In what was an already strong Q2, Disney’s interactive segment serves as the cherry on top, rising 74 percent to $197 million over last year’s period. Meanwhile, the unit’s operating loss narrowed somewhat to $65 million from $75 million in Q209. The improvements were driven by the release of more popular video game titles in the quarter.
The new releases from Disney (NYSE: DIS) Interactive Studios were for the movie tie-in with Toy Story 3 and racing game Split Second. In Q209, the only major gaming release was for Hannah Montana. Higher marketing expenses offset the revenue gains.
Despite the marketing efforts put behind those two games, Disney’s investment in the interactive segment was reduced by 13 percent in Q2. Still, costs were held down in the much more lucrative cable segment, as cap ex fell nearly 40 percent. In fact, operating income at the cable networks soared 200 percent thanks to ESPN — not because of any major growth in advertising, only because previously deferred revenues were counted in Q2. That said, ESPN’s affiliate ad revenues did growth nicely in Q2, but part of that was balanced out by higher production costs. On broadcast, though, despite higher CPMs and higher ratings amid an ad recovery, sales numbers were flat.
Disney also benefited from the box office success of Iron Man 2 and related products from its Marvel Publishing unit.