Disney’s cancellation of its lucrative toy-centric Disney Infinity series is even more shocking given the tantalizing plans for the series that two sources close to the project have shared with Kotaku.
Developers were planning numerous new level packs, including one based on this fall’s Rogue One: A Star Wars Story movie, as well as a new line of 12-inch figures. Plans were also afoot for the 2017 release of Disney Infinity 4.0, complete with a long-awaited story mode that would have intertwined the adventures of characters from the series’ disparate Star Wars, Marvel and Disney universes.
Disney declined to address my report, instead pointing to previous statements released about Disney Infinity.
The range of Infinity content planned will be heartbreaking to fans of the series, as it must be to the hundreds of developers at studios around the world that contributed to Disney’s unusual project. Also unfortunate are our sources’ accounts of what did Infinity in, which they said had more to do with miscalculations in toy manufacturing than with game quality.
Disney Infinity was never presented simply as a game but as a platform, a central interactive playground with connected level packs featuring distinct, iconic characters from major Disney, Marvel and Star Wars films. Players bought four-inch figures and level packs made by a range of internal and independent game studios that provided adventures in worlds based on everything from The Incredibles to The Force Awakens to Guardians of the Galaxy. Players could then have the characters from those sets interact in the hub zone, the so-called Toy Box, that worked more as a Minecraft-style creativity space.
Going into this year, Disney had not announced plans for more Infinity content beyond level packs for Alice Through the Looking Glass and Finding Dory, which will still be released in June. But our sources walked us through the frustratingly rich plans for future Infinity content.
Our sources tell us that Disney was preparing 12-inch figures for some of their most popular characters, including Buzz Lightyear, Elsa, Hulk, Hulkbuster, Jack Skellington, and Darth Vader. The figures, set for this fall at $45 each, would have featured more detail, lit up, and acted differently in-game.
“They looked fucking cool,” said a source who worked on the franchise, asking to remain anonymous.
Until the axe came down, I’m told British action game studio Ninja Theory had been working on material based on December’s Rogue One: A Star Wars Story, while Studio Gobo, a studio largely known for external Disney Infinity development, riffed on the upcoming Disney animated film Moana.
The series’ 2017 sequel, which we’ll call Disney Infinity 4.0, was set to include material from Cars 3, Star Wars VIII, Pirates of the Caribbean: Dead Men Tell No Tales, Coco, Guardians of the Galaxy 2, and Thor: Ragnarok. (A source said the numbering scheme was going to be dropped for that one.) The coolest thing about it, according to the sources I spoke with, was going to be the new story mode for the Toy Box.
“The argument we kept getting from fans was that ‘We want to play as Elsa running through Tatooine,” said another source who worked on the series, who also asked to remain anonymous.
Disney Infinity’s Toy Box mode is different from playsets, which are franchise-specific slices of missions and environments. Playsets have licensing restrictions, stopping players from using whatever toy they want to. In other words, Star Wars characters can’t play with Marvel ones in the level packs made about Marvel movies.
“The thing with Toy Box always was ‘Oh, this isn’t Iron Man. This is a toy of Iron Man!’” said the source, “Which gave us a lot more liberty in terms of approvals and all that stuff. Having a Toy Box story mode would give us more free reign.”
None of this will happen, though, because Disney Infinity is no more. The studio responsible for most of the series’ development, Avalanche Software, is shutting down. At least 300 people will lose their jobs, according to The Wall Street Journal.
“The video game industry is a hit-based industry and if your game doesn’t sell well, then your job is at risk,” said a source.
For a time, Disney Infinity was a hit for a company without much success in games. Between 2008 and 2013, Disney’s gaming division lost $1.3 billion, according to Reuters. This stood in stark contrast to the company’s ongoing success on TV and film. Disney Infinity got off to a fast start in 2013, generating $550 million in revenue in its first 10 months. Disney predicted it’d be a billion-dollar empire. When Disney Infinity 2.0 and 3.0 were released in 2014 and 2015, sales would spike. According to analyst estimates, the Star Wars toys generated $200 million on their own last fall.
But the market Disney Infinity was competing in, commonly dubbed the toys to life genre, was getting more competitive. It used to be just Skylanders from Activision and Disney Infinity. Then, those two were joined by LEGO Dimensions from Warner Bros., which leveraged mega franchises like Ghostbusters and Doctor Who. Yet, by all accounts, Disney Infinity remained king.
“The company has been completely behind Disney Infinity,” Disney Interactive VP John Vignocchi told the website Polygon just this past March. “If you look at all of the creative content coming out this year, you can see they are still proud and still 100 percent behind us.”
Obviously, things have taken a turn since then.
“It’s weird to be the number one in a genre but still have your sales be disappointing,” said one source.
“Disney Infinity was a big seller and earned a lot of revenue for Disney Interactive,” said another source. “I don’t know of another high selling ‘AAA’ game that has been killed like this.”
