Disney Announces Playdom Acquisition for $563.2M, Plus Up to $200M Earn-Out

In a deal that has been in the work for weeks, Disney announced today that it would buy Playdom for $563.2 million, subject to certain conditions, as well as a performance-linked earn-out of up to $200 million.

Playdom, the second-largest developer on Facebook, successfully transitioned over the last year from its home base on MySpace, and now pulls in a total of 42 million “estimated active players” per month, according to the press release — 39 million of those are on Facebook, according to our AppData service.

Its investors have hinted at an initial public offering since last year, but we’ve also heard that the company has been busy talking to interested media companies, including News Corp, earlier this year; TechCrunch and VentureBeat reported the pending sale to Disney, last week. This deal has been in the works for at least four or five weeks, and may have closed weeks ago, according to an industry source we spoke with.

Chief executive John Pleasants, a veteran game executive, “wowed the Disney board with a presentation on social gaming at a recent company retreat,” according to The New York Times, and now he “is expected to work to develop new titles based on Disney characters and franchises.”

Pleasant’s presentation no doubt showed off the company’s big in-house hit this year, Social City, as well as Bola, a soccer game developed by Three Melons, a company it bought a few months ago. The two titles are the best results so far from the company’s build-and-buy strategy, which has included seven acquisitions so far in 2010 and numerous new games.

One of Playdom’s biggest rivals, Playfish, was bought by Electronic Arts last year in a deal worth up to $400 million, a watershed acquisition in social gaming that until today had been the largest purchase in the emerging industry. Playdom’s larger rival, Zynga, is valued up to more than $6 billion, we’ve heard from industry sources, it has raised hundreds of millions of dollars. It is on track to make $500 million this year, according to our Inside Virtual Goods report, although it’s possible that the company will make more, as some reports are indicating.

Disney had already been moving closer to Playdom lately, with subsidiary ESPN signing a co-development agreement with the game-maker in May, and with investment arm Steamboat Ventures joining in a $33 million second portion of its first round this past June. Disney Interactive Media Group President Steve Wadsworth tells PaidContent that Steamboat had participated in the latest funding “without any thought that we’d buy out this company,” but explains that since the investment, the two had gotten “a lot closer.”

The company has raised a total of $76 million in venture funding, reportedly at a single, $260 million pre-money valuation. The acquisition is expected to close by the end of Disney’s 2010 fiscal year, the company says.

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19 Responses to “Disney Announces Playdom Acquisition for $563.2M, Plus Up to $200M Earn-Out”

  1. Star Search Casting says:

    Wow its been amazing 3 years of skyrocketing growth the social gaming business. First Playfish selling to EA for an incredible 400 million and now Playdom going to Disney for 563 million.

    Makes me wonder if anyone is looking at buying Zynga too. Or maybe Zynga has grown so large that no one can afford them anymore. I once thought that Facebook should look at buying Zynga. Now it would have to be a very large company like Sony or Microsoft who could afford Zynga.

    I look forward to watching how things play out.

  2. Disney’s Acquisition of Playdom Is Another Symbolic Moment in the Evolution of Social Gaming says:

    [...] Disney’s acquisition of large social game developer and publisher Playdom yesterday marks another symbolic moment in the evolution of social gaming on Facebook (and MySpace, [...]

  3. Virtual Worlds News > Disney acquière Playdom et Tapulous pour devenir un géant du jeu en ligne says:

    [...] y a ensuite l’acquisition de Playdom pour plus de 750 millions de $ : Disney Announces Playdom Acquisition for $563.2M, Plus Up to $200M Earn-Out. Playdom est un éditeur de social games de premier rang qui compte des titres comme Sorority Life, [...]

  4. Disney Acquires Social Gaming Company, Playdom! | Emma Kumakura says:

    [...] Inside Social Games: Disney Announces Playdom Acquisition for $563.2M, Plus Up to $200M Earn-Out [...]

