Disney’s taste for social gaming could be bigger than many people first believed.
The Wall Street Journal and others have reported that the Mouse is in talks to buy social games company Playdom for an estimated $500 million or more. No deal has been formally announced, and neither company is commenting on the reports. If completed, the acquisition would be the second notable expansion by Disney’s gaming arm this month.
The company had already broadened its footprint in the mobile space, acquiring music rhythm game maker Tapulous, makers of “Tap Tap Revolution” for an undisclosed sum. While it was a much smaller deal — and in a different segment of the market — the Tapulous acquisition had some characteristics in common with a potential Playdom buyout. Specifically, each deal gave Disney credibility in the gaming biz.
Disney and Playdom are hardly strangers. Disney’s Steamboat Ventures was part of a recent $33 million financing round for the company. In May, Playdom reached a deal with ESPN to create sports games for social media platforms. The first of those games will launch this fall.
Playdom is the industry’s third-largest developer of social games, behind Zynga and Playfish, with 42 million active users. Disney is reportedly interested in the company chiefly to expand its existing brands and characters into social games. This could mean anything from a “Wizards of Waverly Place” title for tweens to a “Tron: Legacy” tie-in for the studio’s big December release.
Those interests could go further, though, to include social media elements in its traditional retail games.
At last month’s E3, the annual trade show of the videogame biz, , a Disney exec talked about the impact of social gaming.
“The impact of connectivity is going to make more games more social,” said Graham Hopper, exec VP and g.m. of Disney Interactive Studios. “The notion of what social gaming is needs to permeate all forms of entertainment It’s not going to be confined to specific genre. … That notion of being able to play with people you know and share what you’re doing is going to fundamentally shake the entire industry.
The social media space has been increasingly attractive for game publishers. That demand, along with the growth in the category, has sent the buyout price for those companies sky-high.
Just last November, Electronic Arts paid $300 million (plus a $100 million buyout) for Playfish – which is a larger company than Playdom. Industry leader Zynga, meanwhile, continues to attract venture capital investors. Late last year, the company picked up another $180 million from Facebook investor Digital Sky Technologies and some minority partners. Earlier this month, Google invested another $100 million in the company to secure it as a launch partner for the upcoming Google Games.