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THE WALT DISNEY COMPANY ACQUIRES CLUB PENGUIN
Club Penguin founders to join the Walt Disney Internet Group
KELOWNA, BRITISH COLUMBIA, CANADA and BURBANK, Calif. – Aug 1, 2007 – As a part of its strategy for long-term growth through applying new technologies
to the creation and global distribution of high-quality family entertainment,
The Walt Disney Company (NYSE: DIS) has acquired Club Penguin, one of the fastest-growing
online virtual worlds for kids. The addition of Club Penguin to Disney’s
existing online assets will further strengthen the company’s objective
of establishing clear leadership in online virtual worlds for kids and families.
Since its launch in October 2005, award-winning Club Penguin has grown to
more than 700,000 current paid subscribers, and has achieved this remarkable
subscriber and user growth with very limited marketing efforts, relying mostly
on strong product and word of mouth awareness among kids. The site has more
than 12 million activated users, primarily in the U.S. and Canada, and is one
of the fastest growing online destinations for kids ages 6-14. The site features
animated penguin avatars that inhabit a snow-covered virtual world, converse
with other users, participate in group activities and create and furnish a
virtual home with currency earned inside the game.
“This acquisition is consistent with our strategy of leveraging technology
to create and deliver high-quality entertainment around the world and our commitment
to investing our capital to generate growth and value for our shareholders,” said
Bob Iger, Disney president and CEO. “Club Penguin embodies principles
that are of the utmost importance to Disney – providing high-quality
family entertainment and fostering parental trust. The founders have woven
together new technologies and creativity to build an incredibly compelling,
immersive entertainment experience for kids and families. Just as with our
own Disney.com, kids love Club Penguin and parents trust it; and we are proud
to welcome the creative team of Club Penguin into Disney. Combining the creativity
and knowledge of the Club Penguin team with our existing Disney Online assets
will help us further achieve our objective of establishing clear leadership
in the kids and families online virtual worlds space around the globe.”
“We have been actively searching for an organization that not only
shares our values and concerns for children, but also has the ability and desire
to help us bring Club Penguin to more children throughout the world. We’ve
found that partner in Disney,” said Lane Merrifield, one of Club Penguin’s
three founders. “As a former employee of Disneyland, I’ve always
had a great respect for what Walt created. When he first envisioned Disneyland,
he wanted to create a safe place that he and his daughters could enjoy. In
the process of creating Club Penguin, we shared that passion and often pulled
from Walt’s vision in the hope of creating a unique place online that
we would be comfortable letting our own children visit.”
Club Penguin, which will be called Disney’s Club Penguin, will retain
its URL (www.clubpenguin.com) and will
remain based in Kelowna, British Columbia, Canada. The company’s three
founders, Lane Merrifield, Dave Krysko and Lance Priebe, will join Disney and
remain the senior management team of the unit. Merrifield, Club Penguin’s
chief executive officer, will become an executive vice president of The Walt
Disney Internet Group (WDIG), reporting to WDIG President Steve Wadsworth.
Disney plans no immediate changes to the operation or business model of Club
Penguin.
“What Lane, Dave and Lance have achieved in creating such a large
community around this incredibly engaging, immersive environment in so short
of a time is phenomenal,” Wadsworth said. “We welcome their unique
culture, and both we and they are excited about seeing what can come from combining
their innovations with Disney’s brand strength and entertainment assets,
global reach, and our No. 1 position with kids and families in Disney.com.
We expect to continue Club Penguin’s strong growth well into the future,
especially by targeting markets outside of North America and through promotion
on our Disney-branded platforms.”
For Disney, the addition of Club Penguin is but the latest in a year of successes
in the Disney-branded online space. In early 2007, the company debuted the
new Disney.com, which remains the No. 1 site for kids and families. Using the
latest broadband-based technologies, the new Disney.com offers all things Disney
in one place on the Web, including videos on demand, games (including virtual
world MMOGs) as well as aspects of community, social networking, user-generated
content and creation of individual media lists, all in an environment designed
for kids with safety in mind.
Disney was one of the first companies to enter the virtual world space for
kids and families with the introduction of Disney’s ToontownOnline in
2003, the first massively multiplayer online game for kids and families. Later
this year, Disney will launch Pirates of the Caribbean Online, and
in 2008 will debut Disney Fairies, a virtual world aimed at girls
and based on Tinker Bell and her friends, which builds upon the popular Disneyfairies.com
site that launched in January 2007. DisneyFairies.com allows users to create,
outfit and name fairy avatars, as well as obtain and decorate a home for the
avatar, all in the world of Tinker Bell. To date, nearly 2.5 million Fairies
have been created on the site.
