Mergers and Acquistions News
Categories: Media & Information Services
July 28th 2010, 11:55AM
Disney will acquire the social games developer Playdom for $563.2 million (£360.8 million) as Disney seeks to move into the online games market.
The deal, which includes a possible $200 (£128 million) earn-out based on performance, is part of Disney's wider strategy to find new ways to channel its brand through emerging outlets.
Playdom creates online games that feature on social networking sites like Facebook and MySpace. Mobsters and Social City are well-known examples.
The developer has massive potential. It has only been operating for two and a half years, but is already estimated to have 42 million users of its games every month.
Robert A Iger, president and chief executive officer, of Disney, said the acquisition would help the media giant interact with consumers through more non-traditional ways.
"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."
The deal is expected to close by the end of this fiscal year.
Analyst Mike Hickey told Reuters the deal signals the arrival of social gaming as a dominant force.
"When you look for growth in the near and medium term, it's digital online that will likely be the real contributor," he said.
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