Club Penguin is, as you probably (or really should) know by now, a great example of a true second-generation MMOG. It's cute, cuddly, great for kids, and plays right in the browser (no dynamically mapped shadows in sight). It uses a combination of free play, subscription ($6/month), and item-based sales to generate revenue. Oh and there's no download, no retail, no spattered blood, blue elves, or female cat things overflowing their strangely armored bustiers.
Supposedly, New Horizon Interactive, the company that developed and runs Club Penguin from sunny Kelowna, BC, Canada, has turned down investment funding thus far -- with their approximately 50% gross margin, they just don't need the money. And, according to Paid Content, the company spurned an acquisition offer by News Corp for $200M. According to that site, they're now being courted by none other than Sony for (reportedly) $450M.
That's a lot of penguins.
As PaidContent points out, $450M is about 7.5x CP's projected 2007 revenues of $60M, so it's not a stratospheric price from that point of view. But, if this is at all accurate, it's a clear indication that the true commercial legitimacy and monetary value of MMOGs and virtual worlds -- those that make money anyway -- is beginning to be understood.
What does this mean for the future of MMOGs? Are behemoth 3D role-playing games going the way of the brontosaurus or is Club Penguin itself an anomaly?
Personally, I think it's extremely heartening to see a game like this so clearly rewarded. The market is changing, and this is primary evidence for it: The audience demographic is broadening; the gameplay is breaking out of "kill monster, get gold;" graphics are moving beyond ponderous if ever-more realistic 3D; and development methods are finally moving beyond mis-applied rough extensions of what's (sort of) worked in single-player games. I don't think mainline/first-generation MMOGs are dead, but I do think this sort of value-recognition in Club Penguin is more of a bellwether than an anomaly. The dinosaurs aren't gone, but the small mammals (or well-dressed flightless birds, as the case may be) are starting to claim their due.