Hollywood Pounces on Social Games

Hollywood Pounces on Social Games

Disney’s purchase of leading social network games maker Playdom (second only to Zynga in the valuation and Facebook game market) may seem like a strange buy at first blush. But the acquisition makes perfect sense from a business perspective, as the film and TV giant looks to leverage its award-winning stable of cartoon and live action properties as well as beloved childhood characters into the social gaming realm. Even as the company moves to sell off Hollywood film subsidiary Miramax, Disney – like many other media giants – is determined to transition to the digital world, where interactive forms of entertainment (e.g. video games) and mobile, on-demand downloads reign supreme – not movies and other passive forms of pop culture.

As our friends at Internet Evolution kindly point out in Why Disney Nabbed Playdom, every mass media conglomerate worth its weight in box office sales is waking up to the truth: People want to consume media in personalized ways, when they want it, and in interactive fashion. Social games not only enjoy an advantage because they’re easy to pick up and put down, don’t require a massive time commitment, and let kids and adults alike actively engage with favorite characters and stories on their own terms. They’re also free to play, accessible from nearly anywhere, and let you only purchase as much content as you’d like, versus, say, having to buy an entire television season on DVD or full-length Blu-ray movie. (Not to mention don’t require a high-speed broadband connection, pricey HDTV/3DTV equipment or a spare 30 – 120 minutes on average to enjoy.)

Plus, as we point out in the article, there’s also a major bonus for publishers. Even as TV and film content (like other forms of traditional media) seem to steadily lessen in value, and are typically sold for a one-time fee (e.g. the price of purchase or rental), social games – which cost zero to get into up-front, broadening their potential user base massively – offer many ways to monetize the same property. Some fans will inevitably spend more on them than if they purchased boxed products; so-called “super users” many times the cost of a single disc, even though purchases will come in the form of many bite-sized sales of virtual goods, or microtransactions, versus a one-time lump sum.

Furthermore, the audience for social games is about as mainstream and widespread as you can get, while power is quickly beginning to consolidate in the hands of a few social games publishers with the most well-known properties and deep marketing pockets. Knowing this, it makes perfect sense for Disney, whose storybook characters and fantasy worlds are instantly familiar to average, everyday viewers – and who is already deeply invested in traditional video games and online games/MMOs – to want to get in on the action. Given how different social game design is to classic PC and console game development though, the easiest path to entry into the field is the same that Electronic Arts took when it bought Playdom: Acqusition. And so you have it: Disney and Playdom hopping into bed with one anothers, and consummating the marriage to the tune of as much as $763 million.

About Scott Steinberg
Scott Steinberg is CEO of strategic consulting and product testing firm TechSavvy Global, and a noted keynote speaker and business expert. Hailed as a top tech expert and parenting guru by critics from USA Today to NPR, he’s also an on-air analyst for ABC, CBS and CNN.

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