  5. New Hires in Social Gaming: CrowdStar, Playdom, Zynga, & More says:

    [...] of the activity this week centered around changing roles and titles due to the recent acquisition of Playdom by The Walt Disney Company. All the same, there was at least one major hire this time around, for [...]

  6. Zynga Buys Music Pets Developer Conduit Labs says:

    [...] Playdom was bought by Disney, we got into the habit of listing out its previous acquisitions each time it made a new one, to [...]

  7. Playdom Outdoes Itself with New Facebook Game, City of Wonder says:

    [...] Disney-acquired Playdom has outdone itself with a new Facebook app discovered by the folks over at Gamezebo. Called City of Wonder, it’s a game that combines some of the best parts of Playdom’s past titles, as well as socialized mechanics of others. [...]

  8. Disney Mobile Announces Katy Perry Revenge says:

    [...] Disney acquired Playdom for $563.2 million, it had also picked up one of the top mobile developers on the iPhone, Tapulous. Today, Disney [...]

  9. Friend Quizzes, Dating and Video Chat Reach This Week’s List of Fastest-Growing Facebook Apps by MAU says:

    [...] the latest city builder, the other a retail game. The specifics of genre may be less important than suddenly having a Disney budget for advertising — although we did find City of Wonder to be a genuinely good game. We’ll cover the rest [...]

  10. Rayman Raving Rabbids Go Home says:

    Raving Rabbids Teil fünf erscheint im November.

  11. New Hires In Social Gaming: iWin, Playdom, Wooga, & More says:

    [...] Robertson — In an internal change, stemming from Disney’s acquisition of Playdom, Robertson’s official role changes from Director of Technical Operations at Playdom, to [...]

  12. What Disney Got in the Playdom Acquisition says:

    [...] Disney’s July acquisition of Playdom has certainly had that effect, setting off a new round of speculation on some familiar themes: Is social gaming a real business, or a bubble? Has the industry produced viable companies? Is Playdom worth what Disney paid? [...]

  13. Media conglomerates turn their backs on consoles | Games Brief says:

    [...] has been on an acquisition spree recently, acquiring social games publisher Playdom for up to $763 million in July 2010 and iPhone games company Tapulous just a few weeks before that. Iger has promoted [...]

  14. Social Games & Advertising « MauricioGochez's Blog says:

    [...] Network. Además, grandes compañías están incursionando dentro del mundo del social gaming como Disney, que recientemente adquirió Playdom y Google compró el desarrollador de social games para móviles, [...]

  15. What Core Games Bring to Social Games says:

    [...] Where these big names went, bigger companies followed. EA bought Playfish in 2009 and Disney acquired Playdom less than a year later. Today, even core game franchises like Red Dead Redemption and Dragon Age 2 [...]

  16. Disney Interactive Segment Reports Losses, Including $34 Million Accounting Charge For Playdom Acquisition says:

    [...] the Interactive Media segment’s results for the rest of the year. Disney acquired Playdom in late July of 2010 for $563.2 million with a $200 million [...]

  17. Inside Social Games · Disney Playdom Staffs Up at Dream Castle for Social Games Based On Disney IP says:

    [...] The Walt Disney Corporation is ready to release social games based on its core intellectual properties through Sorority Life developer Playdom, more than a year after the $563.2 million acquisition. [...]

  18. Inside Social Games · Disney’s first branded Facebook game will be Marvel: Avengers Alliance says:

    [...] than a year. According to USA Today, Playdom and Marvel were already at work on the game before Disney’s 2010 acquisition of Playdom for $563 million put both companies under the same umbrella. Disney acquired Marvel in 2009 for more than $4.24 [...]

  19. Marvel Avengers Alliance marries turn-based combat to rich comic book IP says:

    [...] the rights to develop the game from Marvel after Marvel was bought by Disney in 2009 but before Disney acquired Playdom in 2010. When the game finally debuts on Facebook in North America, Marvel Avengers Alliance will have been [...]

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