Disney is combining its video game and toy divisions, reflecting the increasing overlap between the two with such projects as Disney Infinity, the less successful Imagicademy and the recently unveiled Playmation.
Announced Monday, the restructuring sees Disney Consumer Products and Disney Interactive merge to form Disney Consumer Products and Interactive Media, overseen by the heads of the former units. Although some employees will be shifted into new roles, The New York Times reports there won’t be any layoffs.
Disney Interactive slashed about 700 jobs on Thursday, more than one-quarter of its entire staff, as part of entertainment giant’s continuing battle to make its video game and Internet division profitable. Although the cuts had been anticipated for some time, few expected them to run that deep.
The Playdom group, which produces social-media games, is believed to be hit hardest. Disney purchased that company in 2010 for $563 million, an investment that clearly didn’t pay off.
Disney also plans to dramatically scale back in-house development of games, relying instead on outside licensing, which The New York Times characterizes as “a major shift in strategy.” The newspaper reports the company, which last year released about two dozen games, will reduce its output by 50 percent, and merge Playdom with the more successful mobile games unit.