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Club Penguin Missed Multi-Million Dollar Earnout In 2008
by Kris Graft [PC, Console/PC]
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May 6, 2009
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Disney-owned virtual world Club Penguin fell short of earnings targets for 2008, meaning the three founders of the company will miss out on half of a $350 million earnout.
But founders Lane Merrifield, Dave Krysko and Lance Priebe will wipe away their tears with the $350 million that Disney had already agreed to paid upfront when it bought kid-friendly Club Penguin in August 2007.
In Disney's quarterly earnings report this week, the entertainment giant confirmed that Club Penguin missed predetermined earnings targets for 2008. However, the founding trio may still be able to snag the remaining $175 million of the compensation deal if Club Penguin meets 2009 targets.
Disney did not disclose exactly the exact earnings targets. The company announced in August 2007 that it would be acquiring Canada-based Club Penguin for $350 million upfront, with the possibility of paying out an addition $350 million for a grand total of $700 million.
Club Penguin's revenues come from subscriptions and virtual item sales.
Disney's Interactive Media division, which includes Club Penguin, reported quarterly losses of $61 million yesterday, a two percent year-on-year increase.
Disney has been making big moves to become a more prominent player in video games. In recent years, DIS acquired Propaganda, Avalanche Software and Climax Racing, as well as Warren Spector's Junction Point Studios.
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