Disney has announced the lay-off of 700 game and web developers, or a quarter of its global staff working in that division, as the company seeks to shift its advertising strategy on Disney.com.
“These are large-scale changes as we focus not just on getting to profitability but sustained profitability and scalability,” James A. Pitaro, the president of Disney Interactive, told The New York Times.
The redundancies have come about as a result of the company's decision to merge its mobile and social gaming departments and Disney has also decided to significantly roll back in-house development of all types of games. Annual game releases are expected to be cut by as much as 50 per cent.
“We’re not exiting any businesses, and we will pursue licensing partnerships in which we retain a lot of creative input,” Pitaro commented. “But this is a doubling down on mobile and an effort to focus much more intently on a core set of priorities.”
Disney Interactive, after years of losses, returned to profitability thanks to Disney Infinity and has a booming mobile game business in Japan called Tsumu Tsumu. However, struggling social games and the decision to move from banner ads to sponsorship-style advertising provoked the decision to cut back on staff numbers.