Magic Playdom

Published as part of our sister-site GamesIndustry.biz's widely-read weekly newsletter, the GamesIndustry.biz Editorial, is a weekly dissection of an issue weighing on the minds of the people at the top of the games business. It appears on Eurogamer after it goes out to GI.biz newsletter subscribers.

If anyone harboured doubts about how important social gaming is becoming - and how quickly it is growing into that importance - then this week's acquisition of Playdom by Disney should put an end to them. The media giant is paying out around three quarters of a billion dollars for Playdom - a figure made only more astonishing by the fact that the company is by no means the largest provider of games on Facebook.

Playdom is no minnow, of course, but then again, it's hard to work out how we should be estimating company sizes or even valuations in this brave new world. I'd be stunned if someone paid the best part of a billion dollars for a traditional game publisher whose games I'd never heard of or played, yet that's exactly the status of Playdom. Like most people who follow social gaming, I was aware of the company itself, but I'd never actually encountered any of the games it makes, eclipsed as they are by the success of titles from rival firms such as Zynga and Playfish.

That probably doesn't bother the company's new owners very much, however. Disney's acquisition of Playdom is unlikely to have had much to do with a particular desire to add the firm's IPs, such as Mobsters and Sorority Life, to its own library. Instead, this expensive investment was motivated by two key factors.

The first driver for the acquisition is that Disney is one of the largest holders of IP in the world, and much of its focus lies in finding new ways to monetise those IPs. Social gaming is a rapidly growing sector, both in terms of audience figures and in terms of revenues, and as such it's inevitable that a company such as Disney would view it as a potential new outlet for its IPs.

Equally, however, it's obvious that the skillset involved in creating a successful range of social games is not trivial. The landscape of Facebook is littered with the corpses of underperforming social games, each one laid low by a combination of problems ranging from design issues through to technical mismanagement. If valuable Disney IPs are on the line, building a new team and going through the inevitable growing pains and mistakes isn't really an option - buying in talent was the firm's only choice.

If that explains Disney's decision to buy a social gaming firm, however, it's the second factor which explains why the company was willing to spend such an enormous amount of money on the acquisition. That factor, bluntly, is panic.

Disney is a company in a somewhat odd position. It owns, as I mentioned, one of the largest and most enviable arrays of IP on the planet, and has a knack for bringing existing IPs over even the most unlikely of medium transitions successfully - witness, for instance, the transformation of the Pirates of the Caribbean fairground ride into a blockbuster movie franchise.

In videogames, however, Disney is a relatively minor player. It's not for want of trying - Disney has always given the impression of a company that's keen to do well in the videogame space, and to its credit, has taken a much closer interest in the development of games based on its properties than most movie studios.

It remains, however, a movie studio at heart - despite some solid attempts, it has never really seemed very committed to the idea of generating original IP in videogames, or of factoring games into the kind of cross-medium leaps represented by Pirates of the Caribbean. There have been a few daring attempts to do something playful and innovative with Disney IPs - Kingdom Hearts is a great example, and Epic Mickey is shaping up to be another - but for the most part, the firm's videogames output has been an exercise in playing it safe, taking few risks, and as such enjoying solid sales but an underwhelming position in the market as a whole.