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Disney Gets Its Game Face On

Company will redouble efforts with Playdom and Club Penguin to make content current with app trends

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When Disney acquired kid-centric virtual world Club Penguin in 2007 and social gaming company Playdom in 2010, many industry experts expected the company to use its intellectual property to grow those businesses. That hasn’t necessarily been the case.

“The benefit to each of those companies in being owned by Disney is that you can take [Playdom’s expertise in social gaming and Club Penguin’s in kid-focused virtual worlds] and exploit that competitive advantage you already have by taking really great iconic brands and leveraging them. And they haven’t been able to do that yet,” said Wedbush analyst Michael Pachter.

Pachter’s criticism isn’t lost on Disney. Last year, “we didn’t merge those two things particularly well together,” said svp of social games John Spinale, referring to Playdom and Disney content and character franchises. He added that he doesn’t expect the missed opportunity to be the story line for 2012, however.

For roughly a year, Playdom has been developing Disney Animal Kingdom Explorers, a hidden-object game in the vein of Playdom’s top hit, Gardens of Time, which is based on Disney’s Animal Kingdom theme park in Orlando, Fla., and will debut on Facebook in early April. Coupled with Marvel: Avengers Alliance—launched earlier this month, but which Playdom had been developing preacquisition—Explorers makes for the second of three new Playdom titles this year to integrate with Disney brands.

Rather than bringing Disney characters into Club Penguin, Disney has been more focused on cross-pollinating the virtual world’s brand throughout the company. Popular character Captain Rockhopper has been mingling with Disney World visitors alongside Mickey Mouse and Donald Duck for years, and more than 30 million Puffles (pets for users’ penguin avatars) were adopted last year. Paul Verna, senior analyst at eMarketer, said Disney has “clearly put a lot behind building [the Puffle] brand” but that it hasn’t captured the zeitgeist like, say, an Angry Birds. That app’s popularity gets at a larger struggle facing Club Penguin.

Disney boasts that Club Penguin has more than 175 million registered players, up from more than 150 million. But as of December 2011, Club Penguin’s U.S. traffic year over year dropped 16 percent to 2.9 million unique visitors—and fell 31 percent versus 4.2 million domestic uniques in December 2009, per Nielsen. Meanwhile, sites in Nielsen’s kids/games/toys category collectively shed just 4 percent and 9 percent of U.S. traffic, respectively, in the same periods.

Disney claims that Club Penguin is the most popular virtual world for kids. But “kids are definitely more interested in playing on smartphones and tablets,” said Verna. “So the world has moved on, and Disney does not seem to have caught up when it comes to gaming.”

Disney did roll out the Puffle Launch app for the iPhone, iPad and Android devices last year. The company said the app hit No. 1 in the Apple App Store’s kids’ category in 45 countries. Meanwhile, Josh Martin, svp and group director of media strategy at ID Media, said the company didn’t sufficiently promote the app because “I don’t think it took hold to a strong degree.”

Disney said it has an aggressive mobile road map for Club Penguin but declined to reveal details of its plans. Chris Heatherly, Disney’s vp of product development and franchise, responded in an email: “We continue to invest in new technologies and content that make Club Penguin a fun and safe place for kids to play online. We understand the trends with kids and digital play, and wherever kids are, we will be. We have a lot of surprises in store this year.”





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