Yesterday, Disney announced that it was spending more than half-a-billion dollars to buy Playdom, the third largest social game publisher responsible for Facebook games, such as Social City, Sorority Life and Wild Ones.
While this move makes it clear that Disney's ready to get elbow-deep in social gaming, one analyst tells Gamasutra that Disney's latest acquisition is looking "very expensive," and that the Mouse House might not get a good return on investment for several reasons, including the fact that social games are losing players by the week. For instance, the most popular Facebook game, FarmVille, dropped roughly 20 million players in a matter of months, and lesser games haven't fared much better.
"We believe the dynamics of the social gaming space are becoming increasingly commoditized and fad-based, and attracting gamers could become an exercise in increasingly aggressive marketing budgets, impacting the economics of the social gaming model," warns the analyst.
Other reasons for questioning Disney's big splurge are historical. The company bought the kid's social gaming site Club Penguin for the same deal several years ago -- offering a huge chunk of cash plus bonus performance incentives. And, the analyst says, Club Penguin never met Disney's expectations, and missed out on banking a few million dollars. Why would Playdom be any different? He also wonders why Disney paid double what EA paid for Playfish last year,. even though Playdom's monthly active user base is 15% smaller -- a great question which I don't expect have answered anytime soon.
Right now, what Disney's plans are with Playdom are still unknown, though I'll speculate Disney will let Playdom keep on with its more successful social games, close Playdom's lesser social games, launch the ESPN games the two companies were already working on together and then start looking in-house at existing brands to see if any of them would work on Facebook.
Games.com blog readers (yes, you!) have not been enthusiastic about the Playdom takeover by Disney. From the Games.com Facebook fanpage:
"Judging from how Disney manages to rewrite (and IMO RUIN) stories for animation, charge too much for their @#$% merchandise which is marketed directly to CHILDREN, I do not want Disney to take over the world or have more social networks or more of anything," one reader says.
"[Disney] just likes to, steal, and buyout other peoples success. Its a very cut throat company, who dosent care about the people who support it," says another.
Disney buys Playdom: Good move or bad?
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Showing posts with label Gamasutra. Show all posts
Showing posts with label Gamasutra. Show all posts
Thursday, February 9, 2012
Tuesday, January 10, 2012
Former Playdom GM takes the reins of social game start-up 519 Games
Hey, at least it's not another traditional game exec jumping ship. Former Playdom GM Lloyd Melnick (pictured) left the Disney-owned social game maker earlier this summer for 519 Games, a social game start-up that plans to release its first game in 2012. Melnick announced the move on the down-low through his personal blog on his first day as CEO, Aug. 29.
The studio is a joint venture between EW Scripps Company and Capitol Broadcasting. But more importantly, the GM-turned-chief has big ambitions for 519 Games. (Like, massive, turn-the-industry-on-its-head ambitions.) "We are currently building a fantastic team and will be one of the top five social gaming companies (both social web and social mobile) by the end of 2012," Melnick wrote in a blog post. "More details will emerge over the next few weeks."
Those details haven't exactly emerged yet, but it's only a matter of time. Melnick, who worked for Disney International as Playdom's head of international operations, had nothing but thanks and praise for the company. "It was this great collection of people that helped me learn and grow professionally that I can now move on to the biggest opportunity I have ever had," Melnick wrote. "Again, thank you all."
Melnick left Playdom and Disney just as doubts grew as to whether the latter could properly use the former to succeed in social games. Since then, Playdom has finally moved to take advantage of Disney's immense branding support, first slapping "Disney's" onto Gnome Town. A number of Playdom games featuring the company's properties will see the light in 2012. Playdom also announced Secret Agent X, a Facebook game shrouded in secrecy that lives up to its title--very sneaky, sis.
The studio is a joint venture between EW Scripps Company and Capitol Broadcasting. But more importantly, the GM-turned-chief has big ambitions for 519 Games. (Like, massive, turn-the-industry-on-its-head ambitions.) "We are currently building a fantastic team and will be one of the top five social gaming companies (both social web and social mobile) by the end of 2012," Melnick wrote in a blog post. "More details will emerge over the next few weeks."
Those details haven't exactly emerged yet, but it's only a matter of time. Melnick, who worked for Disney International as Playdom's head of international operations, had nothing but thanks and praise for the company. "It was this great collection of people that helped me learn and grow professionally that I can now move on to the biggest opportunity I have ever had," Melnick wrote. "Again, thank you all."
Melnick left Playdom and Disney just as doubts grew as to whether the latter could properly use the former to succeed in social games. Since then, Playdom has finally moved to take advantage of Disney's immense branding support, first slapping "Disney's" onto Gnome Town. A number of Playdom games featuring the company's properties will see the light in 2012. Playdom also announced Secret Agent X, a Facebook game shrouded in secrecy that lives up to its title--very sneaky, sis.
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