Disney profits up 22% from last year and cant afford to hold onto VMK?

[cteddiesgirl]

Stock's up at 34.71!!

That's GREAT! Probably not for most folks on these boards, but for someone that bought at 28, this is pretty good news.

I knew I should have bought some right after 9/11. I just didn't have the money.


Any way, I do believe that the shutting down of VMK is because they feel they are not getting a return on their investment in it and/or because of the contract with Sulake.

Also, I believe that if they see their profits go down after VMK closes, they will assume it's because of the economy and not due to us.

 

[CelebrationNM]

Also, I believe that if they see their profits go down after VMK closes, they will assume it's because of the economy and not due to us.

At least they would be assuming correctly.

 

[Fonna]

At least they would be assuming correctly.

You know the old saying about assuming...........

 

[cteddiesgirl]

At least they would be assuming correctly.

Oh. So you must have the inside track on how much they profit off of everything?

How can you assume anything? Do you really know how many people have spent more than $10,000 in one trip that was solely due to VMK?
I'm pretty sure that Disney themselves don't know. So how would you?

 

[aengus]

Those numbers are representative of hte past, not the future. Of which VMK was a part of.

Do we have to bring out the official disney statement again?

Sure why not.

As many of you know, Virtual Magic Kingdom was created and launched back in 2005 as part of the Disneyland 50th Anniversary Celebration. VMK exceeded expectations in terms of performance, and as a result we extended the promotion (that is, VMK, the game) well beyond the 50th Celebration.

 

[TLinden16]

I agree with CelebrationNM here. With the economy being where it is, and gas prices rising, the cost of travel is going to be a lot higher this year, as is the cost of people's every day living expenses. It's the extras like vacations that are the first thing to go. The powers at Disney are smart. They know what our economy is like, and I'm sure that they know there will be a drop in profits next year.

And that will have nothing to do with VMK because the number of VMK players who will be cancelling trips because VMK is closing will be a small blip on the bottom line. Even if a hundred or a thousand family's cancel trips, it's barely going to affect Disney's bottom line because for each family that cancels a trip because VMK is closing, there are probably 10,000 families who are still going down.

The numbers of people affected by VMK closing is miniscule in the scheme of things.

 

[aengus]

I agree with CelebrationNM here. With the economy being where it is, and gas prices rising, the cost of travel is going to be a lot higher this year, as is the cost of people's every day living expenses. It's the extras like vacations that are the first thing to go. The powers at Disney are smart. They know what our economy is like, and I'm sure that they know there will be a drop in profits next year.

And that will have nothing to do with VMK because the number of VMK players who will be cancelling trips because VMK is closing will be a small blip on the bottom line. Even if a hundred or a thousand family's cancel trips, it's barely going to affect Disney's bottom line because for each family that cancels a trip because VMK is closing, there are probably 10,000 families who are still going down.

The numbers of people affected by VMK closing is miniscule in the scheme of things.

waiting for you and celebration to give me some actual data

 

[Fonna]

waiting for you and celebration to give me some actual data

Hmm, 100 families cancel a trip to Disney at an average of about 4 thousand dollars trip - correct me if my math is wrong but, $400K a year in loss is not a blip in the theme park business.

I am sure Celebration will get back to you after he cashes his Disney paycheck...

 

[TLinden16]

OK, Fonna and Aengus, not trying to start any arguments here, but here are some calculations that I did to show that Disney will not notice lost revenue from VMK players in their bottom line:

While $400,000 is a lot of money to you or I, it is miniscule--a fraction of a percent--to a company that, according to it’s annual report had $35.5 billion in revenues in the 2007 fiscal year.

According to the 2007 annual report, Disney parks and $10,626,000,000 (that’s over $10 billion dollars) in revenues in the 2007 fiscal year. Look at these numbers and tell me if you think Disney is going to notice it a decrease in revenues due VMK players canceling trips:

$10,626,000,000--Disney’s theme park and resorts Revenue for 2007 fiscal year
$106,260,000--1% of the Disney’s theme park and resorts revenue for the 2007 fiscal year

$400,000--Revenue lost if 100 VMK families cancel trips costing $4,000
$4,000,000--Revenue lost if 1000 VMK families cancel trips costing $4000
$40,000,000 Revenue lost if 10,000 VMK families cancel trips costing $4000

When you look at the quick calculations I did, do you really think that Disney is going to notice the lost revenue if 100, 1000, or even 10,000 VMK familes cancel trips costing an average $4000? Maybe 100 over a 100 families would cancel. I doubt 1,000 would cancel, and I only even did the math for 10,000 families to show that the lost revenue from that many people cancelling trips is less than 1/2% of Disney’s total revenues for last year.

