Walt Disney Co. (DIS:US) is closing Junction Point Studios, the maker of the “Epic Mickey” video games, as the world’s largest media company works to boost results in its money-losing interactive division.
A spokeswoman for Disney declined to say how many jobs were eliminated by shuttering the Austin, Texas-based studio.
Disney Chairman and Chief Executive Officer Robert Iger is restructuring the company’s interactive division (DIS:US), which designs games and websites, and has said it will be profitable in 2013 after six years of losses totaling $1.6 billion.
This month, Burbank, California-based Disney unveiled a new game platform called Infinity that is designed to reduce some of the cost in releasing new games. Characters and storylines from new Disney movies can be added to the Infinity system without all of the expense of developing games from scratch.
Junction Point, founded by game designer Warren Spector, designed the 2010 “Epic Mickey” game, a merger of current video-game technology with classic Disney characters that sold 2.6 million copies. Last year’s sequel, “Epic Mickey 2,” has sold 529,000, according to market researcher NPD Group.
“It was with much sadness that we informed our teams today of changes to our games organization, which include the closure of Junction Point Studios,” Disney said in a statement. “These changes are part of our ongoing effort to address the fast- evolving gaming platforms and marketplace and to align resources against our key priorities.”
The shares fell (DIS:US) 0.7 percent to $53.96 at 2:39 p.m. in New York. Disney rose 33 percent last year compared with a 13 percent gain for the Standard & Poor’s 500 Index.
The cost-cutting comes as sales of games for consoles such as Sony Corp.’s (SNE:US) PlayStation and Microsoft Corp.’s (MSFT:US) Xbox are in decline. Video-game software sales fell 23 percent to $6.7 billion in 2012, according to NPD.
Disney once operated six video games studios, three of which have now been closed in the past three years. The company added another with the acquisition of Lucasfilm Ltd., which was completed in December.
The Junction Point closure was first reported by Forbes.com.
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