We wrote up a post about the news and are so bummed by this. We'll have more personal comments as we dissect the news, but one of the elements I wanted to include here was an excerpt from the Disney earnings call. During the Q&A session, Bob Iger was asked about swapping from licensed gaming, to console production, to going back to licensed gaming.
Jason Boisvert Bazinet - Citigroup Global Markets, Inc. (Broker)
Just a question for Mr. Iger. I think even before the decision to shutter Infinity, we were at least getting questions from institutional investors about Disney acquiring a console or a video game company I should say. I'm not going to ask you to comment on that, but can you just refresh us in terms of what caused you to start as a licenser of your content, pivot into consoles, and now move back into licensing and what the lessons learned were?
Robert A. Iger - Chairman & Chief Executive Officer
Well, we thought we had a really good opportunity to launch our own product in that space. I realize it was console space, but it was also essentially – a large component of it was the toys – they call it toys-to-life space, the toys-to-life business. And, in fact, we did quite well with the first iteration of it. And we did okay with the second iteration, but that business is a changing business, and we did not have enough confidence in the business in terms of it being stable enough to stay in it from a self-publishing perspective.
You know that you take on substantially more risk, particularly when it comes to manufacturing and managing the inventory, the toy inventory of that business. And in fact, as Christine noted, a good part of the write-off that we just announced comes from having to write-off that inventory that we took responsibility for when we went into the publishing business. And we just feel that it's a changing space and that we're just better off at managing the risk that that business delivers by licensing instead of publishing. It's just that simple.
We did fine with the product initially. We actually made a good product. I give the developers a lot of credit for the product that they made. It was extremely well received. But we knew going in that there would be a lot of risk with this product, and the fact that we did so well initially, gave us the confidence to continue with it. The truth of the matter is that the risk that we cited at the beginning when we went into this caught up with us.
There are some lessons learned in there, but thought it was interesting enough to share. I just wish they didn't have to buy Avalanche, take them under their wing and then now get rid of them and all those employees - even one of our friends! Such a bummer - but I understand business-is-business.
In our post we asked a few questions that I'd be interested in getting everyone's take on as well.
- What was your favorite play set?
- What was your favorite individual character to play in the game?
- What was your favorite physical character (figure)?
- What were your thoughts between version 1.0, 2.0 and 3.0 - what edition did you favor?
- Do you feel there were mis-steps along the way - if so, what were they?
- Finally, what did you like best about the game?