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Disney Pulls Plug On Infinity Series Costing Company $147 Million

The toys-to-life genre has its first major casualty. Disney has announced a $ 147 million charge related to its self-published console games business and the cancelation of its Infinity series.

Specifically cited in the company’s second quarter earnings release is that the cost is “principally Infinity” such that the charge is named the “Infinity Charge.” We already knew the game was skipping a year, focusing instead on a few new playsets.

This is the first we’ve heard that the plug is being pulled entirely. A note in the earnings statement also indicates that the $ 147 million charge includes employee severance and inventory write-down.

Disney’s game publishing arm, which appears to be defunct at this point, is part of the Consumer Products & Interactive Media division. That group saw a dip of 2 percent year-over-year for the quarter, but is up 4 percent at the half-year mark.

We’ve reached out to Disney for more information, including regarding any staff affected by this news. We’ll update should we learn more.

Update: Disney is also shuttering Infinity studio Avalanche, which has been in business for 20 years. The studio employed approximately 300. 

“After a thorough evaluation, we have modified our approach to console gaming and will transition exclusively to a licensing model," says Disney consumer products and interactive media chairman Jimmy Pitaro. "This shift in strategy means we will cease production of Disney Infinity, where the lack of growth in the toys-to-life market, coupled with high development costs, has created a challenging business model.  This means that we will be shutting down Avalanche, our internal studio that developed the game.  This was a difficult decision that we did not take lightly given the quality of Disney Infinity and its many passionate fans.”

Update 2: On Disney's earnings call this afternoon, chairman and CEO Bob Iger explained more about the company's decision to close down Infinity production. "We thought we had a really good opportunity to launch our own product in that space, "Iger said. "I realize it was console space, but it was also essentially– a large component of it was the toys-to-life, they call it toys-to-life business. In fact we did quite well with the first iteration of it, and we did okay with the second iteration. But that business is a changing business and we did not have enough confidence in the business in terms of it being stable enough to stay in it from a self-publishing perspective.

Iger reinforced the financial earnings report that attributed much of the write-down to lingering Infinity inventory. "You know that you take on substantially more risk, particularly when it comes to manufacturing and managing the inventory, the toy inventory, of that business," he said. "In fact, as Christine noted, a good part of the write-off that we just announced comes from having to write off that inventory that we took responsibility for when we went into the publishing business. We just feel that it's a changing space and that we're just better off at managing the risk that that business delivers by licensing instead of publishing. It's just that simple. We actually made a good product. I give the developer a lot of credit for the product that they made. It was extremely well-received. But we knew going in that there would be a lot of risk with this product and the fact that we did so well initially gave us the confidence to continue with it. The truth of the matter is that the risks that we saw at the beginning when we started this caught up with us."

[Source: Disney]

 

Our Take
Infinity had a solid run, but Toys to Life is an expensive genre. It's a shame that Disney, with its familiar properties, wasn't able to go long on the franchise. Our thoughts are with any individuals affected by this.

www.GameInformer.com – The Feed

Konami Sales And Profits Up As Company Turns Away From Console, PC Development

Konami has closed out its fiscal year, and the company has some good news for investors. If you’re hoping to hear about new Contra, Metal Gear, or Castlevania though, we don’t have anything significant to report.

You can expect a new Pro Evolution Soccer this year. And if you play Yu-Gi-Oh (with physical cards), those aren’t going anywhere.

However, most of Konami’s focus in its financial earnings report is on gambling, health, and mobile. Fitness revenue dipped by 2.8 percent. Pachislot and pachinko revenue fell by 17.8 percent. The gambling division climbed by 1.4 percent.

In contrast, digital entertainment revenue (console, PC, mobile, and the Yu-Gi-Oh card game) revenue climbed by 36.8 percent in the fiscal year, in part due to strong sales of Metal Gear Solid V: The Phantom Pain.

Company-wide revenue was up 14.6 percent to ¥249.9 billion ($ 2.3 billion), with a major jump in operating income of 61.2 percent to ¥24.7 billion ($ 228.8 million). Net income grew, though modestly, by 5.6 percent to ¥10.5 billion ($ 97.6 million).

