Disney confirms "restructuring process"

By Wesley Yin-Poole Published 25 January, 2011

Half of staff at interactive division axed.

Disney has confirmed a "restructuring process" at its Interactive Media Group – owner of Epic Mickey creator Junction Point and Split/Second maker Black Rock - that marks its transition from a boxed game publisher to a digital publisher.

Half of Disney Interactive Studios' 700 staff may have been cut, overnight reports suggest.

"As part of setting a strategic direction for future success in the digital media space, the Disney Interactive Media Group today began a restructuring process," Disney said in a statement issued to Variety.

According to Variety staff expected the cuts.

Last year Disney Interactive boss Steve Wadsworth left the company. He was replaced by Yahoo exec Jimmy Pitaro and John Pleasants, CEO of Playdom, the online game company Disney bought for an eye-watering $763 million in late July.

Then, in November, Disney Games boss Graham Hopper left after eight years of service.

Disney CEO Bob Iger said Pleasants would not only "focus on turning those businesses into profitability but diversifying our presence in the business, so we're not reliant on one platform that's obviously facing challenges".

Variety notes that Pirates of the Caribbean: Armada of the Damned, which Disney had invested millions of dollars in and which was far along in the development cycle, was cancelled without explanation. Propaganda, the developer behind it, was later closed.

Movie tie-in Tron: Evolution flopped and Wii-exclusive Epic Mickey, which sold 1.3 million units in December 2010 in the US, is reported to have performed below expectations.

Eurogamer has requested comment from Disney.

Picture of Wesley.

About Wesley Yin-Poole

Wesley is Eurogamer's news editor. He likes news, interviews, and more news. He also likes Street Fighter more than anyone can get him to shut up about it.

Read more articles from Wesley by visiting the Wesley Yin-Poole archive page.

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Comments (20) Latest comment 1 year ago

Comments for this article are now closed, but please feel free to continue chatting on the forum!

  • Murton #1 1 year ago

    Why should changing from a retail publisher to a digital publisher affect developer staff levels? I can see why a few middlemen in the procurement department would go, no need to have a team for negotiating disc printing and the like, but developers? QA? These guys have nothing to do with the publishing side of the business.

    Restructuring my eye. Poor management is the reason behind these layoffs. Inefficient management of human resources. These people worked hard and release their respective titles, and did a bloody good job I should add, but no follow on project had been planned so they're getting binned. For shame Disney Interactive, for shame.

  • Jonathan_Fakenham #2 1 year ago

    If this means that Black Rock goes down, that's a damn shame. Split/Second was a seriously awesome game.

  • Chris Gardiner #3 1 year ago

    1.3 million units is "below expectations"?

    May need to take a look at those expectations, Mr. Mouse.

  • X3Entente #4 1 year ago

    its ironic that nintendo, a company whos sole existence is in video games is willing to take bold risks with game design when a multi billion dollar company like disney which is immune with its financial security doesnt have the balls to even dip their toe in, and are seeminlgy governed by a committe of risk averse focus group obsessed suits. The only disney game i bought was buzzlight year of star command for pc omg what an epic fail that was, although bioware ripped of the design of wrex from Booster Sinclair Munchapper
    [link url=http://disney.wikia.com/wiki/Booster_Sinclair_Munchapper
    ]http://disney.wikia.com/wiki/Booster_Sin...[/link]

  • DreadedWalrus #5 1 year ago

    My PC is undergoing restructuring. I just removed half the components and called it a day.

  • midnight_walker #6 1 year ago

    If they were expecting to sell more than 1.3 million units, then perhaps Epic Mickey should not have been a Wii exclusive.

  • Lexx87 #7 1 year ago

    Black rock better stay on!!

  • mkreku #8 1 year ago

    How on earth is 1.3 million in just one country "below expectations"? That's a problem with the expectant, not the game (or studio)!

  • MadDave123 #9 1 year ago

    Another one bites the dust. Le sigh

    T_T

  • CrunchinJelly #10 1 year ago

    Sell Black Rock back to Climax or something. :(

  • Subdominator #11 1 year ago

    1,3 million is weak if it's the only market where your game sells. Reports from the UK and continental Europe suggest that Epic Mickey failed here. If it's true that Junction Point had 250 people that means they had development costs of more than 30 million dollar. Add to that the marketing budget and you have to sell a lot of games to break even.

