As most of Disney's
Performance at Interactive Media, which makes video games and Disney's online products, has been mixed in Wadsworth's time there. The division saw 74% revenue growth in the most recent quarter, to $197 million, but it also posted an operating loss of $65 million.
Video games aren't exactly Disney's bread and butter, so it's hardly a surprise this group is struggling. As we've seen in Electronic Arts
This may be an opportunity to bring fresh ideas to the group as CEO Bob Iger looks for new leadership. Disney's recent purchase of Playdom, with a series of Facebook, MySpace, and iPhone apps, could push the interactive group in another direction if its CEO, John Pleasants, is chosen for the top spot.
Video games and online interactive games are a tough business to do profitably, even for companies dedicated to it. With that in mind, I don't know if Interactive Media will ever be a meaningful contributor to Disney's bottom line. It strikes me as a business where Disney is trying to find a niche, but where movie brands and characters have not translated well. With the upcoming release of Epic Mickey, we'll see if consumers get a little more excited about Disney's interactive offerings, but investors shouldn't get their hopes up for a wildly profitable future. Break even might be the best Disney can hope for.
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Fool contributor Travis Hoium does not own any company mentioned here. Walt Disney is a Motley Fool Inside Value choice. Activision Blizzard, Walt Disney, and Electronic Arts are Motley Fool Stock Advisor selections. Motley Fool Options has recommended a synthetic long position on Activision Blizzard. The Fool owns shares of Activision Blizzard. Try any of our Foolish newsletter services free for 30 days. True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community. The Motley Fool has a disclosure policy.