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Disney CEO: Social Gaming 'Real, Here To Stay'
by Kris Graft [PC, Console/PC]
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August 11, 2010
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For Walt Disney CEO Bob Iger, social gaming is the real deal -- and it better be, as the company has spent hundreds of millions of dollars in acquiring companies like Club Penguin, and most recently, Playdom.
"It became pretty clear to us that game playing and social networks is real, here to stay," said Iger in an earnings call this week [via Seeking Alpha]. "Obviously, the multitude of people that are already playing, there are half a billion people who are members of Facebook already. About 40 percent of those people participate in game playing."
Last month, Disney said it acquired Sorority Life developer Playdom for $563.2 million, plus performance-based earnouts of up to $200 million. In 2007, Disney bought up kid-friendly game community Club Penguin for $350 million in cash plus a possible $350 million in performance-based earnouts -- although Club Penguin ended up missing targets, and did not receive the bonus.
Cowen and Company analyst Doug Creutz said following the Playdom acquisition that the deal "looks very expensive," and questioned the soundness of the transaction, particularly when compared to Electronic Arts' 2009 acquisition of PlayFish for up to $400 million.
In July, Disney also acquired Tapulous, the social mobile game developer behind Tap Tap Revenge music rhythm games on iOS devices.
With that much focus on the emerging online social gaming space, Disney's Iger said company spend would reflect the shift. "As you look at our strategy, you’d see a blend of investment and some reallocation of investment from the console side to basically this multifaceted side [social games]," he said.
But he assured that Disney Interactive Studios will continue to invest in console game development. Upcoming titles for consoles include Disney Epic Mickey, Tron: Evolution and Guilty Party.
"So, we’re going to continue to [invest in] console games. They will primarily be Disney-branded, not all Disney-branded, and they will in most cases be derivative of product that’s been made for other segments of the company, like our motion pictures," Iger said.
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