Coming from a GamesIndustry interview with Activision CEO Eric Hirshberg...
"I never thought [toys-to-life] was dead, I just thought it was overcrowded. There was an imbalance between supply and demand. I think at one point there was a couple of hundred linear feet of shelf space in stores featuring toys-to-life games from four of the biggest marketers of kids IP in the world.
A new market had been created with Skylanders. It was a way of making toys relevant to 21st century kids, who are interactive entertainment consumers in their DNA. And so, on one level, it wasn't surprising to see that rush into the genre. But it certainly did create a more difficult macro environment. Skylanders... we're still behind it. We have supported [last year's game] Imaginators with expansion packs in the way that we didn't with previous games. We have a great Skylanders TV series on Netflix. We have a mobile game in development that we are very excited about. And we are going to see what the right way is to continue to invest in it.
None of the current generation of consoles have quite captured that family, casual gaming market in the same way as the Wii did. Not even the Wii U. Skylanders' bread and butter is the kids, family and casual gaming market. So the absence of that stronghold in the hardware ecosystem was a difficult thing as well. But look, we want to go where gamers are. Certainly kids are still playing games, they're just playing them on different platforms. A lot of casual gaming has moved to mobile. With Skylanders, we will find our way."