[Update: Why Disney Infinity was really cancelled.]
[Update 2: What Disney Infinity 4.0 was going to include...]
The current "toys to life" gaming trend started in 2011 with Activision's Skylanders: Spyro's Adventure, and its success led to the creation of similar franchises from different manufacturers and the Amiibo craze at Nintendo. Of the various toys-to-life options on the market, the most popular heading into 2016 was Disney's Disney Infinity, which not only boasted a line-up of classic Disney animated characters, but also the rosters of film franchises owned by the Mouse House; namely, Marvel and Star Wars.
It may come as a surprise to some fans, then, that the Disney Infinity franchise has been officially cancelled. Not only that, but Disney's entire in-house game development efforts have been shelved as well.
As part of the shuttering of its in-house development, Disney is closing the Avalanche studio that produced the Infinity line. According to IGN, the decision was made based on a lack of growth in the toys-to-life market as a whole, so it wasn't necessarily a decision based solely on underperformance of the game.
The statement provided to IGN by Disney reads as follows:
"After a thorough evaluation, we have modified our approach to console gaming and will transition exclusively to a licensing model. This shift in strategy means we will cease production of Disney Infinity, where the lack of growth in the toys-to-life market, coupled with high development costs, has created a challenging business model. This means that we will be shutting down Avalanche, our internal studio that developed the game. This was a difficult decision that we did not take lightly given the quality of Disney Infinity and its many passionate fans."
In addition, the Disney Infinity team released a statement to the fanbase thanking them for their building a community around the game and reassuring them that the Alice Through the Looking Glass and Finding Dory sets that were planned for this year will still be released.
Part of the reason for Disney Infinity's popularity is its inclusion of characters from Marvel and Star Wars properties. Marvel characters have already appeared in other toys-to-life products such as Hasbro's interactive Playmation sets, so it's possible that other companies could license Disney properties for inclusion in other toys-to-life games such as LEGO Dimensions in the future. Of course, this depends in large part on whether the toys-to-life market starts growing again.
The shift away from in-house development shouldn't come as too much of a shock to many Disney fans, as the company has been moving away from self-published games for years. Disney Infinity was likely the largest in-house game left for Disney, and it apparently wasn't in a strong enough market for the company to keep it going. It's telling that the company is taking a $147 million hit in costs associated with the discontinuation of Infinity, which suggests that Disney thought it was better to lose that money now than to potentially lose a larger amount as the toys-to-life market started to shrink.
This move to a licensed model may prove better for Marvel fans in the long run, though, as it could lead to Disney getting Triple-A games for its stable of insanely profitable superheroes in a deal that is similar to what EA has with the Star Wars games. In that sense, gamers could be looking at titles featuring Captain American, Iron Man, Guardians of the Galaxy and more, as developers eager make a deal with Disney will no doubt be lining up.