Disney Interactive Conducts “Significant” Layoffs

CNBC reports that Disney Interactive has become the victim of a large amount – possibly half of the division’s 700 employees – of layoffs. The company confirmed to austin360.com that there were layoffs, but did not confirm how many people were affected, choosing to spin it that it was “fairly minimal” and part of a larger-scale restructuring.

Disney Interactive is in the midst of a refocusing on casual gaming, which has diverted resources away from traditional, AAA budget games. Their purchase of social developer Playdom in July for $763m started the ball rolling in that direction, and recent executive-level personnel changes, including the promotion of former Playdom CEO John Pleasants to the position of Co-President of the division to replace Steve Wadsworth, only added weight to it. As I discussed on a recent recording of the Post Game Report, Propaganda Games was closed down last week after having to rush out Tron: Evolution and after Pirates of the Caribbean: Armada of the Damned was cancelled late into development. The last game released under the name of Disney Interactive was Epic Mickey. which sold 1.3m copies during the holidays. It has officially been confirmed that Epic Mickey creator Warren Spector is still with the company.

When Disney says they’re changing their focus, they don’t play around. They said “we’re going digital, and we’re going casual”, and boom! Propaganda falls by the wayside, the rest of the division is decimated, Tron gets released before it’s ready (and because of this, we can pretty much write off the post-release support that The 7th Level was hoping for in his review), Pirates of the Caribbean is cancelled after much cost, and long time people who built the division for years are unceremoniously shown the door. I guess we should be surprised that a massive conglomerate like Disney is able to move so fast.

On the other hand, AAA development is a hit or miss affair nowadays, and the misses can be catastrophic, especially for a publicly owned business that has a responsibility to shareholders. Disney Interactive has been losing money for some time now. If you’re a shareholder, you don’t care about the haughty standards that someone like Warren Spector has for making video games, or the amazing work that a company with Disney’s resources and brain trust can create. The thought process is extremely narrow: “this division is red. Red bad. Make red black.” In 2011, the easiest way to make it black is to effectively end AAA development, lay off hundreds of your staff, and put the rest of the unlucky schleps onto stuffing Mickey Mouse onto a Facebook game that my cat could play.

I feel really sorry for those affected by the layoffs; hell, Gamasutra couldn’t even get an official comment because the spokesperson herself was “affected”. It’s been a hell of a rough month in that regard.