I know this isn’t particularly technical but since I’ve become deeply mired social media, I felt it’s worth considering for a moment what the acquisition of Playdom for an estimated $763 million by Disney will mean for online gaming as we know it? If you were unaware Playdom is the largest social game publisher of the online world. Honestly you must ask yourself what does this mean? Why should Disney care about Social Gaming as all they make movies for little kids right? Let’s examine a few interesting thoughts.
Unless you’ve been living on another planet or under an internet deprived rock you would know about the social media sites Facebook and Myspace. You would also know that Playdom is the social media gaming giant that has built games on top of these two entities. Although there are others like Zynga for instance who are closing in fast with some very creative marketing campaigns. This acquisition by Disney does widen the gap between these two players.
It also opens the door for Disney to tap into a captivated audience of gamers for potential Ad revenue in the billions. Some thing currently not represented in social gaming sector is the fact that gamers tend to spend hours engrossed in these alternate realities. Hours spent playing Social City for instance that could easily be populated with Disney propaganda. If you do not believe this will happen then you have never been to a Disney theme park, listen to Disney Radio nor watched any of the Disney owned channels. Disney does not promote anything that doesn’t in someway promote Disney in return.
Consider if competitor Zynga were to suddenly offer you products in Cafe World from the Coca-Cola company? Or even more appropriately ingredients for your recipes from Kraft Foods? More interestingly enough consider what Facebook’s open information policies means to these companyies. They are set to offer regionally focused advertising with truly pinpointed targeted demographics. We are about to be bombarded with virtual advertising from all angles turned to our specific likes or dislikes. This is why Google is courting Zynga, and exactly why Disney bought Playdom.
Returning to the acquisition of Playdom by Disney, don’t be surprised if all of the sudden your Social City has billboards for the cool new Disney movie. I’ll wager that you’ll likely see Mickey Mouse, Elmo, Piglet or the Power Rangers walking down your virtual streets. You’ll build playgrounds for your virtual children with these characters to play in. All while tuning you into the Disney über-infectious marketing machine.
Although I believe Zynga has far more short term potential with Cafe World in this advertising profiteering I believe that ultimately the long term winner in this will be Disney. Obviously this is but one man’s opinion however, the pieces of this puzzle fit together too nicely to be summarily ignored. Let’s wait and see what develops.
ABOUT THE AUTHOR: Mikel King has been a leader in the Information Technology Services field for over 20 years. He is currently the CEO of Olivent Technologies, a professional creative services partnership in NY. Additionally he is currently serving as the Secretary of the BSD Certification group as well as a Senior Editor for the BSD News Network.
Press Release:
THE WALT DISNEY COMPANY TO ACQUIRE LEADING SOCIAL GAME DEVELOPER PLAYDOM
Burbank, California – July 27, 2010—Advancing on its goal of bringing consumers its well-known stories, characters and brands in ever more engaging ways, The Walt Disney Company has agreed to acquire Playdom Inc., one of the leading companies in the fast-growing business of online social gaming.
Playdom shareholders will receive total consideration of $563.2 million, subject to certain conditions, and a performance-linked earn-out of up to $200 million.
In just two and a half years of operation, Playdom has established itself as a pacesetter in building popular games for social networks enjoyed by consumers around the globe. Through well-known titles like Social City, Sorority Life, Market Street and Bola, Playdom engages an estimated 42 million active players each month.
By acquiring Playdom, Disney will strengthen its already-robust digital gaming portfolio, acquire a first-rate management team and provide consumers new ways to interact with the company on popular social networks like Facebook and MySpace.
“We see strong growth potential in bringing together Playdom’s talented team and capabilities with our great creative properties, people and world-renowned brands like Disney, ABC, ESPN and Marvel.” said Robert A. Iger, President and CEO, The Walt Disney Company.
“This acquisition furthers our strategy of allocating capital to high-growth businesses that can benefit from our many characters, stories and brands, delivering them in a creatively compelling way to a new generation of fans on the platforms they prefer,” Iger added.
“We are at the start of a once-in-a-generation opportunity to transform the way people of all ages play games with their friends across devices, platforms and geographical boundaries,” said Playdom Chief Executive Officer John Pleasants. “Disney is an incredibly forward-thinking company that shares our vision and is the ideal partner to further our mission to bring great entertainment to people around the world.”
Playdom, which has 15 game development studios, will remain headquartered in Mountain View, California. Pleasants will become an Executive Vice President of the Disney Interactive Media Group (DIMG) and General Manager of Playdom, reporting to DIMG President Steve Wadsworth.
Disney expects Playdom’s expertise in social gaming software tools, business intelligence and rapid innovation to broadly benefit DIMG, which already has a substantial global presence in online, console and mobile gaming
The transaction, which is subject to clearance under the Hart-Scott-Rodino Antitrust Improvements Act and certain non-U.S. merger control regulations, is expected to close by the end of Disney’s 2010 fiscal year.
About The Walt Disney Company
The Walt Disney Company, together with its subsidiaries and affiliates, is a leading diversified international family entertainment and media enterprise with five business segments: media networks, parks and resorts, studio entertainment, consumer products and interactive media. Disney is a Dow 30 company and had annual revenues of about $36 billion in its most recent fiscal year.
Forward-Looking Statements:
Certain statements in this press release may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements relate to a variety of matters, including but not limited to: the operations of the businesses of Disney and Playdom; the timing and consummation of the transaction; the expected benefits of the integration of the two companies; the market for online social gaming and other statements that are not historical fact. These statements are made on the basis of the current beliefs, expectations and assumptions of the management of Disney regarding future events and are subject to significant risks and uncertainty including uncertainties regarding the business of each company, the receipt or timing of regulatory approvals and continued consumer acceptance of online social gaming.
Disney undertakes no obligation to update or revise these statements, whether as a result of new information, future events or otherwise. Additional factors that may cause results to differ materially from those described in the forward-looking statements are set forth in the Annual Report on Form 10-K of Disney for the year ended October 3, 2009 and in subsequent reports on Forms 10-Q and 8-K and other filings made with the SEC by Disney.
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