Breaking: Disney Acquires Club Penguin for $700 Million
I was just emailed by the PR group at Club Penguin, they were just acquired by Disney. Apparently it’s for $700 million?
I’ve been watching Club Penguin before it started to get mainstream, in fact I even played around, and built my own little Igloo. Social networks arn’t just for teens, young kids are using them too.
KELOWNA, BRITISH COLUMBIA, CANADA and BURBANK, Calif. – Aug 1, 2007 – As a part of its strategy for long-term growth through applying new technologies to the creation and global distribution of high-quality family entertainment, The Walt Disney Company (NYSE: DIS) has acquired Club Penguin, one of the fastest-growing online virtual worlds for kids. The addition of Club Penguin to Disney’s existing online assets will further strengthen the company’s objective of establishing clear leadership in online virtual worlds for kids and families.
Can you smell bubble? That amount of money is just ridiculous. What’s so compelling about it? Kids are using their allowance money to buy virtual goods in the game.
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With $3.5 million income from just memberships, the $700 million price doesn’t seem that bad at all. I wonder if Disney are going to start incorporating some Disney characters into the site.
Kids will pay a fortune just to have Mickey Mouse and especially Winnie The Pooh.
^ the above calculation was based on 700 000 users paying $5 / month
$5 being an average for membership costs per month
works about to be around $42 million a year in just memberships - that’s a quick profit turn around for Disney as it is
Jeremiah - getting kids hooked on Disney early is a big factor I believe in the purchase. While Disney says they won’t change it at all, I bet it won’t be long before you start to see Disney related items in the world.
I also see it as some kind of cross selling attempt. Disney had a bit of trouble getting their own network up and running if I remember correctly (check out the Disney Extreme site - not available to users outside the US).
So they’ve obviously decided to just buy their user base, which makes a lot more sense. Now you have 3 options: Piggyback on an existing network, build your own network or simply buy another one.
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Virtual Status symbols are just as relevant as real ones. In an era where kids are growing up in virtual worlds this is becoming more of a mass reality. I would say this is a great acquisition!
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