NeoPets Sale Creates Ripples

The sale of Neopets to MTV earlier this week has created an interest in how the "tiny" site could go for so much. Terra Nova has a look at the stickyness of the site and its reality as a virtual space. Alice discusses the reasons behind the price tag, based on the outlook of a venture capitalist. From the Wonderland blog: "Here we have one of the most successful pieces of social software ever, so successful that it is being purchased by a major media company for $160-million, and the story is getting remarkably little play in social software circles. Why is the acquisition interesting? "

Comments

Re:jsut a question

[alvinrod]

From the article:

membership has grown to over 25 million from 90,000 in 2000. Either there are a lot of 13 year old girls out there or more people are using it than we think. For all I know, my coworker in the next cubicle could be a secret Neopet closet case.

I've never been to the site before, and now I have even less of a reason to go. Personally, I just don't trust/like a TV channel that calls itself M(usic)TV without playing any actual music. (Yes I'm aware that they have videos at 3 in the morning or some ungodly hour when I'm not awake.) Just my personal opinion though.

Re:jsut a question

[generic-man]

That's not why they changed their name.

It's the character designs

[Doctor Cat]

I suspect the majority of Neopets' revenue has probably come from the very successful licensing deals they've done. Along with stuffed animals and little electronic virtual pet toys, they've also got a very successful collectible trading card game from Wizards of the Coast, right alongside Magic the Gathering & Pokemon. The animal characters and the art style of them are what made it such a hot, fast growing property. A lot of the initial games were kinda slow, all HTML affairs, followed up by a bunch of simple flash & shockwave games, mostly single player. Their game economy loosely ties together all the activities & gives players some minimal interaction with each other. It's not as fast paced an interaction as World of Warcraft - but perhaps it's more mainstream in appeal, and it is an architecture that scales to support 25 million users a lot easier than games like WoW or Everquest.

I know on Furcadia, the most frequent thing players trade with each other for our virtual items is Neopoints (the "money" of Neopets). Maybe someday we'll be "hip" enough that a big corporation will try to buy us, and we can say no. I have to confess though, I've often considered contacting them about making a more interactive Neopets game based on our engine technology, which they could add to their site. We run a free game too, and average $10-$20 per regular user per year in sales of optional addon items, which is mostly profit (cost of goods on virtual items being what it is).

If Viacom can find a way to bring in that much revenue per user, through advertising sales or any other way, then the $160 million price tag to acquire 25 million customers starts to look pretty cheap. Certainly less dollars per customer acquired ($6.40) than AOL was burning through at it's fast-spending peak of its growth some years back.