Big money in virtual worlds

Club Penguin

Club Penguin – cuddly 3D virtual playground for 6 to 14 year olds has just been bought by Disney for $350m plus a further $350m earn out.

According to Techcrunch the company is flying with expected revenues of $65m this year and profits of $35m.  Awesome margins.

Club Penguin apparently gives a substantial portion of its profits to charity – a factor that was a stumbling block for some acquirers and explains why the profit multiple (10x including earnout) isn’t that exciting.  There was a lot of interest in this asset – including from the likes of AOL and Sony.

I think there will be many others after this.  I’m hearing Second Life will do revenues around the $100m mark this year, and Habbo did €51m last year – putting them in the same ball park as Club Penguin from a valuation perspective.
To my mind all of this activity is very much phase one for virtual worlds.  None of the most successful worlds are mainstream in the big markets of US and Europe, so that is all to play for.  And after that there is the 3D internet story which is an order of magnitude bigger.  More of that another time.

  • Hey Nic, shouldn’t you have blogged this before Fred Destin:

    We are delighted to announce that Draper Fisher Jurvetson (DFJ) has acquired a strategic stake in Esprit Capital Partners. Esprit has rebranded as DFJ Esprit and is now DFJ’s exclusive partner in Europe.

    DFJ Esprit is the latest addition to the DFJ Network of venture capital partnerships that stretches around the globe. The DFJ Network includes 120 investment professionals in 30 cities around the world.

    The Partners of DFJ Esprit are excited about the potential that this alliance offers and look forward to continuing to work with our portfolio companies, co-investors and friends across Europe to build truly global companies.

  • Hey Nic, shouldn’t you have blogged this before Fred Destin:

    We are delighted to announce that Draper Fisher Jurvetson (DFJ) has acquired a strategic stake in Esprit Capital Partners. Esprit has rebranded as DFJ Esprit and is now DFJ’s exclusive partner in Europe.

    DFJ Esprit is the latest addition to the DFJ Network of venture capital partnerships that stretches around the globe. The DFJ Network includes 120 investment professionals in 30 cities around the world.

    The Partners of DFJ Esprit are excited about the potential that this alliance offers and look forward to continuing to work with our portfolio companies, co-investors and friends across Europe to build truly global companies.

  • I HAVE READ MANY STORIES AND ARTICLES ABOUT VIRTUAL WORLDS AND MALLS. CHECK OUT http://WWW.THEMALL.TV IT BEATS ANYTHING ON THE INTERNET, A PERFECT BUSINESS MODEL AND THE DIRECTOR HAS FUNDED IT ALL HIMSELF. SPEAKING TO THEM RECENTLY AT ADTECH LONDON THE DIRECTOR MR ISHMAEL BAHADUR WAS OPTIMISTIC ABOUT BRINGING ON BOARD 5000 ADVERTISERS IN THE UK WITH A PLAN OPEN A FURTHER 19 MALLS GLOBALLY CAPTURING OVER 100 MILLION REGISTRANTS.

    THEIR MALL OFFERS PHOTO QUALITY GRAPHICS, FULL INTERACTION, SOCIAL NETWORKING AND A NEW COMMUNITY ONLINE.

    UNLIKE 2ND LIFE ITS EASY TO USE AND APPEALING TO ALL AGES… YES A GRANNY CAN USE.

    THEIR BUSINESS MODEL IS SIMPLE AND THEY ARE TALIKING OF A MULTI BILLION POUND CONCEPT THAT WORKS… CHECK THEM OUT.

  • I HAVE READ MANY STORIES AND ARTICLES ABOUT VIRTUAL WORLDS AND MALLS. CHECK OUT http://WWW.THEMALL.TV IT BEATS ANYTHING ON THE INTERNET, A PERFECT BUSINESS MODEL AND THE DIRECTOR HAS FUNDED IT ALL HIMSELF. SPEAKING TO THEM RECENTLY AT ADTECH LONDON THE DIRECTOR MR ISHMAEL BAHADUR WAS OPTIMISTIC ABOUT BRINGING ON BOARD 5000 ADVERTISERS IN THE UK WITH A PLAN OPEN A FURTHER 19 MALLS GLOBALLY CAPTURING OVER 100 MILLION REGISTRANTS.

    THEIR MALL OFFERS PHOTO QUALITY GRAPHICS, FULL INTERACTION, SOCIAL NETWORKING AND A NEW COMMUNITY ONLINE.

    UNLIKE 2ND LIFE ITS EASY TO USE AND APPEALING TO ALL AGES… YES A GRANNY CAN USE.

    THEIR BUSINESS MODEL IS SIMPLE AND THEY ARE TALIKING OF A MULTI BILLION POUND CONCEPT THAT WORKS… CHECK THEM OUT.

  • adam

    there are many virtual malls on the internet but all have poor qualty visuals and are not user frendly. i have seen http://www.themall.tv website, the quality of thr gui is excellent but it still remains to be seen if they can pull it off.

  • there are many virtual malls on the internet but all have poor qualty visuals and are not user frendly. i have seen http://www.themall.tv website, the quality of thr gui is excellent but it still remains to be seen if they can pull it off.