Print
Email
Print Edition Stories
Wednesday, July 28, 2010
Bessemer’s Cowan on Disney and Playdom
MHT's Galen Moore: Nerds and geeks flock to Boston conventions
Last month, Wellesley-based Bessemer Venture Partners led a $33 million investment in the social game developer Playdom Inc. Today, that deal is looking pretty good. The Walt Disney Co. (NYSE: DIS) announced Tuesday afternoon it will buy Playdom for $563.2 million, adding $200 million in earn-out agreements, if the acquired company hits milestones. Playdom took in at least $76 million in venture financing, including Bessemer’s investment.
West-Coast-based General Partner David Cowan led the deal for Bessemer. He talked this morning with Mass High Tech staff writer Galen Moore.
MHT: What’s the value here to Disney?
David Cowan: Playdom itself is a financially interesting asset to an owner. But I believe Disney bought it because they see social gaming as a unique category that is probably going to go away, and instead what we’ll see is the proliferation of social features in all games. What they’re buying in Playdom is a world-class team and studio that can not only develop exciting new social games but also infuse Disney’s other properties with those kinds of features.
MHT: How important to the deal was Playdom’s position as a leader among social game publishers on Facebook?
DC: Facebook obviously plays a very important role in what people are doing online. Disney, like anyone else, needs to have a strategy for engaging users in the Facebook ecosystem.
MHT: You predicted social features will proliferate across other games. Will Facebook remain important if that happens?
DC: I think that people will play games in Facebook, and people will play games outside of Facebook. It’s pretty clear that inside of Facebook the games tend to be more casual, and outside of Facebook you tend to get more hard-line gamers playing. I expect that will continue to happen. But inside of those more hard-line games, or branded game experiences like you might find on other Disney properties, social features will become important. I expect that many of those games will use the Facebook Connect feature to incorporate the Facebook social graph in those games even if they’re not happening inside of Facebook.
MHT: Has the line between the casual gamer and the hard-line gamer started to blur?
DC: You’ve got people who play games because they want to play the game. I’m not just talking about online -- I mean in general. They will go to a tennis tournament or a chess tournament because they want to play the game. And then you have a lot of people who play games because it’s something fun to do with their friends. They want to hang out with their friends. There’s two different ways people play. That will continue. I think that really defines the line between hard-line and casual gamers.
MHT: Whither video-game consoles? Will social games eat their market share?
DC: It might work the other way: social games introduce a much broader user base to games that then can be sold and played on consoles. One thing that’s clear is that this whole social gaming phenomenon has expanded the pool of gamers in the world. That may be good for the console platforms.
MHT: Playdom priced up pretty quickly. Is there a bubble in social gaming and virtual goods?
DC: I think Disney got a bargain.
MHT: Does the market for virtual goods continue to grow?
DC: Absolutely. It comes down to micropayments. It’s easy to pick on someone’s virtual wardrobe in a game as being a potentially fleeting market -- but the demand for instant gratification with content on the web will only grow. At one of our own portfolio companies, Zoosk, we’re finding that we can extend the coin model into online dating. For people who don’t want to commit themselves to an online dating experience, they can use coins to meet just that one person whose profile they like.
Comments
If you are commenting using a Facebook account, your profile information may be displayed with your comment depending on your privacy settings. By leaving the 'Post to Facebook' box selected, your comment will be published to your Facebook profile in addition to the space below.
RSS Feeds
