Disney has laid off 26% of it’s global staff from its video game and Internet division according to New York Times.
“These are large-scale changes as we focus not just on getting to profitability but sustained profitability and scalability,” James A. Pitaro, President of Disney Interactive, said in an interview.
Disney Interactive, which is based in Los Angeles, will also close some of its smaller web businesses, including BabyZone.com and Spoonful.com although Disney Infinity and Fantasia: Music Evolved remain unaffected.
Mr. Pitaro said that Disney Interactive would be cutting annual game output by as much as 50%. “We’re not exiting any businesses, and we will pursue licensing partnerships in which we retain a lot of creative input,” he said.
Disney has been struggling in social gaming on the likes of Facebook as gamers moved away from the site into mobile gaming on their smart phones at a faster rate than expected. Disney’s $563 million acquisition of the social game company Playdom in 2010 was Disney’s gamble on social gaming being big for a lot longer, that gamble appears to have not being entirely successful.