Using Lily’s figure that there are 250,000 characters on VMK, to even hit that figure for 1% of Disney’s revenues for the theme parks and resort, we would have to have an average of $425 per each and every avatar in the game to reach that number. I personally have used about 12 avatars in the past year, so my share of that 1% alone would be about $5100.

I just hate to think people thinking that boycotting Disney because VMK closing is going to have an impact on Disney’s bottom line.

As for numbers, Aengus, I would guesstimate that there are at most 50,000 regular VMK players who log in at least once a week (I’m not talking characters, as we know many people have more than one). 50,000 is miniscule compared to the number of people who go to Disney parks, watch Disney television programming, or go to Disney movies.

Disney has been in business for a long time. They have a great reputation. People know they can rely on Disney to put out high quality entertainment most of the time. They trust the brand name.

Even if Disney have 25,000 VMK players boycott all things Disney, it's not going to have that big of an impact on them.

 

[CelebrationNM]

Also, I believe that if they see their profits go down after VMK closes, they will assume it's because of the economy and not due to us.

I am sure Celebration will get back to you after he cashes his Disney paycheck...

Thanks for asking; I like using facts to discuss fact-based topics, so I pulled a few things together on my Blackberry while waiting to have my check cashed this afternoon. (...) Let me assure you: I've got no "inside track" on anything. I read the newspapers, press releases and industry publications. You can learn a lot from reading a national newspaper everyday. I suggest USA Today.

Anyway, let us first operate under the "the success of Disney will be altered in a significant way because of VMK players" theory. Using this theory, we would find that the closing of VMK actually caused resort hotel bookings to increase for the second half of 2008 over the second half of 2007. I refer to a quote from a media teleconference by Tom Staggs, Disney's chief financial officer:

"Room reservations for our domestic resorts for the rest of the fiscal year [2008] are currently slightly ahead of the prior year, with strength in Q4 more than offsetting a slight decrease in Q3. Pricing per reservation on the books for the balance of the year is also trending higher than prior year."

I'm not saying that Disney didn't lose potential money because of VMK closing; we've all seen evidence that there were cancellations. What I am saying is that this in and of itself is will not bring down Disney's stock or have a significant impact on the company. As Tom explained over the teleconference:

"We are also benefiting from new marketing and pricing strategies put into place over the last few years, enabling us to extend length of stay, serve more guests in on-property hotels, and grow revenues through sophisticated pricing initiatives. Our investments in a world-class yield management system are really helping us to maximize our performance. Over the last several years, we’ve made our parks more accessible to an even broader audience, adding significantly more value-priced hotel rooms and creating vacation packages that allow a family of four to visit for seven days while staying six nights in one of our hotels for only $1600."

See why I feel this whole thing is bigger than a virtual online world? Expect Disney to be resilliant through a future economic downturn; there's a lot of planning that goes into this on top of the benefit that goes along with domestic parks benefiting from the weak dollar.

To answer your question, $400,000.00 would be 0.0037% of the 2007 revenue of Parks and Resorts. The poster before me provided a great breakdown. Sure it's something, but let's not forgot that Parks and Resorts paid to sponsor VMK, although none of us know how much that expense was.

I am offering this perspective to dispell the notion that future Walt Disney Company financial performance is correlated with VMK and I am suggesting nothing more than that. It's a large and complex company and suggesting that VMK has an influence over the movement of Disney's stock is overly simplistic. Heard of Desperate Housewives? Grey's Anatomy? ESPN? Hannah Montana/High School Musical/Jonas Brothers? It's foolish to see VMK as anything more than a very small drop in a very big bucket.

I don't have any of these facts or figures in my mind while I play VMK; I enjoy it for the game that it is. I don't want to argue with you or cause any hard feelings, but I do want to offer a differing opinion on this matter. If you disagree with me, please provide the set of facts off of which you are basing your opinion and I'd be more than willing to listen.

 

[Tampa]

If a Disney fanatic wants to boycott Disney to somehow return the hurt caused, they most likely weren't true Disney fans at all.

If a Disney fanatic wants to boycott Disney with the concept to never get hurt by something so admired again, I am with them.

I have no kids, and if I ever do, they will learn who the snorks and smurfs are, and they will share the same outlook on the mouse as Universal Studios does. And with them never growing up with the diluted passion for the parks that I had growing up, hopefully and chances are, my grandchildren wont either. That's a true boycott.

On May 22, like a smoker counting the days after quitting, I'll be counting the dollars that have been salvaged. I've already started, as I've saved $450.00+ this year, by not (and never intending to again), renewing my premium annual to WDW.

Adios Disney co. Never again will you get the chance to treat me like this.

 

[aengus]

VMK's numbers have never been posted. You are all working under an assumption that VMK is closing because of financial reasons.