  • Subi #12 1 year ago

    I think those expectations must have including the ending of war and world hunger...

  • Paulie_P #13 1 year ago

    Is there any way to pin this on Bobby Kotick and Activision?

    In all serioiusness though, its a shame for the people who are losing their jobs.

  • arcam #14 1 year ago

    Is there any way to pin this on Bobby Kotick and Activision?

    Yep. Call of Duty and Guitar Hero have wildly skewed everyone's expectations of how much money a game can and should make ;)

  • spitfire1945 #15 1 year ago

    Actually the game sold 1.7 million worldwide. If we put a (medium) 45$ price tag that would make Disney 76.5M bucks.
    Did that game really cost that much to make?
    Diseny is really not having a good marketing strategy in VG business.

    Oh, and by the way, buying Playdom for $765 million is PURE MADNESS.

    Sad for BR and JP studios, they don't deserve this. :'(
    Pure, Split/Second and Epic Mickey were really good games.

    @arcam: LOL. That was a good one!
    Edited by spitfire1945 at 25/01/11 @ 11:31

  • Paulie_P #16 1 year ago

    +1 arcam, lol I didn't think it could be done!

  • oreillymj #17 1 year ago

    Bringing in executive "talent" from Yahoo! will surely turn around Disney Interactive.
    This is basically the suits moving some of their mates in and shedding staff to make the analysts/shareholders think they have a clue.
    If I was in to 50% of staff left there I'd be working on my CV today.
    Edited by oreillymj at 25/01/11 @ 12:01

  • TonyHarrison #18 1 year ago

    That's 1.3million (plus whatever it sold in the rest of the world, which probably puts it closer to 2million) in one month. A game like this won't stop selling, especially on the Wii where games like this can sell well for years. It isn't like COD which can sell phenomenally in a few days and then slowly but surely tail off.

    It's incredibly short sighted if they're saying the game didn't meet expectations based on such a short amount of time.

  • Bleemo #19 1 year ago

    "Actually the game sold 1.7 million worldwide. If we put a (medium) 45$ price tag that would make Disney 76.5M bucks.
    Did that game really cost that much to make?"

    Publishers don't walk away with the full whack mate, platform holders take $12 and retailers take $12, then there's shipping costs. Traditionally a publisher walks away with $36 per unit on a 360/PS3 game and slightly less on a Wii game. Therefore a game that has sold 1.7m units has made $61m. However we only have VG charts claim that the game sold this and they have been massively wrong so many times its hard to take it seriously.

    Also Spector claimed on the Bonus round that he had a team of 230 people on Epic Mickey and the game took 3.5 years to make. Even though the team size would have varied from year to year even a 100 person team being paid $80k-$100k per annum will lead to dev costs of $18-$20m over two years so imagine more than that over 3.5 years. Then there is marketing on top of that, traditionally 15-20% of overall dev costs. So lets say this game cost $30m, not that surprising when SMG cost $25m and didn't have the animated cut scenes that Epic Mickey did. Then they decide to go for it and put $6m in marketing into it, so they spend $36m. So by those numbers and even if vgchartz is right the game has made a profit $27m, a fortune to you and me but piddly shit to a billion dollar company like Disney who own Pixar amongst other things.

    This was probably made worse by the fact Spector claimed the game was a contender for game of the year in a year in which Mass Effect 2, Starcraft 2 and Red Dead Redemption had already been released no less. he also said the game had the best graphics on the Wii which clearly isn't true. So imagine the suprise to the shareholders when the game was a flawed but sometimes enjoyable game that managed a meta of about 75% and deserved it too.
    Edited by Bleemo at 25/01/11 @ 13:06

  • spitfire1945 #20 1 year ago

    @Bleemo: Ok, yeah. Your post really is clarifying. I agree with what you said. Still a pity though. Disney is not a small firm that can only take some hit before going down and to get up and running into the VG business takes quite a while and lots of money. If they thought that they could make cheap cash without too much effort then it is clear that they didn't have any idea on how to tackle this industry. They should have tried harder, especially since all the IP's they made were new and it takes at least a couple of iteration to really see if a brand can prove to be successful.
    The alternative is try to milk some of the proprietary IP's that Disney have.