Disney’s (NYSE:DIS) Interactive Media division, which is involved in developing and distributing video games and content for branded online services, has been struggling the past few years due to poor performance from its releases. However, its latest game, Infinity, has shown encouraging numbers for August with sales of close to 300,00 units.  If this positive trend continues, it might help Disney to turnaround the loss-making unit.
While the video game industry has struggled to recover since the recession, the forthcoming arrival of new consoles later this year and improving consumer spending could lift the outlook for the industry.
- Can New Attractions Solve Disney’s Attendance Problem This Year?
- Key Takeaways From Disney’s Fiscal Q1 Earnings
- Disney Earnings Preview: What Are We Watching?
- Here’s Why Disney Is Restructuring Its Business In India
- How Does Disney Benefit From Its Association With Hulu?
- Here’s How Disney’s Spectacular Performance At The Box Office Can Impact Its Valuation
What Is Different In Infinity?
Disney’s Infinity is similar to Activision Blizzard’s (NASDAQ:ATVI) Skylanders and uses collectible figurines that are blended within the game, allowing characters from Disney and Pixar to interact and go on adventures. The game features fighting, role-playing, world building and more in two worlds — the world of toys, in which the player can enter the world and play the story of it, and the Toy Box, which allows gamers to build their worlds and use all other entities from the levels unlocked. 
Trends In The Gaming Industry
Disney’s troubled Interactive Media unit has seen considerable losses in the past few years. In the recent quarterly earnings, the division witnessed a loss of $58 million compared to a $42 million loss during the same period previous year.  While the video game industry has been struggling over the past few years, there are signs of revival lately. The U.S. video game market picked up in August after more than a year of declining sales. Retail sales of console and PC games increased 21% in August, the first positive change in sales since November 2011.  Currently, the size of the global video game market is $66 billion and is expected to grow to $78 billion by 2017. 
Moreover, Sony and Microsoft (NASDAQ:MSFT) are releasing new video game consoles in November, the PlayStation 4 and Xbox One, respectively. The new consoles can help lift video game spending in the U.S. In the first two weeks, Disney managed to sell close to 300,000 units of the new game.  While the sales figure looks encouraging, Disney has spent a huge sum of $100 million in developing the game and might take some time to recover the costs. It will be interesting to see how Disney fans internationally respond to the new game and if the company can manage to take away some of Activision Blizzard’s market share (Read – Activision Faces Competition From Disney Infinity As The Gaming Industry Recovers)Notes: