Club Penguin Misses Goal - Shocker? — The Education Business Blog

Kid’s virtual world Club Penguin has fallen short of the high-flying projections made when Disney purchased them 3 years ago.

Read this New York Times piece from today for the details.

I can’t say I’m surprised by the result. CP always seemed thin on the engagement side – dress your penguin and run around and “speak” pre-approved phrases. More dot.com than user driven media. The tip off should have been when old model Disney snapped them up – the model made sense to them.

The article went on to catalog the woes of most of the kiddy virtual worlds that were getting so much buzz just a couple of years ago. Smells like 2001 all over again.

Meanwhile our old friends Whyville, Farmville and their kin continue to slowly build a solid base of engaged users by letting the kids largely run the show and by providing open and free places for people to learn.

Learning is the killer app – not being busy.

We shouldn’t write them off – there are smart people running the show over there and they have time to adapt and learn. The question now is whether Disney will have the patience to see them forward.

Doug Stein says:

May 13, 2010 at 1:24 pm

Good article – no shocker, but for different reasons. Structuring a deal like this keeps the exec team with skin in the game (otherwise they bolt quickly now that they’re rich). To be meaningful to the acquirer, the additional payout has to be tied to stretch goals, not “in the bag goals”. Depending on the nature of the goals and the size of the miss it’s too hard to tell if there is execution failure at CP, increased competition from other outlets for family spending (not just virtual worlds – but everything else in the discretionary for-the-kids budget), or a general downdraft in the market.

Two other comments on your observations:
1) The core of CP’s engagement model is more about head-to-head game competition that earns points for the bling. The simulated social networking is mostly a framing story to naturally invite other penguins to play. It’s scripted so that it doesn’t have to be monitored to keep it safe.

2) You raise a great point about properties that let kids run the show. It would be really interesting to see what Disney has done with another one of their acquisitions – Kerpoof – whose primary engagement model is the creation and sharing of artwork and animations. Did they do anything more than start slapping Disney branded characters?

Cheers,
Doug
P.S.: I have no relationship with Club Penguin, but my neighbors have 2 girls (2nd grade and Pre-K) who subscribe and have stayed with it happily for about 18 months. My observations about the engagement model are through their words and those of their parents.