Disney’s Virtual Worlds Era Ends with Closure of Club Penguin

In September of 2001, I was handed a CD labeled “Toontown Online.” I had no idea what it was, but when I got home, I was engrossed in my first “virtual world,” or as some say MMORPG (Massive Multiplayer Online Role Playing Game). The game was in beta mode until 2003. It’s look and feel was taken directly from Toontown. It was fun, but repetitive. Eventually, I tired of it and decided to spend my entertainment time someplace else where the story moved a bit faster and it didn’t feel like I was going through the same song-and-dance every day.

Pirates Online

Pirates Online

In 2005, Disney announced Pirates of the Caribbean Online, which launched in 2007. Unfortunately, my laptop was not powerful enough to enjoy. Then in 2008 came Pixie Hallow Online which was based around the Disney Fairies franchise. World of Cars also had a brief run from 2010 until 2012 when it was closed, with Disney citing the game’s poor quality. But, at the time, it is obvious that Disney felt virtual worlds would be the key to leaving their mark in the digital space and turning Disney Interactive into a profitable venture.

According to Mike Goslin, VP of Disney’s Virtual Reality Studio, Disney’s goal was to “have a large number of virtual worlds for a range of different audiences… sort of like a theme park.” If you needed even more proof that Disney was investing in Virtual Worlds, just look back to August 2007 where Disney announced during an earnings call that they were purchasing Club Penguin in a deal that could be worth $700 million dollars.

Enter the Penguin

There was a lot of excitement about Club Penguin. As soon as the deal was announced, Disney.com was invaded by Penguins. In 2009, the Penguins even had a limited time meet-and-greet at Disney’s Hollywood Studios.

The Disney merchandise machine began selling Penguins and Puffles (the penguins’ pets) and they even released a Nintendo DS game. Disney used their worldwide resources to launch Club Penguin in new territories and new languages. Club Penguin co-founder Lane Merrifield, who happened to be in Disneyland’s Lion King Celebration Parade in his youth, was put in charge of the complete portfolio on Disney’s Virtual Worlds.

Around this time, Club Penguin has 12 million active players and 700,000 subscribers, Pixie Hollow had roughly 1.6 million monthly users with the Pirates game crested at 500,000. But as Disney was trying to launch the World of Cars virtual world, it was clear that this form of entertainment had peaked. Club Penguin’s growth stalled and the other Disney games had just begun their downward trend. It was estimated that there were 200 virtual worlds on the internet vying for everyone’s attention.

The Next Big Thing

Perhaps it was the App Store’s launch in 2008 that began the trend of moving kid’s digital consumption from flash based desktop games to mobile devices. Maybe tastes just changed, perhaps the business model was just untenable, but whatever it was, it was clear that the golden age of virtual worlds was coming to an end. Servers were combined and new game elements and maintenance were obviously decreased. Remember that $700 million that Disney was supposed to pay for Club Penguin? Well, Disney only ended up paying $350 as the business failed to meet growth targets according to a filing with the Securities Exchange Commission. To be frank, you must not have been paying attention if you were shocked that Disney’s investment in virtual worlds was not playing out as they had hoped. It should also be noted that Disney Interactive never turned a profit during this period.

2010 was the begining of the end. Tired of ongoing loses, longtime Disney Interactive head Steve Wadsworth was replaced with John Pleasants and James Pitaro. Pleasants, who came with the Playdom acquisition was to lead the video game part of the segment while Pitaro was to focus on Disney’s web presence. (Longtime Disney followers would note that Disney tried splitting these responsibilities in the past ). Disney had just acquired mobile game maker Tapulous and social game creator Playdom who were supposed to transform Disney’s investment in games. Disney was going to grow their web and social presence through Disney.com and their network of “mommy blogger” sites.

Reportedly, Lane Merrifeld clashed with John Pleasants which caused the Club Penguin co-founder to depart in 2012. Pleasants himself would resign a year later uniting the whole division under James “Jimmy” Pitaro. But before he left, one major decision was made: Toontown Online, Pirates of the Caribbean Online, and Pixie Hallow would end their runs on September 19th, 2013. Of course, those that were playing the games were upset. They had invested many hours and sometimes money to building their characters and mastering levels. Users were pointed to Club Penguin as the last remaining world, but many wondered how much longer would that game survive facing declining numbers and consumer trend headwinds.

Following the merger of Disney Interactive and Disney Consumer Products, it became clear in 2015 that the end was coming. Disney laid off over 30 Club Penguin employees and shutdown the German and Russian editions. The spinoff apps were removed from the App Store and Disney had all but stopped promoting the game. The other foot dropped on January 30th, 2017 when it was announced that the existing game would shut down on March 2th9. The successor, Club Penguin Island, would feature new Penguins and be a mobile based experience. With this move, Disney’s experiments in virtual worlds was done.

Toontown Online

Toontown Online

Of course, this joins the long-list of technological ventures that Disney did not find long-term success with. Among Disney’s failures are Daily Blast, Go Network, Enhanced TV, Digisynd, Playdom, Tapulous, Disney Internet Guide, Kaboose, Disney Infinity, Fall Line Studios, Junction Point Studios, Wideload Games, Propaganda Games, Disney Auctions, and let’s not forget Disney Mobile. Some observers would also point to Maker Studios as another example of a Disney digital investment which did not turn out as expected with the high executive turnover being a symptom. Disney’s frustration with not being able to make Disney Interactive successful forced its combination with Disney Consumer Products.

Just because Disney’s Virtual World era is officially coming to an end, it doesn’t mean that it has been all for not. Club Penguin had a good run and many kids (and some adults) made many memories that they will keep with them for a lifetime. Isn’t that what Disney is all about? Just look at fan-made revivals such as Toontown Rewritten that show the passion created by these games. And is a 12-year run not something to be proud of?

Club Penguin lasted longer than the Mickey Mouse Club, The Disney Afternoon, and Lost. All of these are considered successful and sources of nostalgia for many. While we would love the Disney ventures that we care about would last forever, sometime we just need to appreciate the time we had with them. It just depends on your perspective. There is no doubt that all of Disney’s virtual worlds, even the Cars one, was more succesful than Disney Mobile.