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Disney to acquire social-gaming company Playdom

The Mouse House, which already owns Club Penguin, announces plans to acquire this kingdom of play for $563.2 million, plus up to $200 million in performance-based earnouts.

Caroline McCarthy Former Staff writer, CNET News
Caroline McCarthy, a CNET News staff writer, is a downtown Manhattanite happily addicted to social-media tools and restaurant blogs. Her pre-CNET resume includes interning at an IT security firm and brewing cappuccinos.
Caroline McCarthy
2 min read
Playdom

Rumors that The Walt Disney Company would acquire social-gaming conglomerate Playdom have turned out to be true: Disney issued a statement on Tuesday, after the market closed, announcing its intent to acquire Playdom for $563.2 million, plus potential earnouts of up to $200 million.

"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," President and CEO Robert Iger said in the statement.

The Mountain View, Calif.-based Playdom is the manufacturer of popular social games such as Social City, Sorority Life, and Bola, which are built on top of social-networking platforms such as Facebook and MySpace. 42 million people play Playdom games per month, the release said.

Playdom rival Playfish was acquired by Electronic Arts late last year for about $300 million. Bigger competitor Zynga remains independent and has been rumored to be a candidate for eventually going public.

Disney also owns kiddie virtual world Club Penguin, for which it paid $350 million in 2007.

Social games have been one of the biggest sensations (if not the biggest) to grow out of Facebook's developer platform, as Playdom as well as its competitors have grown into powerful, multimillion-dollar businesses. Facebook chief operating officer Sheryl Sandberg sits on The Walt Disney Company's board of directors; CNET has asked Facebook for comment on whether her role at either company will be affected by the acquisition, given Facebook's general positioning of platform neutrality (however accurate) and the potential concerns from other gaming companies that this will make Playdom a particular "favorite."

This post was expanded at 2:06 p.m. PT.