Competition wasn’t the only problem for Disney Infinity, though.
When Disney Infinity first took off in 2013, it was very hard to find the toys for some of the characters. Though it’s easy to suspect shortages are nothing more than cynical manipulations by corporations, it’s also lost revenue. The sources I spoke to said Disney took the shortages during Disney Infinity 1.0 seriously. Disney wanted to avoid that problem in the future.
“The biggest issue with [Disney Infinity] 2.0,” said one source, “and probably the reason for the closure of the studio and the end of Infinity was that they made too many toys. Infinity 1.0 had a major shortage of toys. They were almost always off the shelf and manufacturing was behind by months. [...] The expectation was that the brand would grow and they would sell more units and toys. It’s hard to put in perspective how big of a failure this was since all those additional units were added to the books destroyed any chance for 2.0 to be profitable.”
You started to see evidence of this in Disney’s own financial report in 2016 about declining revenue:
“The decrease from Disney Infinity was due to higher inventory reserves and lower unit sales volume.”
How far off were they? One source pointed to Hulk, one of the game’s most popular characters. A story bouncing around the company was that expectations for Hulk were so huge, they produced two million toys. Unfortunately, as the story went, they only ended up selling one million units.
Both of our sources heard independently that Disney had a plan to salvage things: a possible deal with Hasbro, the toy giant behind Transformers and G.I. Joe, to help with the manufacturing of the toys. (While the idea of the Hasbro franchises showing up in Infinity is tantalizing, neither source was aware of any such plans). Hasbro didn’t respond to a request for comment.
Given the troubles with making so many toys and getting them all sold, you can see why Disney would be interested in working with Hasbro to manage expectations. Disney had tried to resolve their backlog of unsold toys with creative development, as well. The most recent playset for Captain America: Civil War, for example, not only focuses on new characters like Black Panther and Vision, but includes support for Marvel-based figures from years past. The hope was that people would dig into their wallets and purchase some of the old toys, as well.
Another less public challenge for the Disney Infinity project was the balancing act of collaborating with the other Disney-owned stakeholders Marvel and LucasFilm that led to overreach. One said that when the developers wanted Marvel’s Guardians of the Galaxy included, they had to include a full range of characters, including a toy for the blue-skinned Yondu, a relatively minor character from the film. Yondu’s inclusion may have been a well-intentioned gesture to represent the full cast, but the toy was a flop.
“They couldn’t give them away,” said one source.
“You can get a Yondu if you want Yondu,” said another. “He’s a cool-playing character and all but...yeah.”
The Infinity 3.0 team ran into similar challenges with Star Wars, according to one source, juggling priorities to make levels and characters for Star Wars Rebels, a popular animated series even as the game’s developers wanted to focus more on the movies, particularly the then-upcoming Star Wars: The Force Awakens. But LucasFilm said no, and a compromise was reached where Rebels and The Force Awakens would be included in Disney Infinity 3.0. Over the course of development, the focus was pushed toward the new movie.
“Those kind of ultimatums were very prevalent in negotiations for creating new toys for Disney Infinity,” said one source.
As much as Skylanders might have been seen by the outside world as Infinity’s foremost competitor, it was another Star Wars game that added yet another challenge to Disney franchise. Last fall’s Star Wars Battlefront, the online shooter collaboration with Electronic Arts, was a quick success. Unlike Infinity, Disney only licensed out Star Wars to EA, which meant EA was bore more of the the risk. For Disney, it was the cheaper play, but the company seemed committed to support both games. The plan was for Disney Infinity and Battlefront to exist alongside one another, targeting different age groups.
“Our methodology was we’re [Disney Infinity] going to hit this 7-12 range,” said one source, “[and] Battlefront is going to the teen and up range. But it turns out even the younger kids wanted to play Battlefront still.” Battlefront went on to sell 13 million copies, exceeding financial expectations.
It seems like a combination factors—increased competition, miscalculated inventory, complex corporate interests—contributed to Disney Infinity’s demise. The result is that Disney seems to be getting out of making their own console games altogether and scuttling its most ambitious gaming project right as it was on the cusp of realizing its full franchise crossover potential. When the latest news about Disney Infinity hit, the company said it would pivot towards licensing properties, as was the case with Battlefront.
“[The games] business is a changing business,” said Disney boss Bob Iger on an investor call this week. “We did not have enough confidence in the business in terms of it being stable enough.”
And thus, the end of Disney Infinity.
Disney’s John Vignocchi had long been the face of the Infinity project. Full disclosure: I knew him and was featured in videos with him at my previous employer, Giant Bomb. He didn’t respond to comment for this story, but on Tuesday said this on Twitter about the grand Disney Infinity experiment: “I’d like to think that we contributed to the legacy of Disney in some way and created memories for you, your friends and family w/ our game.”