Despite the successes in fiscal year 2016, Konami expects revenues to decline in the new year. However, the company anticipates controlling expenses to raise net income for the period. this is in part due to a significant reduction in both revenue and expenses in the digital entertainment category. Revenues in other segments will drop slightly, though profits are anticipated to rise on cost control.

[Source: Konami]

 

Our Take
While Konami says it’s committed to Metal Gear, at this point it’s hard to see the publisher as a major player in the console and PC space. I wouldn’t expect Pro Evolution Soccer to disappear, and there might be the occasional handheld Yu-Gi-Oh game. But the days of Castlevania and Contra seem to be sadly behind us.

www.GameInformer.com – The Feed

Offworld Trading Company surpasses 100,000 sales

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Ant Simulator dev quits after partners allegedly blow company funds

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Sony Creates New Company To House Computer Entertainment And Network Entertainment

Sony has announced the creation of a new limited liability corporation that brings together the operations responsible for gaming hardware, software, content, and network services. Sony Interactive Entertainment LLC will be officially incorporated on Friday, April 1, 2016.

Andrew House (pictured above), who is currently CEO of Sony Computer Entertainment, will lead the new business. Shawn Layden, who is currently head of Sony Computer Entertainment America will handle Worldwide Studios.

This leaves us to ask where this leaves current president of worldwide studios Shuhei Yoshida. We’ve inquired about his role in the new corporate structure and will update should we receive a response.

In addition to hardware, game software, and PlayStation Network operations, Sony Interactive will also handle PlayStation Vue, PlayStation Now, PlayStation Music, and original content like the show Powers.

We’ve also asked Sony to clarify if this impacts the current regional structure upon which the PlayStation unit operates. Again, we’ll update once we understand how the new LLC impacts global operations.

The new business is targeting an increase in operating income of five to six percent by the close of fiscal year 2018. The company anticipates sales ranging from ¥1.4 trillion ($ 11.8 billion) to ¥1.6 trillion ($ 13.5 billion) for that same 12-month period.

Sony Interactive Entertainment will be based in San Mateo, California. 

Update: Shuhei Yoshida has shared via Twitter that his title, president of worldwide studios, will not be changed. He will now report to Shawn Layden, who appears on the organizational chart above as lead for that area. 

 

Our Take
This is a significant shake-up for Sony, but one that evidences the power of the company’s gaming operations. Putting everything under one roof will facilitate strategic decisions that consider the wider PlayStation ecosystem. The only questions that remain are about staffing, as there are clearly some adjustments being made at the start of Sony’s next fiscal year on April 1.

www.GameInformer.com – The Feed

Former Daybreak CEO John Smedley’s New Company Cancels Limping Kickstarter

Last week, former Sony Entertainment Online and Daybreak CEO John Smedley announced his new company, Pixelmage. At the same time, the studio launched a Kickstarter campaign. The dream isn’t over, but the Kickstarter is.

Smedley announced on Twitter today that the campaign was over. However, Hero’s Song, a pixel-art action-RPG will continue on.

An update on the Kickstarter page adds more details to the reasoning.

Hello Everyone,

After looking at our funding levels and the reality that we aren't going to reach our funding goals, we've decided that the best thing to do is to end the Kickstarter. We sincerely appreciate all of the support we got from the backers and the Kickstarter community. This was our first Kickstarter and we made mistakes along the way. I want to acknowledge that right up front. We put a lot of time and effort into the Kickstarter, but it's obvious missing things like physical goods hampered our efforts. It's also fair to say because we're early that we didn't have enough gameplay to show the game off enough to get people over the hump.

So where do we go from here? Well the good news is that our Investors are backing us all the way and we're going to get Hero's Song done exactly when we said we would. I'm also happy to say that we've been able to do this without having to take money from publishers, something that was of key importance to us so that we could remain in creative control.

We'll be updating you all along the way.. holding development streams (on Cohhcarnage's stream on Twitch) and being completely transparent with our development process. You'll be hearing from us all the time and we'll be updating our website and all of you on a constant basis as we have cool stuff to show.

