Steve Wadsworth, president of Disney Interactive Media, resigns
The Walt Disney Co. executive who oversaw a vast expansion of the studio’s online and gaming ventures, but struggled to achieve profitability, is leaving the company.
Steve Wadsworth, president of Disney Interactive Media Group, sent an e-mail to his staff late Thursday, saying he had decided to leave after 11 years. He gained broad oversight of the media giant’s sprawling digital operations in a 2008 reorganization, which combined the games group with the company’s online operations.
His responsibilities extended from the game development studio and mobile platforms to a growing number of virtual worlds, including Club Penguin and World of Cars Online. “It is with mixed emotions that I announce my decision and plan to resign,” Wadsworth wrote to his staff, adding, “I have been thinking about this for quite some time, and while it is difficult to leave a great company, an exciting business and a wonderful group of people, my desire and excitement to pursue other opportunities is too great to ignore.”
No successor has been named, although speculation is focused on John Pleasants, executive vice president of social gaming company Playdom Inc., which is owned by Disney. He was formerly with Electronic Arts Inc. and Ticketmaster and is well regarded by analysts.
“All I can say is he is a rock star and a world-class digital media and gaming 2.0 executive from my experience working with him at Playdom,” said Tim Chang, who led Norwest Venture Partners’ investment in the company. Chang said of Pleasants that there was “nobody better suited to lead a large or small organization in this rapidly changing global market of social gaming.”
In July, Disney Interactive added social gaming to its portfolio with the acquisition of Playdom, which creates games that run on Facebook and other networks. It was one of several recent developments in the division. During the summer it also acquired Tapulous, a developer that specializes in mobile games and applications, and it unveiled World of Cars Online, the latest in a growing number of virtual worlds.
But the group, under Wadsworth, posted losses. In Disney’s most recent quarter, the Interactive Media division had an operating loss of $65 million on revenue of $197 million.
“We believe fully in the space, obviously, given our investments,” Chief Executive Bob Iger said in July in a conference call with analysts. “And we believe that overall games will be profitable for us and particularly social games will be profitable, and we’re not giving you a timeline as to when we’ll achieve that.”
John G. Taylor, a game industry analyst with Arcadia Investment Corp., said Disney began ramping up its investment in packaged games just as the industry was undergoing a titanic shift from selling goods on shelves to delivering experiences online and on portable devices such as Apple Inc.'s iPod Touch.
“The kids market really changed,” Taylor said. “The problems that [game publisher] THQ has been having for the last couple of years in finding large audiences for kids’ properties started to plague Disney as well.”
Disney Interactive had a 1.7% share of the money spent on video games in 2009 in the U.S., according to research firm NPD Group.
Disney’s game group’s expansion into online started with its 2007 acquisition of Club Penguin for $350 million. But investors have grown impatient with Disney’s continued investment in new-media initiatives that have yet to translate to the bottom line.
“The Playdom acquisition brought it into sharp focus, given what they spent on it,” said Doug Creutz, media analyst with Cowen & Co. “You’re spending a lot of money that you’re telling us is going to pay off down the line. But this interact unit continues to show losses.”
Iger issued a statement Friday morning, crediting Wadsworth with transforming Disney’s digital business.
“I’ve been fortunate to work with Steve for many years and am thankful for his dedication and countless contributions to our company,” Iger said. “He leaves with only our best wishes for continued success in whatever challenge he takes on next.”
Wadsworth will remain on the job until a successor is named.