Inventory management issues, not sales, likely led to the closing of Disney Infinity developer Avalanche Software, according to a new report from Kotaku.
Two of Kotaku’s sources close to Disney Interactive said that, though the Disney Infinity series had many heavy-hitting competitors in the toys-to-life genre, namely Lego Dimensions and Skylanders, the game was leading the pack in sales.
“It’s weird to be the number one in a genre but still have your sales be disappointing,” one source said.
“Disney Infinity was a big seller and earned a lot of revenue for Disney Interactive,” another told Kotaku. “I don’t know of another high-selling [triple-A] game that has been killed like this.”
The biggest problem that led to Avalanche’s shutdown wasn’t with the series’ quality, but toy manufacturing from as far back as 2014’s release of Disney Infinity 2.0. In trying to address the shortage problems following Disney Infinity 1.0‘s release, which ultimately meant lost revenue in Disney’s eyes, it seems Disney Interactive overproduced the the 2.0 line of toys.
“The biggest issue with [Disney Infinity] 2.0… and probably the reason for the closure of the studio and the end of Infinity was that they made too many toys,” one source said. “Infinity 1.0 had a major shortage of toys. They were almost always off the shelf and manufacturing was behind by months… The expectation was that the brand would grow and they would sell more units and toys.
“It’s hard to put in perspective how big of a failure this was since all those additional units were added to the books destroyed any chance for 2.0 to be profitable.”
Disney’s financial report for the first quarter of 2016 echoes the source’s statement about toys filling store shelves: “The decrease from Disney Infinity was due to higher inventory reserves and lower unit sales volume.”
One source told Kotaku that Disney Infinity’s most popular figure, The Hulk, sold 1 million units, which would have likely been a success—had the company not produced 2 million of them.
The final releases for Disney Infinity 3.0, themed after Alice Through the Looking Glass and Finding Dory, are still set to launch in June. However, Kotaku’s sources said that a tie-in for the upcoming film Rogue One: A Star Wars Story was in the works but will never release.