JULY 27, 2010 • The Walt Disney Co. acquired the privately held Playdom for $563 million. Based in Mountain View, Calif. Playdom is best known for such games as Mobsters and Sorority Life. Both titles are popular on Facebook and MySpace. Should Playdom meet expectations under the Disney umbrella, the corporation will pay out an additional $200 million.
Impact: Games on social networks are of course hot, and as we covered back in May, Playdom was one of the fastest growing providers of games for social networks. The company had received significant investment and had been on an acquisition spree. However, the competition in delivering content on social networks is heating up as established game companies and large media brands enter the space. Many games have rapidly peaked and shown a quick decline. Playdom may have seen the writing on the wall and decided that it was better to join forces now than try and compete with the big boys down the road.
