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Layoffs Coming for Disney

By Mark Reeth and Michael Finarelli – Feb 7, 2014 at 4:12PM

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Disney's gaming company, Disney Interactive, has struggled over the past year, and "several hundred people" could be laid off, beginning as early as this week.

Disney's (DIS -3.79%) gaming segment, Disney Interactive, has struggled to find an identity in the larger company, and has downsized repeatedly in recent years, seeking consistent profitability. Now, the company is planning to eliminate at least 200 additional jobs from this division in the coming weeks. Disney said on Wednesday that Disney Interactive would report a second-quarter operating loss.

In this segment from Thursday's Consumer Countdown, Motley Fool consumer goods analysts Mark Reeth and Mike Finarelli discuss the overall performance of Disney Interactive, and how it fits into Disney as a whole. This segment has been showing results that are substantially better than they have been previously, with a big contributor to its increased revenue being the recent success of Disney Infinity. Infinity brings interaction between toys and video games, and competes directly with Activision's (NASDAQ: ATVI) Skylanders Swap Force. So far sales have been very successful, with Infinity sales nearly keeping pace with Skylanders, despite the latter having a significant head start.

Mark and Mike also discuss that while revenue from Disney Interactive is only a drop in the bucket for the company as a whole, success here may impact the company in other meaningful ways.

Mark Reeth has no position in any stocks mentioned. Michael Finarelli owns shares of Activision Blizzard. The Motley Fool recommends Activision Blizzard and Walt Disney. The Motley Fool owns shares of Activision Blizzard and Walt Disney. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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