theme park plus other scheduled construction – two themed hotels, an entertainment district, a lake, parking and transportation hubs.
The 90-minute preview video below shows a soft-opening of the theme park for Cast Members, their families and invited members of the public.
So how accurate is the speculation that the financial demands of Shanghai Disneyland contributed to Disney Infinity’s demise? We may never know for sure. But according to Forbes, the more likely answer may be that Disney decided to ditch its in-house game division, Avalanche Studio, as a cautious long-term business decision.
It’s not that Disney’s Avalanche Studio was performing poorly. Rather, Disney has decided that offering licenses to other game developers reduces Disney’s cost-exposure. Disney already has other game licensing deals, including for its Marvel’s superheroes, Pixar characters, Star Wars and Disney’s homegrown animated stars. Disney owns them all.
While fans of Disney Infinity might be tempted to point the finger of blame at the money demands of Shanghai Disneyland, the truth is that the Walt Disney Co. is doing what it does best: Looking at its quarterly spreadsheets, cutting loose less-profitable enterprises, and exploring ways to further expand its empire.