Dis­ney is merg­ing two di­vi­sions

Los Angeles Times - - TECHNOLOGY - By Daniel Miller daniel. miller@ latimes. com Twit­ter: @ DanielNMiller

Walt Dis­ney Co. is merg­ing its in­ter­ac­tive and con­sumer prod­ucts di­vi­sions, high­light­ing new tech­nol­ogy’s abil­ity to erase bound­aries be­tween once dis­tinct busi­nesses.

The Bur­bank en­ter­tain­ment gi­ant al­ready of­fers prod­ucts that com­bine tra­di­tional play­things and dig­i­tal media, among them the video game fran­chise “Dis­ney In­fin­ity.” And the com­pany’s new line of wearable toys, called Play­ma­tion, will de­but this fall. Now, the de­vel­op­ment and pro­duc­tion of such of­fer­ings will be han­dled by a sin­gle busi­ness unit.

The new di­vi­sion, Dis­ney Con­sumer Prod­ucts and In­ter­ac­tive Media, will re­port f inan­cial re­sults as a com­bined en­tity start­ing in f is­cal 2016, which be­gins in Septem­ber.

It will be run by Les­lie Fer­raro, who last month was named pres­i­dent of Dis­ney Con­sumer Prod­ucts, and Jimmy Pi­taro, who has led Dis­ney In­ter­ac­tive since 2010. Fer­raro and Pi­taro will be co- chairs of the new di­vi­sion.

No lay­offs are ex­pected as a re­sult of the re­align­ment, a Dis­ney rep­re­sen­ta­tive said.

Dis­ney In­ter­ac­tive, founded in 2008, strug­gled from the start, los­ing more than $ 200 mil­lion a year be­tween 2008 and 2012.

How­ever, the re­lease of “Dis­ney In­fin­ity” in sum­mer 2013 jump- started the di­vi­sion.

The ac­tion- ad­ven­ture game, which in­cor­po­rates phys­i­cal toys based on Dis­ney char­ac­ters into the on­screen ac­tion, cost Dis­ney In­ter­ac­tive about $ 100 mil­lion to de­velop. The game, which fea­tures he­roes from Dis­ney movies such as “Toy Story” and “Pi­rates of the Caribbean,” was a hit, selling more than 3 mil­lion copies by May 2014.

A sec­ond edi­tion of “Dis­ney In­fin­ity,” which is avail­able on plat­forms such as Xbox One and PlayS­ta­tion 4, was re­leased in Septem­ber.

Dis­ney In­ter­ac­tive was prof­itable in fis­cal 2014, gen­er­at­ing op­er­at­ing in­come of $ 116 mil­lion. It lost $ 87 mil­lion a year ear­lier.

Through­out its ex­is­tence, the di­vi­sion has been dwarfed by Dis­ney’s four other units — media net­works, parks and re­sorts, stu­dio en­ter­tain­ment and con­sumer prod­ucts — each of which pro­duced more than $ 1 bil­lion in profit in fis­cal 2014.

In Oc­to­ber, Dis­ney will re­lease Play­ma­tion, a sys­tem of con­nected prod­ucts fea­tur­ing char­ac­ters from the com­pany’s f ilm fran­chises, start­ing with “The Avengers.” A starter pack comes with an Iron Man “re­pul­sor” glove worn by play­ers and four other smart toys. Users will be guided on mis­sions that al­low them to jump, duck, dive and run around. A free app will track com­peti­tors’ progress.

As part of the merger of the two units, Dis­ney is cre­at­ing a new tech­nol­ogy lab that will re­port to Fer­raro and Pi­taro.

The ex­ec­u­tives will con­tinue to over­see the parts of the com­bined busi­ness that were pre­vi­ously in their re­spec­tive port­fo­lios.

Dis­ney Pub­lish­ing World­wide, an in­ter­ac­tive chil­dren’s book pub­lisher that has been part of the con­sumer prod­ucts di­vi­sion, will be in­cor­po­rated into the new unit and will re­port to Fer­raro and Pi­taro jointly.

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