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Club Penguin sells for $700m, to Disney

August 1st, 2007 (Visited 2336 times) Tags:

Techcrunch article.

$35m in profit next year, on $65m in revenue. Yes, that’s a 50% profit margin. 700,000 paying people and 12m registered.

The WSJ says the purchase price is $350 million in cash. Disney could pay up to another $350 million if certain performance targets are reached over the next couple of years, until 2009.

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11 Responses to “Club Penguin sells for $700m, to Disney”

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Trackbacks & Pingbacks

oh god disney bought out club penguin - The Something Awful Forums wrote on August 1st, 2007 at 5:49 pm:

[...] if you must know, it was on raph koster’s blog http://www.raphkoster.com/2007/08/0…700m-to-disney/ [...]

Game de Zigner » Valaddin wrote on August 4th, 2007 at 11:36 am:

[...] покупая аксессуары. Изначально увиде новость на блоге Рафа Костера. Тегов нет Комментариев: [...]

US Publishers Can’t Buy Asia’s Virtual Goods Lead « Free To Play wrote on August 23rd, 2007 at 9:13 am:

[...] Look no further than Club Penguin making $35M profit on $65M annual revenue. [...]

Tobold's MMORPG Blog: Oh, forget about market share! wrote on December 14th, 2007 at 4:45 am:

[...] of revenue in 2006, just 7% of that of WoW. Second life is “barely profitable”. Club Penguin makes $35m of profit on $65m of revenue. In financial terms World of Warcraft is the whale among the minnows, and none of the competitors [...]

Reader Comments

Ola Fosheim Grøstad said on August 1st, 2007 at 6:07 pm:
It says 350 in cash, but uhm… that’s like 500USD per paying customer. That can’t be right.
Raph said on August 1st, 2007 at 6:39 pm:

A 10x multiplier on earnings is not at all unusual for calculating valuation. In this case, the fact that half the deal is contingent on metrics means that there’s some concern about slippage on users or revenue per head, and long-term sustainability, probably.
Ola Fosheim Grøstad said on August 1st, 2007 at 6:51 pm:
I really don’t understand what they are thinking when putting a price on these systems. It’s not like club penguin will be able to retain users for 10 years… I mean, this is like 7 WOWs, FFS! LOL
Philip Isles said on August 1st, 2007 at 7:47 pm:
I’m a bit surprised by this, especially considering the fact that Sulake (Habbo Hotel) did Disney’s Virtual Kingdom.
Kerri Knight said on August 3rd, 2007 at 8:47 pm:
Put what Kim Pallister said last week, Raph has been pointing out the same with online social networks, and this news all together.

Games as Art? or Games as Marketing?
Morgan Ramsay said on August 3rd, 2007 at 10:58 pm:
Games as Art? or Games as Marketing?

I wrote an unpublished paper not too long ago in which I argued that the question of whether games are art is irrelevant as long as that question doesn’t interfere with innovation and marketing in interactive entertainment. Unfortunately, that question is particularly damaging to the business of video games, so much to the point of wasting resources on aspects of games that are better spent elsewhere.
Amaranthar said on August 4th, 2007 at 7:14 am:
Just thinking about how marketing affects sports and extending…

“Disney’s Wondeful World of Warcraft”?

“Bounty Second Life, the quicker picker upper”?

The Federal Express RMT, “When it absolutely, positively has to be there overnight.”

“BMW Mech Warrior, the ultimate driving machine”

“Nike Darkfall, just do it”