Lazard Capital’s Colin Sebastian just sent out a note applauding Electronic Arts (ERTS) for its ~$400 million Playfish acquisition. He pegs Playfish’s revenues over the next 12 months at $100 million.
He writes, “social games represent a significant growth opportunity, and that Playfish is already profitable.”
Like EA, Colin isn’t worried that Playfish earns some of its revenues from lead-generation “offers.”
Despite some recent concerns over the lead generation practices on social games, it is important to note that there are a variety of options, including advertising, direct payments, pre-paid cards, and mobile. We believe the flexible payment options are a key element in generating virality, allowing for natural price segmentation and monetization.