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

[MilenCent]

Actually, and please understand it pains me greatly to say this, but I know at least three grown adults who play NeoPets.

One of 'em... is male.

Now, if you'll excuse me, me and my newly-ascended Pastamancer are off to play a REAL webgame.

Re:jsut a question

[Metaphorically]

My daughter got me into it... They were talking about expanding at E3 this year, too. They had a PS2 game (that seems to have nothing to do with the web site other than the characters) and they have something coming out so you can play on cell phones. To be honest, I actually think they have a chance to break in to the mobile market, depending on how clever they are. I don't know how the MTV acquisition will affect that.

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.