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February 22, 2007

Club Penguin - A Very Successful Habbo Hotel Look Alike?

posted by MR WAVETHEORY at 2/22/2007 12:00:00 AM
I have to say that when I read about Club Penguin at Newsweek and NPR, and later checked out the site, it looked surprisingly similar to HabboHotel in concept and execution. In fact, it looked like they have achieved the success that HabboHotel has achieved in Europe. In case you are not up to speed (and I surely wasn't until I read about them), HabboHotel and Club Penguin are sites where kids get avatars and chat with friends. In Habbo, you can get a cool character and walk around and talk to friends in HabboHotel. You get your own Hotel room and you can decorate for a fee. In Club Penguin, you get a penguin character and you flop around in your igloo - which you decorate for a monthly fee. I think these are great concepts because they turn the virtual world into a space where you can hang out.

These are interesting venture plays because these casual game companies push the envelope for larger console game developers like EA in the opposite direction. Sites like Club Penguin are simple to navigate and have neat but not all that sophisticated graphics. Imagine that in an EA game! In that sense, these companies are expanding the market for games.

Are there exits for companies like Club Penguin? Probably. Maybe Club Penguin will turn out like Neopets and get acquired for a princely sum ... like $160 million. Are there pitfalls to acquiring these companies? Absolutely. My guess is Neopets peaked in 2005 which is when they got bought by Viacom. The traffic on Neopets has been flat to declining based on a quick eyeball of some traffic charts, so the management team was smart to sell.

Games are a fad, fashion, and hit driven business. No doubt about it! All this just means fortunes can be made and lost much faster!

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Blogger Nabeel said...

Actually MMOGs such as Habbo and Club Penguin do not exhibit traits that are similar to the fashion/hits nature of video games.

These are primarily social networks, that use game mechanics to make them more addictive/enjoyable, they are more like a service than a product. Eve Online is a four year old "game" and is still growing quite rapidly, this is because of the social network effect of people joining the game -- something that video games do not have.

Neopets went out of favor because it stagnated after being purchased -- it's the same as if LinkedIn's set of features hadn't changed in the last four years.

1:46 PM  
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8:00 PM  

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