VentureBeat, Disney said: “After a thorough evaluation, we have modified our approach to console gaming and will transition exclusively to a licensing model.
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 Software, 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.”
Disney will shuts down Avalanche Software with the loss of 300 jobs. Disney will incur a $147 million charge as a result of the shutdown of Disney Infinity studio Avalanche.
Two final releases are still planned for Disney Infinity, including three new characters from Alice Through the Looking Glass in May, and the Finding Dory Play Set this June. Playsets for the upcoming Star Wars: Rogue One had been in the works, but those will never make it to retail now.
Disney's toy and gaming division saw sales drop two percent to $1.2 billion, while operating income declined eight percent to $357 million.