It’s only a day after one of the big three social game developers, Playfish, announced a $400 million acquisition.
And today we’ve confirmed that another one, Playdom, has done its own massive deal: $43 million on a $260 million pre-money valuation. New Enterprise Associates, Rick Thompson, Lightspeed Venture Partners and Norwest Venture Partners invested in the round.
This is Playdom’s first outside round of funding.
Unlike Zynga and Playfish, who focus on Facebook, Playdom’s is the big player on MySpace. Their Mob Wars game has 14 million or so users there, and the company is likely pulling in $60 million or more in reveune. A couple of weeks ago we compared the big three social gaming companies as a prelude to our Scamville posts.
Playdom has 28 million monthly game users. 60% of traffic is from MySpace v. 40% from Facebook. They have twelve MySpace apps and 6 Facebook Apps.
Playdom is enemy no. 1 to Zynga, and has been accused by Zynga of stealing employees and the company’s intellectual property. Of course, no one’s hands are clean in this business.
70% of Playdom’s revenue comes from direct payments, the company says, 10% is advertising and 20% is offers. For offers, they work with usual suspects. But they have banned the spammier stuff, like mobile subscriptions.
One thing’s for sure. Zynga has more users of its games than Playfish and Playdom combined, and they tend to monetize far better, too (at least until last weekend). It’s not unreasonable to imply a $1 billion valuation to Zynga based on these comps. They’ll be looking to the public markets, though, for their exit.
Amazing what gets funding these days… “social gaming” – for real?
I bet you said they same thing about “search portals” in 92.
Congrats to Rick Thompson & Playdom1
Another big bet on scam, now also powered by Venture Capital firms.
if anything, these acquisitions should make it clear that someone has been spreading false accusations around
I’m still reeling from the fact that zynga accused them for IP theft.
correct me if I’m wrong, but Playdom’s mob game is Mobsters, not Mob Wars…
Correct. The fact-check department at Techcrunch missed that one.
I’d love to see the facts behind this statement: “they tend to monetize far better, too”
A little journalism, please.
With Zynga’s constant goofs the door is wide open for ethical monetization that is non-offer based. It seems like a no-brainer way to differentiate.
Gotta love Lightspeed. Boy do they need to put that capital from their huge to use.
should read “from their huge fund to use”.
spending $800 million is hard…they have to leave classic VC plays if they want to get a nice return. Making $2-$3 million dollar A rounds won’t do, they need to make very big investments, more like PE firm than VC.
Let’s say that on average they will own 20% of the companies in liquidation event (and that’s an “optimal case” scenario). If the fund needs to return a minimum of 3x in 7-10 years to be considered a good fund then that means almost $12 billion dollars in exits. Somehow, I just don’t see it…
“likely pulling in $60 million or more in reveune”
You misspelled “revenue.” Change it. Children use this blog as inspiration everywhere.
Umar Haque has some observations over on http://blogs.ha...nd_the_loo.html – I think he’s on to something when he predicts the future collapse of this whole area.
Playdom = Slide 2.0
Go Playdom Go!
at least i stopped getting pokes from all those dumb slide apps, hopefully they ran out of money
Can games be played on the Crunchpad?
These numbers are the valuation today, what happens when Facebook and MySpace or the DOJ finally crack down on these offers that they feel are scammy. I bet you see a huge decline in the numbers. I don’t know the percentages but it is well known that the scammy offers pay the best. Now it will be all about engaging users with something better and then keeping their attention.
For those more comfortable with more traditional businesses and their valuation, getting to this valuation would be a real challenge. In selling a more traditional business, valuation imputes a view of the future. A job for a clairvoyant in something like this.
anyone who plays these social games is dumb…these firms are merely there to pimp out users to marketers…i NEVER accept invites to these games on facebook or anywhere else…skrew u marketers