Disney Interactive Layoffs To Begin: What Went Wrong?


As previously reported, there’s big layoffs happening at Disney Interactive. The writing was practically on the wall for the Disney owned company, as Disney Interactive lost over $200 million between economically challenged years. For the company the gap between 2008 and 2012 is being called a period of transition, but for some it will be the time frame employees can blame behind the massive layoffs.

As these layoffs take place this week we are left scratching our heads. No one can just blame it on the economy alone, because most of Disney’s subsidiary companies seemed to have bounced back since 2008, which is the year things started to go downhill for Disney Interactive.

According to the Wall Street Journal the media and gaming company is set to lay off several hundred of their employees in order to cut costs for the failing company. The number of layoffs that are expected to occur is a huge chunk in its staff, as the interactive company has around 3,000 employees total. The question remains, what went wrong with Disney Interactive? How can a brand that’s otherwise very successful in its marketing and identity fail?

Let’s look at the numbers:

According to a report Disney Interactive was the only company to decline when looking at the revenue brought in over the past year. As per Walt Disney’s most recent report, the Interactive company only took in $196 million over the first few months of the fiscal year. It’s a huge drop from an estimated $55 million from the previous year.

Target audience:

As Business Insider Kirsten Acuna points out, Disney Interactive’s huge problem is failing to cater to the right target audience. How can a company pick their revenue up when their sales are suffering due to the wrong focus? Although Disney has success with children, Disney Interactive is pushing out games like Epic Mickey, Cars 2, and Lego Pirates of the Caribbean. While these games are for a younger audience, this audience doesn’t have the bucks to spend on overpriced video games.

Popular video games such as Halo or Grand Theft Auto are wildly successful because they’re targeted to an older audience that has interest in the adult themes. Most importantly, they also have the bucks to spend on these games, and odds are they’re going to chuck Cars 2 for Grand Theft Auto every time.

Disney Interactive layoffs aren’t the first round of cuts by any means. In January of 2013, Disney Interactive let go 50 of its jobs and closed shop in its Austin, Texas location which housed Junction Point Studios. The developer was the same company behind the Epic Mickey video game. In January of 2011 Disney Interactive cut Propaganda Games, which was a studio responsible for the development of the Tron: Evolution video game. At the time the company laid off 200 people.

Despite these layoffs, chairman and chief executive of Disney, Robert A. Iger said that, “profitability at Disney Interactive has been a goal of ours in 2013.”

Let’s hope this time around they ditch Wreck-It-Ralph for a more adult themed brand.

Share this article: Disney Interactive Layoffs To Begin: What Went Wrong?
More from Inquisitr