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As I posted last month, Club Penguin (one of the largest virtual worlds/MMOs around, focusing on kids) was in talks with Sony for acquisition at half a billion. According to paidContent, the deal is off. The Club Penguin folks were asking for upwards of half a billion, and Sony was offering $450 million or so. There were also some issues, apparently, with user churn and the insistence on the Club Penguin side that CP continue to donate a portion of profits to charity.
Club Penguin is a self-funded company as far as I know and while they’re doing about $30 million/year in profits or so, I can’t help but want to slap them and say 450 MILLION DOLLARS! If they’re that concerned with charity (and good for them if so!), take the money and give a hundred million to charity right now. We can all hope to have such dilemmas.
TechCrunch reports that Sony is in talks with Club Penguin to buy the latter for upwards of half a billion! The article says 500,000 active users but I know that’s low by at least a factor of two, $65 million in annual revenue and $35 million in annual profit. Those numbers make half a billion seem almost reasonable. That’d be a P/E ratio (price/earnings) of about 14, which is not outrageous at all for a growing company.
I know Jagex (creator of Runescape) has turned down offers exceeding $100 million, which I thought was a bit insane when I heard it (from the would-be buyer) and it is clear now that they were probably right to do so.