The only fact you can base any of this on is Disney's official statement. VMK was extended becuase it was more successful than anticipated but eventually all promotions come to an end.


Your numbers and facts include VMK.

I invited you to show me some data showing VMK as a fincancial loss, I am going to have to say... Next. I didnt see any such evidence.


I also think you missed the bigger point of my thread, read my first post, rather than jumping ahead to all the disagreements.

 

[Fonna]

VMK's numbers have never been posted. You are all working under an assumption that VMK is closing because of financial reasons.

The only fact you can base any of this on is Disney's official statement. VMK was extended becuase it was more successful than anticipated but eventually all promotions come to an end.


Your numbers and facts include VMK.

I invited you to show me some data showing VMK as a fincancial loss, I am going to have to say... Next. I didnt see any such evidence.


I also think you missed the bigger point of my thread, read my first post, rather than jumping ahead to all the disagreements.

Actually Aengus they have made your point for you. This company is clearly not interested in anything but money.

They don't care about you, they don't care about me and according to a few posters here ~ they don't care if they lose a few dollars as a result of VMK'ers having their hearts broken.
Sadly our own fellow VMK'ers have even posted on other threads such comments as ~

• if you don't choose to enjoy the magic - don't
• Oh one less peson in line at Soarin'

It's great that Disney still will have a loyal cash cow of people that are like minded in their inconsideration of other people's feelings.

MY few thousand dollars a year may not make a difference to Disney - BUT it makes a difference to me! I will take the money you have decided to deem is of little consequence to Disney and spend it else where.

 

[EvlQueen]

Wow. You know what is perplexing to me? That it is so important for some folks to show us how insignificant we are to Disney. Aengus's original point was simply that maybe Disney could afford to keep VMK without going broke. But in this thread and others, it has seemed very important for us to know how little we will matter. Why? Why hurt people's feelings unnecessarily? Don't we all feel bad enough? Ironic because what won people over about Disney in the first place was how special they made us feel. Turns out according to you we are not special at all. We are miniscule. We are a blip. Actually that is how this whole thing has made me feel, so, sadly, you are right.

 

[CelebrationNM]

Also, I believe that if they see their profits go down after VMK closes, they will assume it's because of the economy and not due to us.

I was replying to the above with my previous post: giving a reason why VMK closing would not be responsible for a decrease in Disney profits and stating the basis of my opinon for why a VMK player boycott would not leave a financial scar on the company.

Now, Fonna. Your post was about financial issues so I discussed financial issues...I did not mean to suggest that is the only thing that is important. Quite the opposite! Disney has to care about the experience of the Guest or there will be no Guests! Implicit with continued financial success at Disney is the idea that people are continuing to visit and purchase because they were satisified with either their previous experience or what they have heard about Disney Parks and Resorts from others. Caring about the Guest's experience with the Disney brand is very important and I think nobody does it better than Disney.

I completely understand that the closing of VMK has changed how you feel about Disney, but to say that it means Disney doesn't care about anything but money is a bit of a blanket statement. If you want I can point you to a number of favorable reviews from Disney Guests and I can point you to stories about times when Disney went the extra mile to make a difference for somebody; stories that happen all the time and don't make it into the mainstream media because it's not about publicity. Post-9/11 is a great example when Disney offered hotel rooms and food to those that could not make their flights home. That was a money loser, but corporate Disney empowers (and expects!) cast members to make these "magical moments" part of every Guest's visit. That is what keeps them coming back, and as a Guest in the parks I think it's what sets Disney apart. Does that make sense? If Disney gives each Guest the most fabulous time of his or her life, they will keep coming back. Guests feel it was money well spent and Disney is able to continue to offer quality experiences. All are happy!

Now, I'm sorry the part of Disney you--and many here--liked as much as any other is ending. All I have to offer is that change happens and I wouldn't look at this as a personal attack upon loyal Disney fans. Does that mean every decision will please every Guest? Unforunately, not at all. This was one decision that didn't. Unfortunately none of us have a perspective on what the underlying reasons for this decision are or what is to come in the future, so it feels like an unfair occurance; it feels like Disney doesn't care about a group of its loyal fans. I think we've all had to make decisions that we knew disappointed somebody else, but for whatever reason we made them anyway. Looking at it that way doesn't make it any easier, but I think it is important to note that this shouldn't be taken personally.

My thought is that those that have a positive attitude about changes--especially changes we don't like-- are happier and healthier than those that do not. Those are two good reasons to try to maintain a positive attitude because often there is nothing we can do about change anyway.

 

[aengus]

Thank you celebration for that last post. Honestly I was thinking it seemed like you only wanted to fight, but that definitely had some clarity.

for the record I do love Disney Parks, and VMK. I am not really into their movies, their channel, or really any of their other things.

