Club Penguin deal works in Disney’s favor

Back in August of 2007 this whole econopalypse was still ahead of us. Disney had just decided to spend up to $700 million to buy Club Penguin, an online MMORPG for tweens and pre-tweens. They structured the deal so that half would be paid upfront, and half upon Club Penguin meeting certain goals. Enter the Great Recession and suddenly those goals were unreachable.

That’s not to say Disney didn’t try to meet them. Merchandise, Games, and marketing via Disney’s online, cable, and broadcast channels all helped the site reach year after year growth. Alas, the trick is still to get paying members contributing their $5.95 a month to get the full site access… and that’s where they fell short. International expansion efforts weren’t as successful as hoped either. Now Disney can keep that second half instead of paying it to the sites founders.

All hope is not lost. Club Penguin is still the largest ‘social network’ for kids and it’s an important part of Disney’s MMORPG lineup (Cars, Pirates, Pixie Hollow are the big three there). I know how Disney could make a lot of people happy… bring back Virtual Magic Kingdom. In the meantime, we should expect Disney to continue to be a big player in this arena.

(via the NY Times)

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