Disney Rises on 'Infinity' Interactive Game Potential

Source: Walt Disney Co.

Walt Disney shares are bucking the Dow Jones' downward trend, thanks to optimism about the potential of the "Disney Infinity" game platform the media giant unveiled in Hollywood on Tuesday.

The stock traded up more than 1 percent on Wednesday, after adding a percentage point on Tuesday.

Disney's latest move comes from its interactive division, which has been unprofitable for the last 16 quarters. It's lost more than a billion dollars over the past four years.

This is an ambitious effort to turn things around with a game that combines action figures and videogames. And in an unusual move for Disney, which prefers to keep its franchises separate, it's allowing kids to combine characters from Pixar and Disney franchises, like "Monster's Inc." and "Pirates of the Caribbean." The games will hit stores in June.

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Here's how it works: $75 buys a starter kit, which includes software for any of the consoles, a board where action figures can be plugged in, and three figures—Jack Sparrow from "Pirates," "Monster's Inc's" Sulley, and Mr. Incredible from "The Incredibles." Players can buy more characters—30 will be available at launch—as well as 20 add-on power discs to "enhance environments."

Disney is departing from its historical resistance to mash up Pixar and Disney characters because of the potential in the action figure/video game combo. The combination is a proven winner—Activison's Skylanders, which is based on entirely unknown characters, has been a huge hit. It did over $500 million in revenue in its first year for the video game studio, selling nearly 50 million action figures. Disney will be able to take advantage of the built-in fan base and awareness of its characters.

(Read More: The Most Anticipated Videogames of 2013.)

The big question is whether Disney will be able to appeal to the boys who dominate video game purchases, since its strongest franchises, like Princesses and Fairies, tend to be much stronger with girls. We'll also see what happens when Disney introduces mobile and online options, which is planned after the console launch.

Goldman Sachs analyst Drew Borst thinks the game platform "looks promising." "If Activision's Skylanders is any indication," Borst wrote, "Disney Infinity could reverse the Interactive losses."

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Deutsche Bank issued an earnings preview on the heels of this news, with a "buy" rating and a $58 price target. Analyst Doug Mitchelson didn't discuss the announcement, primarily focusing on Disney's largest division—media networks—but among his projections, he expects the interactive division to grow revenue more than 20 percent in fiscal 2013.

—By CNBC's Julia Boorstin; Follow her on Twitter: @JBoorstin