“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.”
This is profoundly good for Disney. Creative destruction in industry is determined by difference between the companies who are willing to be bold so as to innovate, and those who aren’t. Disney has proven itself a shrewd behemoth, with the ability to adapt itself to evolving circumstances over decades. The innovator’s dilemma – that is, the inability to risk low-profits for the sake of potentially bigger future profits and better product, due to shareholder requirements – can be avoided with the right timing.
Social gaming companies like Playdom (Zynga, RockYou, Slide, etc.) have begun to prove themselves at the grown-ups table (Zynga does anywhere from $500M to $800M), despite plenty of skepticism across the board, but are still young enough (no more than a half decade, in their current iteration) to be bargain acquisition targets for the major players. Well played, Mr. Iger.
PS – Iger also oversaw the acquisitions of Pixar and Marvel, both of which I thought were excellent pickups for the company. And yes, I still think they’re evil.
Musings 