Disney Buys Playdom for $563 Million

If you thought EA's purchase of Playfish for $275 million was expensive, that's nothing... Disney has just confirmed earlier rumors of a Playdom acquisition, and Disney will pay Playdom shareholders $563.2 million, "subject to certain conditions, and a performance-linked earn-out of up to $200 million." The transaction is expected to close at the end of Disney's fiscal year.

Playdom had been on an acquisition spree, picking up seven developers in as many months, but now it's ultimately been acquired by one of the largest media firms in the world. The backing from Disney should really give EA's Playfish and the still-not-yet-purchased Zynga some tough competition in the booming social games space. Titles like Social City, Sorority Life, Market Street and Bola, have enabled Playdom to reach an estimated 42 million active players each month.

Disney of course benefits by strengthening "its already-robust digital gaming portfolio," acquiring "a first-rate management team" and having the ability to "provide consumers new ways to interact with the company on popular social networks like Facebook and MySpace." Playdom now has 15 development studios and the company will remain headquartered in Mountain View, California. Pleasants will become an Executive Vice President of the Disney Interactive Media Group (DIMG) and General Manager of Playdom, reporting to DIMG President Steve Wadsworth.

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

“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,” said Playdom Chief Executive Officer John Pleasants. “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.”