Apparently social gaming companies are the new black this season for mega-corporations as two major acquisitions were announced yesterday.
We reported on Monday that The Disney Company was being rumored to be in talks with Playdom to purchase the social gaming company for between $400 million to $750 million. On Tuesday that became a reality when it was announced that the deal was for a total consideration of $563.2 million, subject to certain conditions, and a performance-linked earn-out of up to $200 million for a grand total of $763.2 million. The deal is expected to close by the end of Disney’s 2010 fiscal year.
“We see strong growth potential in bringing together Playdom’s talented team and capabilities with our great creative properties, people and world-renowned brands like Disney, ABC, ESPN and Marvel,” said Robert A. Iger, President and CEO, The Walt Disney Company. Mr. Iger went on to add, “This acquisition furthers our strategy of allocating capital to high-growth businesses that can benefit from our many characters, stories and brands, delivering them in a creatively compelling way to a new generation of fans on the platforms they prefer.”
Mr. Iger’s comments seem a bit lofty at first, but then you consider on the same day it was announced that game retailer GameStop is purchasing the Kongregate gaming site by Aug. 1st of this year, and it seems that everyone is going a bit slap happy on the concept of social gaming.
J. Paul Raines, Chief Executive Officer of GameStop, said, “Kongregate advances GameStop’s digital strategy by providing a gaming platform for casual, mobile and browser games that can be promoted and played by our existing gamers. We welcome the Kongregate team to the GameStop family.”
While GameStop says the current Kongergrate team will stay on to run the site, it does seem to be a big leap for the game retailer to be jumping into the actual production of games. Disney at least has a history with digital properties, and while it still may seem a bit of a stretch for the House of Mouse, it isn’t completely unprecedented. GameStop, to the best of my knowledge, has little to no background in anything close to what is happening here, and that is never a good mix in a business deal. (no sale price has been named as of yet)
What concerns me is the fickle nature of the public. Yes, Zynga and its flagship game FarmVille, have taken off, but the historical data on these types of games is not that long as of yet. While all of this may be hot now, with companies receiving huge valuations, it could all come crashing down in next to no time as something else grabs the collective attention of the masses.
Be that as it may, the major companies have found the world of social media, who knows just how far they expect to expand it.
What say you? Are you ready for your new social gaming overlords?