It all started in 2007 when four partners came together in London - a Finn, a Belgian and two Lebanese. In a remarkably prescient move the founders decided to create an online social-gaming company that would utilise the then fresh-out-of-beta Amazon Web Services. The company’s first game was Who Has The Biggest Brain, which managed to attract more than a million daily players.
Its success helped to attract 21 million USD from Accel Partners and Index Ventures, funds that would enable the company to develop further hits such as Pet Society, Restaurant City and Country Story. Yet, given that the games were free to play, how you may ask, would Playfish make back the money it was spending on developing its products? The reality was that users were happy to trade hard cash for virtual currency. Techniques such as charging players to send out virtual gifts, buy virtual furniture for their virtual homes, or dress their virtual pets with the latest fashions helped make users feel more socially valued. Though they were spending but a few cents at a time, the sheer number of Playfish users meant that the company was soon earning over a million USD a week in revenues.
The international gaming giant, Electronic Arts, was quick to recognise the massive potential yield in this burgeoning market and after lengthy negotiations, they managed to acquire Playfish for a total of 400 million USD: 275 million USD in cash, an additional 25 million USD in stock and another 100 million USD in earn-outs should the business hit certain milestones. Considering the founders invested just over two years of work, that is an amazing sum indeed.
WHAT Playfish
WHO Kristian Segerstrale, Sebastien de Halleux, Sami Lababidi and Shukri Shammas
WHEN Founded in late 2007 with a multi-million dollar buyout just over two years later
WHY 200 million downloads, 50 million monthly active users, 10 million daily active users – all started with Arab talent and investment. It’s reason enough to make us all proud.
www.playfish.com
