Disney Buys Playdom in $763 Million Deal, Becoming Hollywood Leader in Social Games

NEW YORK TIMES – TECHNOLOGY

By BROOKS BARNES and CLAIRE CAIN MILLER

LOS ANGELES — The Walt Disney Company on Tuesday became Hollywood’s leader in the booming social game business by acquiring Playdom in a deal worth as much as $763.2 million.

Playdom is one of a cluster of tech start-ups that make simple online games and sell virtual goods — like a $2.50 outfit for a character in Playdom’s Sorority Life, in which players shop, party and go to a spa. Such companies have grown by taking advantage of rapidly expanding social networks like Facebook.

Disney will initially pay $563.2 million for Playdom, which is the No. 3 social game company on Facebook with about 42 million monthly players. The deal includes $200 million in additional payments if Playdom achieves growth thresholds that were not made public.

John Pleasants, Playdom’s chief executive, will join Disney as an executive vice president and will report to Steve Wadsworth, president of the Disney Interactive Media Group. Mr. Pleasants, who impressed the Disney board with a presentation on social games at a recent company retreat, is expected to work to develop titles based on Disney characters and franchises.

As social games becomes a more crowded and difficult field — several hundred new games are introduced on Facebook weekly and most go nowhere — brands that can be used as the basis for titles are becoming more important.

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