Strategically, Disney plans to develop a Disney-branded connected entertainment
network that allows users to access Disney-branded content, including virtual
worlds and Disney.com games and videos, any time and anywhere, as well as communicate
with each other across platforms, through a Web-based hub connected with PCs
and mobile devices such as cell phones and game platforms.
Until now, Club Penguin’s user base has been primarily located in the
United States, United Kingdom and Canada. By leveraging Walt Disney Internet
Group resources and experience, Club Penguin plans to create international
versions in Europe and Asia, as well as in the Americas.
WDIG and Club Penguin management will be exploring ways to integrate Club
Penguin into the Disney-connected entertainment network over time.
Club Penguin welcomes users of all ages, but is designed primarily for kids
ages 6 to 14. Club Penguin, like Disney’s other virtual worlds, features
a velvet rope model of usage. While users can play for free for an unlimited
time and enjoy a portion of the virtual world’s geography and functionality,
a user must subscribe in order to achieve status rank in the game, take advantage
of certain features or make purchases of in-game goods such as furnishings
for an avatar’s igloo home. A subscription is $5.95 a month or $57.95
a year . In addition to subscriptions, Club Penguin also generates revenue
from sales of merchandise online, such as plush versions of penguins’ pet
puffles, t-shirts and gift cards.
About The Walt Disney Company
The Walt Disney Company (NYSE:DIS), together with its subsidiaries and affiliates,
is a leading diversified international family entertainment and media enterprise
with four business segments: media networks, parks and resorts, studio entertainment
and consumer products. Disney is a Dow 30 company, had annual revenues of over
$34 billion in its most recent fiscal year, and a market capitalization of about
$65 billion as of July 31, 2007.
About Walt Disney Internet Group
The Walt Disney Internet Group (WDIG) offers a compelling mix of interactive
entertainment and information content and services for Internet and mobile
devices for audiences around the world. WDIG is both a developer of unique
new media experiences specifically designed for Internet and mobile media and
a developer of new platforms for distributing content selected from broad,
existing entertainment divisions and libraries of The Walt Disney Company.
Its paramount mission is to provide a safe, secure environment for consumers
to experience the Disney brand anytime and anywhere as they inform and entertain
themselves, look to join communities with other Disney fans, or shop for products
and services. WDIG integrates the unmatched breadth of content with a best-practices
approach to Internet and mobile technology and drives multiple revenue streams
from premium content offerings, advertising and ecommerce. WDIG’s suite
of properties includes Disney.com, Family.com, Movies.com and mDisney mobile
entertainment. Additionally, WDIG’s Disney Mobile phone service is the
first comprehensive mobile phone service with applications specifically developed
to meet the needs of kids and parents. WDIG also provides strategic leadership,
business execution support and a world-class technology platform for all the
Walt Disney Company Internet properties, including category leaders ESPN.com,
ABC.com and ABCNEWS.com. WDIG, which is headquartered in North Hollywood, Calif.,
has operations in Asia-Pacific, Europe and the Americas.
Forward-Looking Statements
Certain statements in this press release may constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform
Act of 1995. These statements are made on the basis of the views and assumptions
of the management of the Company regarding future events and business performance
as of the time the statements are made and we do not undertake any obligation
to update these statements. Actual results may differ materially from those expressed
or implied. Such differences may result from actions taken by the Company, including
restructuring or strategic initiatives (including capital investments or asset
acquisitions or dispositions), as well as from developments beyond the Company’s'
control, including: international, political or military developments; technological
developments; and changes in domestic and global economic conditions, competitive
conditions and consumer preferences. Such developments may affect assumptions
regarding the operations of the business of the Company including, among other
things, demand for products and performance of some or all company businesses
either directly or through their impact on those who distribute our products.
Additional factors that may affect results are set forth in the Annual Report
on Form 10-K of The Walt Disney Company for the year ended September 30, 2006
and in subsequent reports on Form 10-Q under the heading "Item 1A—Risk
Factors."
CONTACTS:
For News Media
Zenia Mucha
818.560.5300
John W. Spelich
818.623.3266
For Investor Relations Relations
Lowell Singer
818.560.6601
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