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Disney Infinity is dead as Disney exits game publishing

Disney is effectively no longer a game publisher, and the company announced during its second quarter earnings that its toys-to-life franchise, Disney Infinity, would be discontinued. Disney's chairman of consumer products and interactive media, Jimmy Pitaro, indicated that the company would incur a $147 million charge as a result of the shutdown of Disney Infinity studio Avalanche; 300 employees are now out of work.

"This was a difficult decision that we did not take lightly given the quality of Disney Infinity and its many passionate fans," he said.

Disney said that it's now looking at the video games business exclusively as a licensing opportunity, so games based on properties it owns, like Star Wars, are of course still receiving games (such as those from EA), but Disney itself no longer has any interest in publishing them. The company also cited a "lack of growth" in the toys-to-life market. While the sector grew seven percent in the US in 2015, analysts have noted that the market could shrink in 2016, and clearly Disney Infinity was already feeling the pinch.

As for current Disney Infinity owners, Disney said it will still release the character playsets for the films Alice Through the Looking Glass and Finding Dory. Playsets for the upcoming Star Wars: Rogue One had been in the works, but those will never make it to retail now. It'll be interesting to see what moves Activision makes with Skylanders and how Nintendo's Amiibo line holds up in a shrinking toys-to-life market.

Overall, Disney's toy and gaming division saw sales drop two percent to $1.2 billion, while operating income declined eight percent to $357 million.

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