In an attempt to stem losses which number in the hundreds of millions, Disney Interactive announced radical changes to its business plan on Monday. The company will shift attention away from creation of console games, and instead focus on online and mobile entertainment.
The move included the layoff of approximately 200 employees, as well as the closure of an entire game development studio.
Co-Presidents John Pleasants and James Pitaro, who joined the company in October, said in an email to employees Monday night that the move was necessary. “Reorganizations require very difficult decisions and this one is no different,” the pair said. “We must continuously evaluate our structure and organization and its needs in order to make Disney’s digital content and businesses even more robust and successful.”
The cuts come as no surprise to the gaming industry, which has seen a decline in the console game market over the last two years. In fact, Wall Street analysts interpreted Disney’s acquisition of Playdom last year, a firm which specializes in game development for social media sites, like Facebook, as a shift in Disney Interactive’s focus.
The reduction in workforce may just be the beginning. As Pleasants and Pitaro refine their vision and attempt to lead the division into profitability, many expect to see additional waves of layoffs.