Disney Buys Social Gaming Company Playdom for $732.6 Million

Social gaming is the latest craze for investors. Whether it’s justified or not is debatable, but at least these companies are making money. With Zynga valuated at several billion dollars and no intentions to sell, those wanting to get in on the game, so to speak, are looking elsewhere. For Disney, this meant Playdom. The entertainment giant has acquired the social gaming startup for $532.6 million plus an additional $200 million earn-out.

"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," Robert A. Iger, President and CEO of The Walt Disney Company, said.

"We are at the start of a once-in-a-generation opportunity to transform the way people of all ages play games with their friends across devices, platforms and geographical boundaries," Playdom CEO John Pleasants said. "Disney is an incredibly forward-thinking company that shares our vision and is the ideal partner to further our mission to bring great entertainment to people around the world."

Playdom is one of the biggest social gaming companies around and boasts about 38 million monthly users. It is the number one such company on MySpace and fourth on Facebook. Playdom is behind titles like Social City, Sorority Life, Market Street, Bola and the older but still very popular Mobsters.

It has also been expanding rapidly lately, having acquired eight social gaming startups in the past year. It has recently raised $33 million in funding from various venture capital investors. In total, it has raised $73 million in the two and a half years of existence. Interestingly, Playdom counts Disney’s venture capital arm, Steamboat Ventures, as one of its investors having contributed in the latest round.

Another popular social gaming company, Playfish, was acquired by EA last fall for $275 million and $100 million in earn-outs. At the time, Playfish was quite a bit larger than Playdom, an indication that the market, or at least interest in it, is evolving rapidly.