I'm honestly really surprised Disney Infinity is going under.
Not even sure I understand it. I thought it was a fairly active and loved collector's item/game for kids and adults a like.
You're right, it is a well loved and successful game. In fact they likely were still making a profit off of it.
However, they stated in their press release that they are pulling the plug because of a "lack of growth" in recent times. Essentially, it was doing
fine for itself and making a profit, but it wasn't beating the likes of Skylanders and amiibo anyway.
This is where the law of diminishing returns (economics term) comes into play. The law of diminishing returns basically entails that marginal output of the entire production process decreases, as the output of a
single factor increases.
In lay man's terms, it basically means too many eggs are going into one hanging basket, weighing all of the other hanging baskets down.
In the case of Disney Infinity, they clearly had way too many figures produced, too many versions of each game (some of which weren't being properly supported, like the PC version), and likely too many employees working on the entire Disney Infinity initiative. When you are operating under the law of diminishing returns, while a lot of cases immediately spell bad news for the company in question, this isn't always the case. Disney Infinity was doing
fine under this situation.
However, that's the problem. Why pour so many resources into something that's just doing
fine, when you can just cut it and focus your efforts on other areas, like the next Force Awakens or Civil War, and then simply outsource your IPs for video games (Kingdom Hearts being a perfect example for Disney to know that this strategy works)? Essentially, Disney don't want to pour so much manpower and money into this initiative that's just sort of "doing well". Especially since it's obviously eating into the resources they can pour into other projects. It's also clear that, while Disney Infinity has never been unsuccessful, it has been doing worse and worse as time goes on, never reaching the same success as it's debut. Compare that to amiibo, which has actually been doing better and better as time goes on (except for the Animal Crossing figures which don't seem to be as popular as Nintendo had hoped - however, that's partly because the cards exist), and Skylanders, which continues to expand, especially now having crossover content with Nintendo and upcoming TV shows, a long running and successful comic book series, and all that.
There's also the fact that Disney Infinity would need a serious re-think how it handles the Toys to Life aspect. While I won't knock the game itself (I think it looks very good actually), it EASILY has the worst model for distributing it's content. I remember doing a report for college on the Toys to Life genre, comparing amiibo (which was just out at the time), Skylanders, and Infinity. And in my research I learned that, while Infinity has the IP strength, it squanders that due to a content distribution system that boggles the mind of the average consumer, and more importantly asks them to spend more than it's competitors for what's ultimately a very comparable experience. You don't just buy a figure to play as a character and upgrade them just with that like in Skylanders. You have to buy Power Discs to power up your characters, which are sold in booster packs, so they're random. You have to buy playsets with a bunch of figures to play the different stories like the Star Wars one and what not. You need to ****ing attend D23 Anaheim to get the King Mickey outfit for Mickey (yes it's a special case, I mean it mostly jokingly). The distribution of content for Disney Infinity is ALL over the place, the average kid isn't going to have the money to spend on it, and the average parent isn't going to understand it and have confidence in purchasing it for their kid.
I kinda went on a tangent, so TL;DR is that they are killing DI not because it's doing poorly, but because it's not competing with other brands and it's using up more resources than it's proven to be worth, so law of diminishing returns. In general, Disney have struggled to make a splash with their own video games that they develop and publish (even though many are actually quite good a lot of the time), and don't see a reason to bother continuing to do so, when they can just outsource stuff like with Kingdom Hearts and Star Wars: Battlefront. Those franchises have a much better cost-revenue ratio than DI for Disney since all they do is license them for the most part. Meanwhile, while established and high profile developers and publishers look after doing the busy work in the game industry, Disney can focus on making the next Zootopia or Civil War.