NOV. 12, 2013 • In less than a week after Disney Interactive showed its second recorded quarterly profit of $16 million for the quarter ending September 28, co-president John Pleasants left the division in a management shakeup that installs Jimmy Pitaro as president. Pleasants and Pitaro have managed Disney Interactive as co-presidents since 2010. Pleasants was acquired along with Playdom in a $563 million acquisition during July 2010 and oversaw social games and video games. Pitaro came over from Yahoo Inc.’s media unit to manage Disney.com. Pleasants told the New York Times that his contract extended until next summer, although he intends to stay on as a consultant until at least next January in order to ease the transition. The successful Disney Infinity, which Pleasants shepherded into release, is credited for boosting the division to its recent quarterly profit after doubling sales $396 million. During the same period last year Disney Interactive posted a $76 million loss.
Impact: Disney Infinity has done very well, but, it was very much the type of traditional video game product that Disney announced it was getting away from when Pleasants took over. So despite Disney Infinity’s strong start, we can’t help but wonder if  Playdom not meeting expectations for revenue and growth had a lot to do with Mr. Pleasants riding off into the sunset. Pleasants is not completely at fault for that since social games began losing steam soon after the acquisition was finalized. One only has to look at Zynga’s fortunes during the same period to validate the obvious that mobile games have overtaken social games with many consumers. Regardless, it probably was impossible to divorce Pleasants from corporate disappointment in Playdom at the same time chairman Robert Iger decided he wanted to consolidate operations around one person based in Burbank. Neither did it help Pleasants’ cause that he was based in San Francisco. When Pitaro and Pleasants took over Disney Interactive the division was bleeding $300 million a year. By the end of fiscal 2013, the loss had been reduced to $78 million – making now a stable time to move leadership of the division into one office instead of two. In theory, one leader should be a net positive for Disney Interactive’s ability to forge a more focused strategic approach to cross-platform content. Then again, we have seen Disney get cold feet too many times when it comes to electronic entertainment to believe just yet that there is a long-term future for this incarnation of  interactive division. Successive quarters showing net profits will make the difference in that regard. Let’s see if Mr. Pitaro can deliver.
