Disney Interactive reports huge losses

It’s a flinch-inducing financial report from Disney Interactive Studios here. The digital house of mouse has totaled six month operating losses at $128 million. That’s a huge drop down from last year’s already large loss of $65 million.

CEO Robert Igor explained the drop and what the company plans to do to get back on top: “We took a five month hiatus which has not been planned from releasing games, to build a higher quality game, and then also, to restack our technical capabilities to deal with volume, or to deal with scale, which we are hoping to achieve.”

Upon being asked why Disney even bother with game development over licensing, he replied: “We’re looking at the social media space today, particularly games and believe that there’s an opportunity to leverage current IP or create new IP in a space that we think is still in its infancy, still going through a bit of a shakedown but we still thought that it would be a wise bet on new technology platform earlier than maybe when we were betting our resources on the console space.

“So the opportunity for growth on the social games side, at least at this point of our entry, is probably greater than it had been when we entered the space on the console side. I guess the same would be true on the mobile side. We just feel that controlling our destiny and making some smart bets that have potentially greater upside, albeit bearing some more risks would be the right thing for us to do.”

It’s a strategy that many publishers are taking on board in recent times.