Thanks again for all the support you've shown, and thanks for the constructive criticism as well. We took that to heart and we've learned a lot from it.

Kickstarter remains an incredible source of both goodwill and community support, and we'll never forget the kindness our backers showed us.

Thanks and we'll see you soon!

Smed and the Pixelmage Games Team.

With Pixelmage continuing on, those who were interested in playing Hero’s Song will still get their chance later this year. For more on the project, you can check out our earlier coverage.

[Source: Kickstarter]

 

Our Take
While I’m glad for Pixelmage that it will be able to continue development, this raises some questions for me about developers using Kickstarter. Investors are stepping in to fill the hole left by the Kickstarter campaign's cancelation, indicating that they had the wherewithal and interest from the beginning. Their (assumed) additional backing also isn’t spurred by a flurry of community support, as the campaign wasn’t going to hit its target. 

In some cases, Kickstarter is a natural fit. However, when things like this and Comcept’s Red Ash campaign come about, it’s hard to look at the situations and believe the developers needed the community’s cash.

www.GameInformer.com – The Feed

Longtime BioWare Writer David Gaider Leaves Company

If you've enjoyed BioWare characters like HK-47, Cassandra, and Dorian, you might need to sit down for this one. David Gaider, the writer responsible for those characters (and a stable of others) has left BioWare after 17 years.

The announcement came from Gaider himself over Twitter this morning.

In addition to writing individual characters, Gaider also helped create the whole Dragon Age setting, and he has written several Dragon Age novels. We already knew that he was moving on from Dragon Age to work on a new project, but now we'll just have to wait to see what's next for the writer.

Our Take
As a fan of Dragon Age and other BioWare franchises, this is a big deal. Even for those who don't recognize his name, Gaider has been helping to steer the narrative direction at BioWare for a long time. I have faith in the rest of the writing team at BioWare, but I can't ignore the fact that Gaider is the creative force behind some of my favorite characters in video game history. I hope that his next gig is still somewhere within the industry. 

www.GameInformer.com – The Feed

More Hints At Apple Joining Virtual Reality Race: Company Hires VR Researcher

Technology giant Apple already has already made some virtual reality related moves, like filing patents and acquiring technology. The company’s latest hire also points in the direction of developing VR that might compete with the likes of Samsung, Sony, HTC, and Oculus.

According to Financial Times, Apple has hired Doug Bowman, a former computer science professor from Virginia Tech whose research included three-dimensional user interfaces.

When (or if) we see the fruits of Apple’s forays remains to be seen, but with so many of its tech competitors venturing into the new space, the company isn’t likely to be left behind.

[Source: Financial Times]

 

Our Take
It's no secret that Apple is exploring options in VR. With no official announcements, saying exactly what form the technology will take is difficult. However, Apple is likely cooking something up.

www.GameInformer.com – The Feed

Square Enix Closing Cloud Gaming Company Shinra Technologies

Shinra Technologies, the recently founded cloud gaming company from Square Enix, is shutting its doors.

In a press release (translated by Gematsu), Square Enix said the young company's closure is due to a lack of third-party investors. As a result, the company will report an “extraordinary loss” of approximately ¥2 billion (~$ 16,800,000) for the end of its fiscal year in March.

Shinra Technologies was founded in 2014 and is affiliated with Just Cause 3 developer, Avalanche. The Final Fantasy VII reference of Avalanche and Shinra was not lost on the company, and we talked to them about the clever naming reference here. For more on Shinra Technologies, you can head here to learn about its now former intentions.

Update: We've removed the "report" tag from this story as Shinra Technologies' former production coordinator has confirmed the closure.

[Source: TDNet, Gematsu, @jeansnow, Gamasutra via @mochi_wsj, @Wario64]

 

Our Take
This is a big surprise considering Shinra was unveiled less than two years ago. The company never really got a chance to show off its technology publicly. It was founded on the idea of cloud computing being integral to the future of gaming, but now its unclear if cloud computing has a strong future. We hope all those affected by the company's closure are able to recover quickly.

www.GameInformer.com – The Feed