Walt Disney Co. announced Monday it was combining its lagging Disney Interactive video game division with its highly profitable Disney Consumer Products division amid the conversion of digital technology and games.
The new segment will be called Disney Consumer Products and Interactive Media and will be jointly run by Leslie Ferraro, who has led the Consumer Products unit since May, and Jimmy Pitaro, chief of the Interactive unit. They will serve as co-chairs of the combined operation.
“Both Disney Interactive and Disney Consumer Products have a strong track record of connecting people to their favorite stories and characters,” said Disney Chief Operating Officer Tom Staggs, in a prepared statement. “As technology and digital entertainment continue to evolve, a shared innovation strategy will enable this new segment to create unique and engaging products and experiences that exceed consumers’ expectations.”
The Consumer Products division, which handles the sale of licensed products such as toys and apparel related to the “Frozen,” Marvel superheroes and “Star Wars” franchises, has been a big money maker for Disney. Profits rose 10 percent in the fiscal second quarter ended March 28 to $971 million.
By contrast, Disney Interactive reported a 12 percent decline in revenue to $235 million in the quarter as its video game sales have slid.
Disney said that by combining the units they will be able to share technological expertise, while a new team called DCPI Labs will focus on using cutting-edge technologies to create new immersive products.
An example of this approach is Disney Interactive’s release this fall of the third version of its “toys to life” system for the Xbox, PlayStation and Wii game systems. It will feature collectible figurines from all six “Star Wars” films and the animated cable series “Star Wars Rebels.”
The figurines work by placing them on a standwith a sensor. A chip in the figurine’s base communicates with the sensor to create a digital version of that character within the game.
The first Infinity game sets featured Disney and Pixar characters such as Captain Jack Sparrow, Mickey Mouse and Buzz Lightyear. The second set released last year brought Marvel superheroes to life. Analysts expect the Star Wars figures to be more successful.
The company also expects to save money by combining functions such as finance, technology, human resources and communications.
Shares of Disney fell $1.94, or 1.7 percent, to $113.05 on the New York Stock Exchange.