Disney Interactive Posts Significant Losses For Second Quarter
The Disney Interactive Media Group has posted significant losses for the second quarter of this fiscal year, leading to the parent company's earnings being lower than expected.
For the quarter ended April 2, 2011, revenue from Disney Interactive Studios increased by 3 percent year-over-year, up from $155 million to $159 million. However, it saw losses in operating income of $115 million, down from a loss of $55 million in the same quarter last fiscal year.
The company noted that the losses were driven by the acquisition of Playdom
, a deal worth $563.2 million, plus another $200 million if Playdom meets certain performance targets.
In an earnings call yesterday as reported by PaidContent, Disney CEO Bob Iger noted
that the company "didn’t specify that we’d get toward break even [in Interactive Media]. I think we talked at the investor conference about profitability in 2013. It’s a work in progress."
Overall, Disney's profits for the quarter were $1 billion, up slightly from $998 million a year ago.
Earlier in the year, Disney Interactive saw significant layoffs
at both its Austin-based Junction Point Studios and its Los Angeles headquarters.
The media giant also shuttered
its Vancouver-based Turok
reboot developer Propaganda Games, following the release of the studio's Tron: Evolution
tie-in game in December.