Disney EchoEar Grand Mouseter
Joined: April 1992
||Posted: July 24, 2010, 11:03 am
There are a lot of news references today in Google News Advanced Search about the possible acquisition by The Walt Disney Company of Playdom, an online game designer. These are two such articles, but if you want to browse around for additional factual tidbits, feel free. The articles below state an agreement could be reached within the next week.
This may be Disney's way of understanding how to make that kind of online social culture work to their promotional and ad-partner advantage, understand the pitfalls in order to avoid those, get someone else to design, manage, and moderate them, before jumping into that end of the pool, etc.
One implication some online Disney fans might want to cross fingers for is the return of a Virtual Magic Kingdom-like social and gaming environment. Disney had this kind of social-gaming online presence before (VMK opened to celebrate the 50th Anniversary of Disneyland and the founding of the theme parks division of Disney back in Summer 2005-Summer 2008 or so. When WMK left online there were howls of protest and the wailing and gnashing of teeth. Fans can only hope that this news means VMK possibly could live again sometime in the future.
Disney Said to Discuss Buying Playdom, Maker of Games Played on Facebook
By Douglas MacMillan and Andy Fixmer - Jul 24, 2010
Walt Disney Co. is in talks to buy Playdom Inc., maker of video games played on the Facebook social-networking website, according to a person with knowledge of the negotiations.
An agreement may be reached as soon as the coming week, said the person, who sought anonymity because a deal hasn’t been reached. Playdom may be sold for more than $500 million, the Wall Street Journal reported yesterday. TechCrunch.com reported the talks earlier.
Playdom would extend Disney’s expansion in online and mobile games. This month, the company acquired Tapulous Inc., a developer of music-related games for Apple Inc.’s iPod and iPad. Disney, the world’s largest media company, is attracted to the growth of mobile games and mobile media, Steve Wadsworth, head of the Internet unit, said in a July 1 interview.
“Playdom is the biggest guy left that’s independent that’s not crazy expensive,” said Michael Pachter, a Los Angeles-based analyst with Wedbush Morgan Securities.
Jonathan Friedland, a spokeswoman for Burbank, California- based Disney, declined to comment.
Mountain View, California-based Playdom raised $33 million in June, from venture capital groups including Disney-backed Steamboat Ventures, which invests in digital media, consumer and technology companies. The funding brought the total raised by the company to $76 million.
Playdom announced a content partnership with Disney’s ESPN sports cable channel in May.
Disney rose 54 cents to $34.13 today in New York Stock Exchange composite trading. The shares have gained 5.8 percent this year.
Quoting online Wall Street Journal:
JULY 24, 2010
Disney in Talks to Buy Playdom
By NICK WINGFIELD And SPENCER ANTE
Walt Disney Co. is discussing a deal to acquire Playdom Inc. for more than $500 million, people familiar with the matter said, as the burgeoning category of games played on social networks heats up.
Disney is keen to use Playdom to develop a bigger presence in social games, in which players compete against friends for high scores and other achievements on social networks. The popularity of social games like Farmville, made by Playdom rival Zynga Inc., has skyrocketed by piggybacking onthe growth ofFacebook Inc., which makes it easy for players to rope members of their social circles into playing the games too.
People familiar with the matter say Disney plans to use Playdom, based in Mountain View, Calif., to incorporate more of its iconic brands and characters into social games. Disney already has a deal for Playdom to develop social games using Disney's ESPN brand and is already an investor in Playdom through the entertainment company's venture-capital fund, Steamboat Ventures. The Disney fund recently participated in a $33 million financing round, bringing to $76 million the total financing raised by the start-up, Playdom said at the time.
Disney has steadily increased its investments in the games market, including a recent deal to acquire Tapulous Inc., a maker of music games for the iPhone and other Apple devices.
The talks with Disney, based in Burbank, Calif., are another sign of the eagerness of established entertainment companies to tap into the growth of social games. Last year, game publisher Electronic Arts Inc. agreed to pay up to $408 million to acquire a social-games start-up, Playfish Ltd. The clear leader in social games, Zynga, is believed to have a value in the billions of dollars based on recent rounds of private financing and is considered to be a likely candidate for an initial public offering, according to people familiar with the matter.
News of talks between Disney and Playdom was reported earlier by TechCrunch.
Playdom currently ranks third among makers of social games on Facebook, with about 42 million active monthly users of its games, compared with 211 million for Zynga and 52 million for Electronic Arts, according to AppData, a firm that monitors applications on Facebook. Playdom's most popular games include Social City, which allows players to build and run their own virtual cities.
In a research report published last December by investment bank ThinkEquity, Playdom CEO John Pleasants said the company makes 90% of its money by selling virtual goods within its otherwise-free games, with another 10% coming from advertising. In its popular Mobsters 2 game on Facebook, for example, users can purchase virtual weapons, cars and explosives to help carry out vendettas.
Mr. Pleasants said the company generated north of $50 million last year and was profitable. At the end of last year, Playdom had 220 employees, tripling its head count in the fourth quarter of last year. Compared with traditional video games, Web-based social games tend to be cheaper to produce and easier to grow thanks to the viral nature of social networks.
—Ethan Smith contributed to this article.
End of quoted articles.