I will greatly miss VMK. My only real complaint is from a personal point of view, I think they are missing the boat that it could be a brilliant marketing tool for them, so the business could be happy and us gamers could be happy. Sometimes PR brings in revenue that they can't count.

As an adult I can get over this, but it hurts to see the community as an entity feel abandoned, and it hurts most watching how sad the kids are.

Disney made some impressive numbers over and beyond any of wall street expectations and they did it with the costs of VMK included. Just wish someone with some greater vision could see its potential.

 

[CelebrationNM]

Just wish someone with some greater vision could see its potential.

As do I.

 

[BriarRosie]

Actually Aengus they have made your point for you. This company is clearly not interested in anything but money.

They don't care about you, they don't care about me and according to a few posters here ~ they don't care if they lose a few dollars as a result of VMK'ers having their hearts broken.
Sadly our own fellow VMK'ers have even posted on other threads such comments as ~

• if you don't choose to enjoy the magic - don't
• Oh one less peson in line at Soarin'

It's great that Disney still will have a loyal cash cow of people that are like minded in their inconsideration of other people's feelings.

MY few thousand dollars a year may not make a difference to Disney - BUT it makes a difference to me! I will take the money you have decided to deem is of little consequence to Disney and spend it else where.

Thanks for quoting me. I was just responding in kind to the snarky responses to my posts. All the money grubbing posts don't change the feeling for me that Disney puts out enough quality entertainment for me that I can live with VMK closing. My enjoyment of Disney isn't solely based on the game.

If you saw the reactions I saw of kids in wheelchairs during the Festival of the Lion King show last October, you'll know exactly why I still love Disney. Money had absolutely nothing to do with it. There are so many reasons for me to still be a fan of Disney beyond VMK.

Bottom line. Aengus can't prove Disney is making money from VMK any more than Jellyrolls can prove Disney is losing money from it. But I tend to agree that if VMK drew as many numbers as Disney wanted to see, VMK would never have been closing.

 

[TLinden16]

Like CelebrationNM, I was also responding to cteddiesgirl statement regarding profits, and also Fonna's statement that $400,000 was more than a blip to Disney's bottom line. My math wasn't to show that Disney thinks we are insignificant. It was to show that a small percentage of VMK players boycotting VMK is not going to have an impact on Disney's bottom line.

As CelebrationNM says, Disney does care about their guests, and sometimes they are going to make decisions that are going to make some of those guests unhappy. Hey, I was disappointed when they replaced Mr. Toad's Wild ride, but I got past it because I know that it was only a small fraction of what makes Disney so magical to me, and that is pretty much the same thing with VMK.

I invited you to show me some data showing VMK as a fincancial loss, I am going to have to say... Next. I didnt see any such evidence.

Aengus, I can't show you any data showing VMK as a financial loss anymore than you can show me VMK as a financial gain.

And I'm not doubting that Disney can afford to keep VMK open. Disney clearly makes enough profits that they can afford to keep VMK open.

However, why should Disney continue to spend money on something that reaches such a small percentage of their guests? That money could be used in other areas that reach a higher volume of their customers.

Quite frankly, I think that the complaints from the players also played a big part in this. So many players, myself included, have come on these message boards and written to the black hole to express our frustration and disappointment in the game:

We've complained about every event VMK has run.
We've complained about the crashes.
We've complained about rare items coming back onsale.
We've complained about favoritism in the game.
We've complained about how limiting the hosts games were, and when they started doing teleporter games and quests, we complained about too many host prizes making it into the game.

Why should Disney throw money into a game that they have received so many complaints about?

I'm not looking to have an argument here. I'm just trying to look at this realistically. I can see the big picture here, and I can understand why VMK is closing.

 

[aengus]

Thanks for quoting me. I was just responding in kind to the snarky responses to my posts. All the money grubbing posts don't change the feeling for me that Disney puts out enough quality entertainment for me that I can live with VMK closing. My enjoyment of Disney isn't solely based on the game.

If you saw the reactions I saw of kids in wheelchairs during the Festival of the Lion King show last October, you'll know exactly why I still love Disney. Money had absolutely nothing to do with it. There are so many reasons for me to still be a fan of Disney beyond VMK.

Bottom line. Aengus can't prove Disney is making money from VMK any more than Jellyrolls can prove Disney is losing money from it. But I tend to agree that if VMK drew as many numbers as Disney wanted to see, VMK would never have been closing.

I know I went there too, but I did bring it back around, and this just doesn't have anything to do with the original topic.

The point was Disney made an incredible profit, beat street expectations, and did it with the costs of VMK. They claim they extended the game because it exceeded expectations.

Someone with some vision surely could see the advertising potential they have with such a loyal and fanatical fan base. Don't forget this game was never heavily advertised either. The Disney rewards were a brilliant tool for Disney to save money for instance.