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Sony In Advanced Talks To Buy Kids Social Gaming Service ClubPenguin

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Sony is in advanced talks to buy the two-year-old kids focused social gaming ( ClubPenguin, has learned. We have confirmed the talks from senior insiders, but have not been able to confirm the potential price. The talks are exclusive, but still ongoing and could break down, and I’m sure they could have other competitive bid from others.

ClubPenguin is a massive multiplayer online game for children developed by New Horizon Interactive, a software firm based in Kelowna, BC in Canada. It was launched in Oct 2005, and has grown to about 4.5 million visitors in March. Using cartoon penguin avatars, players can converse, play minigames, and participate in other activities with one another in a snow-covered virtual world. The service is subscription-based (about $6 a month), and also has additional e-commerce/shop revenues. A detailed description of the company is here on Wikipedia.

From what we know, the site/service does not have any investment money in it yet. As to what fit it has with Sony, could be a good distribution vehicle for some of Sony Pictures’ kids-focused shows. Or, it might be that it becomes a part of Sony Computer Entertainment America, the gaming unit, which runs the Playstation franchise, or more likely, the Sony Online Entertainment division, which runs Everquest and others. Both Disney and Viacom (though Nickelodeon) have plays n this kids gaming/avatar space: Disney recently relaunched an existing virtual-reality site under a new name: Disney Xtreme Digital (DXD), and Nickelodeon launched its entry,, at the end of January. Nick also bought Neopets in 2005 for about $160 million.

Staci adds: Rafat held back on the numbers when he broke this earlier today but we have some additional information that puts the price in the $450 million range. Some people were intent on floating a $500 million number but our sources peg the price at around $450 million, which would be a 7.5 multiple based on this year’s projected revenue of about $60 million. The self-funded company is already profitable and, according to our information, is operating at about 50 percent margin — ie $30 million in profit this year.

So what could hold the deal back at this point? According to one source, Sony is trying to get a handle on churn. We’ve also been told the founders are interested in committing some profits to charity and Sony wants to be sure its margins are protected. Why Sony? The subscription base is appealing as are the prospects of fitting it in with Playstation and possibly PSP. No obvious ad potential.

34 Responses to “Sony In Advanced Talks To Buy Kids Social Gaming Service ClubPenguin”

  1. Joe Cool 567

    Sorry for double posting but after reading other posts i thought i should mention this…..

    Some people are saying Sony just wants lots of money and all that… Well, it's not like it's any different then the Club Penguin now! They want money too… Except, they try to make it as fun as possible for more members. If Sony buys it, then they will do the same making it as fun as possible.

  2. Joe Cool 567

    I don't mind much who owns it, as long as it's pretty much the same Club Penguin. All they want to do is buy it to make money (members). They wouldn't make it different, because penguins might not like it and then there would be less members, which is less money. Who knows, it might even get better ; )
    Why should we be annoyed at Sony for buying, if they could even make it cooler and funner with their cool ideas? If Sony buys Club Penguin, are you going to quit just because they did buy it? Because thats a little rediculous…

    Ps. Sony is better all the way!!! ^_^

    they only way i would change my mind is if they put the hearts and skulls back!
    well… Atleast i have a youtube!

  4. HI. I am a Normal penguin named Pop Lol (yes strange name but i dont care)I vist club penguin EVERY morning and Sometimes late at night. I am 11 years old an i have a BLAST on it!
    My freind told me that club sony will be all ULTAMINT SAFE CHAT!
    i was mortified when i heard this. the best thing about club penguin it that u can say what u want! (not like cusing and stuff) If sony was to make is SAFE CHAT …… I will never go on computer EVER EVER EVER AGAIN!

  5. Howdy!
    As it turns out, SONY isn't buying Club Penguin.
    Waddle World was a fan game, so its not like their
    switching to it. Club Penguin lives on!!!

    P.S. Nintendo is way better than SONY. I just want a portable gaming
    device for a decent price. Not some 500$ suped up ultra slim
    internet connected video playing cd burner that plays games that are also 45$.
    Although I was pretty happy with sega genisis when I was 6….

    ~~Lil’ Alex (Cppd Officer)
    Visit today!

  6. Johnny english rox

    I play cp and i hope sony doesnt change it alot. I THINK SONY WILL DeSTROY CP AND MAKE A DIFFERENT GAME!!!! i HOPE HE DOESNT

  7. Club Penguin fan

    It means CP will have ads for sony everywhere but they will still charge membership because Sony want money money money. They don't even want to donate a small portion to charity the way CP does now, yet they will pay half a billion dollars to own it. They would make so much money if they used the idea for games etc. They are greedy and have no morals. I know i won't be playing CP anymore if it is sold, it just won't be the same.

  8. slugbird

    Everyone! Do you understand what they mean buy "buying clubpenguin" they mean they are gonna buy clubpenguin and
    delete it! they just want the rights to take the site and delete it!
    Give me my money now and dont say another word to me sony cuz im on the virge of swearing.! give me my 60 dollars back jerks!

  9. Rose101365

    I hope that if sony buys it that they will make club penguin a whole lot better. Otherwise I am never useing club penguin again!
    Ya hear the ya no good sony people? Didn't ur mama ever teach ya not to take something that isn't yours?

    With no regards,

  10. Ok, My name is mike, and i have a club penguin account. Why is Sony trying to buy everything that we like, as kids! Sony has enough money to waste so why should they get mor?
    But there is a good thing!, If Club Penguin staff sells it for like 500,000 dollars, then Club Penguin staff can make an even better game with the more money tat the receive from sony! So Club penguin staff is setting sony up with a plan! CLUB PENGUIN WILL WINN! ! ! ! !

    Contact me at [email protected]
    My site:

    Thanks, Mikeambrose3

  11. Hello. I have a site just like Yaypuffles. I really do care if they buy it because I have a PSP and I'm hoping once they but it that they will connect it to the PSP so I can play it everywhere. I am really hoping they buy it, and make some big changes because CP (Club Penguin) has been a little boring sometimes.

  12. i am a paid member i will never quit club penguin.the only way your going to get me to like sony is if member prices go down.


  13. Howdy!
    I am also a member of club penguin, named Cppd Officer.
    Well, I emailed CP support and they said
    they had no itention of selling their small-town big-money business.
    If they ever did sell it, SONY would have to sign a contract stating that
    they would give a large portion of the profits to charity.
    Thats what ClubPenguin is. A site that gives to charity, and fun to all
    kids of all race, color, sex, age, etc. But seriously, SONY wouldn't
    but it just because they have a lot of money. I know nintendo wouldn't
    buy it after all the money they spent advertising the Wii and Gameboy Micro.
    Oh well. We'll just have to wait 'n' see. :)

    ~~Lil' Alex (Cppd Officer)
    Visit today!

  14. hey. I am a Club Penguin player, and I don't care if sony buys it, as long as they don't make any huge changes to it. I have a Club Penguin tip/rumor/secret revealing site of my own ( and i don't want to have to re-do the whole site because sony makes too many changes to CP.
    I enjoy playing Club Penguin, but I do see some room for improvement, and if Sony can make those changes, then i'm all for it. Sony is great at game-making, so i don't see how they can mess up, unless they try to change it too much, too quickly.

  15. I'm just a little dubious about a site that is focused on two-year-old kids – a difficult market to monetise… :-)

    "Sony is in advanced talks to buy the two-year-old kids focused social gaming…"