Consumer Products & Interactive Media Third Quarter Results Revealed

Disney reported its earnings for its fourth quarter and fiscal year ended October 1st 2016, and here is the report on the Consumer Products & Interactive Media division, which covers merchandise and video games.

Here is the official statement:

Consumer Products & Interactive Media revenues for the quarter decreased 17% to $1.3 billion, and segment operating income decreased 5% to $424 million. The decrease in revenue was primarily due to the discontinuation of our Infinity console game business. Lower operating income was driven by decreases at our merchandise licensing and games businesses, partially offset by an increase at our publishing business due to cost saving initiatives.

The decrease in operating income from merchandise licensing was due to the Fiscal Period Impact and a decrease in revenues from merchandise based on Frozen, partially offset by higher revenues from merchandise based on Finding Dory/Nemo and various Disney properties.

Lower results at our games business were due to the discontinuation of our Infinity console game business, which benefited from the launch of Infinity 3.0 in the prior-year quarter, and an unfavorable foreign exchange impact due to the strengthening of the U.S. dollar against major currencies. These decreases were partially offset by higher licensing revenues.

Our Take:

The huge success of Frozen has continued to cause issues on paper as compared to previous quarters, this years merchandise hasn’t sold as well as Frozen, but Finding Dory merchandise sales has still been strong.

The cancellation of Disney Infinity has had a major impact of their gaming division, especially compared to the same quarter in previous years which saw releases of 1.0, 2.0 and 3.0.  The gaming division will take a while to recover as new licenses and games are created and released.

What do you think of these results?