Disney Missing the $14B Games Business It Should Have

Despite recent challenges , mobile and social game-maker Zynga still is valued
around $14 billion . Its games like FarmVille and Mafia Wars remain the
recognizable face of the growing games industry on Facebook. The company has
more than 232 monthly users. This is undoubtedly frustrating to much larger
companies that would like to see their own mobile and social game businesses
yield the same rewards. Disney (NYSE: DIS ) is a perfect example. The company
has spent significant sums to secure a place in the social/mobile space during
the past 18 months. While it spent undisclosed sums on HTML 5
technology-developer Rocket Pack in May and iPhone game maker Tapulous in July
2010, it also made a buy with an actual number attached $563 million on
Facebook and mobile game studio Playdom that same month. Yet as of 2011s second
quarter, the $61 billion company with control of some of the worlds most
recognizable brands and characters has just 3.3 million users on Facebook. Its
entire Disney Interactive segment brought in just $251 million in revenues
during that same quarter a segment that suffered an $86 million operating loss
(its second in a row) driven by the inclusion of Playdom. Shouldnt a powerhouse
like Disney at least be able to match some young blood like Zynga? Well, now
that Playdom is fully incorporated into Disney Interactives operations Playdom
and Tapulous are now one studio called Disney Mobile it should have a greater
opportunity to bring in some of that Zynga-like revenue. A Monday report at All
Things Digital said Playdom alone has 12 titles ready to release on Facebook
during the next year, and these games will use Disneys oh-so-lucrative brands.
Also, Playdom has 3 million daily users for its recently released Facebook game
Gardens of Time alone , so Disneys audience already is multiplying on the social
network to a degree that will put it on par with Zynga, Electronic Arts (NASDAQ:
ERTS ) and other leaders in the space. So while the spending on Playdom
certainly set Disney back in Q2, CEO Bob Iger expects Disney Interactive to be
back in the black by 2013.