Paying for Club Penguin…
It’s been rumored for a while that Montgomery Securities is representing virtual world Club Penguin in a sale transaction. It looks like the company is locked in talks, possibly exclusive, with Sony, and the price is “at least half a billion” says a source close to the deal.
We mentioned Club Penguin last month when a competitor launched from IAC called Zwinktopia. The company is killing it – projected revenues of $65 million in 2007 with $35 million in profit. Having nearly 50% bottom line margin is exceptional. The company has around 500,000 active users.
A stumbling block in the negotiations appears to be a disagreement over charitable contributions. Club Penguin donates a significant portion of profits to charity and wants this policy to continue post-acquisition. Sony reportedly isn’t hot on the idea.
Club penguin is a virtual world for young kids. Sony may see significant synergies by tying it into their Playstation platform. Other bidders that were in talks until very recently reportedly include AOL, Disney and Viacom.
This is good news for Club Penguin’s virtual world competitors as well – which broadly includes Second Life, Runescape, Gaia, Habbo Hotel, Cyworld, Neopets, Club Penguin, Webkinz and others.
Okay… first of all, I’m not sure how Second Life, Runescape, Gaia, Cyworld, and Habbo Hotel are competitors for Club Penguin– as NONE of those sites allow U13, and Club Penguin is FOR U13. I get that they’re all “Virtual Worlds” but the mere fact that their ages are different COMPLETELY pulls them from direct competition– different rules, different standards, different audience. Its like the different between The Sopranos on HBO and Spongebob Squarepants on Nickelodeon.
Second: Why the heck would Sony want to buy it? I don’t really agree with the “Playstation” theory. Seems a bit forced. Unless Sony wants to explore a new business model of Safe, Lock-Box Communities online for kids. Besides… Sony games– they seem a bit, um, older? I’ve never really thought of them as big supporters of the 8 – 12 year old set (Ninetendo seems a better fit, ya know?).
3rd– Club Penguin just got HUGE brownie points for their charitable contributions AND for stickin’ to their guns and wanting the buyers to continue such an honorable venture. Makes me almost forgive the fact they won’t let mac users on 😉
4th– I would be a bit more favorable on the TEEN site Zwinktopia if they’d do just a WEE BIT better of a job keeping the U13 tater tots out. It’s never nice to dangle a sugar-coated carrot in front of an eager, but ankle-chained donkey. P.s. Word on the street is that they’re having a teen prom. (Thanks for that heads-up Ypulse!)
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