Reports are flying in this week that Disney is in late stage talks to buy Playdom for $600 million. The rumors are strongly confirmed by TechCrunch sources and seem to have some weight. What would Disney have to gain by acquiring a company like Playdom? A lot. Playdom touches 40,000,000 MAUs and produces great games like Wild Ones. The company has strong management in its ex-EA CEO John Pleasants and CFO Christa Quarles. I take a look at some of the reasons they would be interested.
Social Gaming = Additional Revenue
The obvious first reason is that every large company in the digital space has an eye on the rapidly growing social games industry. The companies are all earning strong revenues, and companies with strong management like Playdom are poised to continue to grow revenues as the market further expands into social networks outside of Facebook and MySpace. From a numbers perspective I’m sure that Playdom is making a pretty appealing case in the board room, and are probably glossing over the fact that Facebook application growth numbers have been down in the last 6 months.
Another reason is the matching of styles. Playdom’s games have a strong aesthetic appeal and high production values. When I look at a game like Wild Ones it’s not really a stretch to imagine those characters being some Disney licensed characters, maybe the Rescue Rangers, and instead of throwing bombs the items would of course be vegetables and nuts. That said, the game could have massive appeal and work to boost the strength of a Disney brand.
Strong Web Development Capabilities
Finally, Playdom has a strong development team as they have been acquiring companies like Merscom Games, Three Melons and more. High quality web developers could be useful to Disney in other ways, but if Playdom is smart they will try to do what Playfish did at EA and secure a hands-off deal where the parent company doesn’t mess around too much with the existing formula. What do you think of the potential partnership?