History and development
Development on Club Penguin began in 2003 when Lance Priebe and Lane Merrifield, employees at New Horizon Productions (which became New Horizon Interactive in 2005) in Kelowna, British Columbia,[9] saw a need for "social networking for kids".[3] As Merrifield later described the situation, they decided to build Club Penguin when they were unsuccessful in finding "something that had some social components but was safe, and not just marketed as safe" for their own children.[10] Merrifield and Priebe approached their employer, David Krysko, with the idea of creating a spinoff company to develop the new product.[9]
Prior to starting work on Club Penguin, Lance Priebe had been developing Flash web-based games in his spare time.[11] As part of Rocketsnail Games, Priebe released Experimental Penguins in 2000, which featured gameplay similar to that which was incorporated into Club Penguin. Although Experimental Penguins went off line in 2001, it was used as the inspiration for Penguin Chat, which was released shortly after Experimental Penguin's removal. Thus, when Priebe, Merrifield and Krysko decided to go ahead with Club Penguin in 2003, they had Penguin Chat to inform part of the design process. After two years of testing and development, the first version of Club Penguin went live on October 24, 2005.[1]
Growth was rapid. Club Penguin started with 15,000 users, and by March that number had reached 1.4 million — a figure which almost doubled by September, when it hit 2.6 million.[9] By the time Club Penguin was two years old, membership had reached 3.9 million users.[12] At the point when they were purchased by Disney, Club Penguin had 12 million accounts, of which 700,000 were paid subscribers, and were generating $40 million in annual revenue.[2]
Although the owners had turned down lucrative advertising offers and venture capital investments in the past,[9] in August 2007 they agreed to sell the company (both Club Penguin and the parent company) for the sum of $350 million.[2] In addition, the owners were promised bonuses of up to $350 million if they were able to meet growth targets by 2009.[13] In making the sale, Merrifield has stated that their main focus during negotiations was philosophical,[10] and that the intent was to provide themselves with the needed infrastructure in order to continue to grow.[3]
On March 11, 2008 Club Penguin released the Club Penguin Improvement Project (CPIP).[14] This project allowed players to be part of the testing of new servers put into use in Club Penguin on April 14, 2008.[15] Players had a "clone" of their penguin made, to test these new servers for bugs and glitches.[16] The testing was ended on April 4, 2008.[17]
In April 2008, Club Penguin opened its first international office in the UK for local support,[18] and Disney announced in June, 2008, plans to open an Australian office in August of that year.[19]
Business model
Prior to being purchased by Disney, Club Penguin was almost entirely dependent on membership fees to produce a revenue stream.[5] Nevertheless, the vast majority of users (90% according to The Washington Post) chose not to pay, instead taking advantage of the free play on offer.[20] Those who choose to pay do so because full (paid) membership is required to access all of the services, such as the ability to purchase virtual clothes for the penguins and buy decorations for igloos;[7] and because peer pressure has created a "caste system" separating paid from unpaid members.[21] Advertising, both in-game and on-site, have not been incorporated into the system, although some competitors have chosen to employ it: for example Whyville, which uses corporate sponsorship,[22] and Neopets, which incorporates product placements.[23]
An alternative revenue stream has come through the development of an online merchandise shop, which opened on the Club Penguin website in August 2006,[24] selling stuffed Puffles and T-shirts. Key chains, gift cards, and more shirts were added on November 7, 2006.[25] October 2008 saw the release of a line of plush toys based on characters from Club Penguin, which were made available online (both through the Club Penguin store and Disney's online store), and in retail outlets.[26]
As with one of its major rivals, Webkinz, Club Penguin has traditionally relied almost entirely on word-of-mouth advertising to increase the membership.[27]
Child safety
One of the major concerns when designing Club Penguin was how to improve both the safety of participants and the suitability of the game to children. As Lane Merrifield stated, "the decision to build Club Penguin grew out of a desire to create a fun, virtual world that I and the site's other two founders would feel safe letting our own children visit."[28] As a result, Club Penguin has maintained a strong focus on child safety,[29] to the point whereby the security features have been described as almost "fastidious" and "reminiscent of an Orwellian dystopia", although it has also been argued that this focus may "reassure more parents than it alienates."[30]
The system employs a number of different approaches in an attempt to improve child safety. The key approaches include:
- Preventing the use of inappropriate usernames.[31]
- Providing an "Ultimate Safe Chat" mode, which limits players to selecting phrases from a list.[29]
- Using an automatic filter during "Standard Safe Chat" (which allows users to generate their own messages).[32] In particular, profanity is blocked, even when users employ "creative" methods to insert it into sentences.[31] In addition, even some seemingly innocuous terms are filtered, such as "mom", and both email addresses and telephone numbers are blocked.[29]
- Employing paid moderators. Out of 100 staff employed in the company in May 2007, Merrifield estimated that approximately 70 staff were dedicated to policing the game.[27]
- Promoting some veteran users to "secret agent" status, and encouraging them to report inappropriate behavior.[29]
Each game server offers a particular type of chat — the majority allowing either chat mode, but some servers allow only the "Ultimate Safe Chat" mode. When using "Standard Safe Chat", all comments made by users are filtered. When a comment is blocked, the user who made the comment sees it, but other users are unaware that it was made — suggesting to the "speaker" that they are being ignored, rather than encouraging them to try and find a way around the restriction.[29]
Beyond these primary measures, systems are in place to limit the amount of time spent online, and the site does not feature any advertisements, for, as described by Merrifield, "within two or three clicks, a kid could be on a gambling site or an adult dating site".[27] Nevertheless, after Club Penguin was purchased by Disney, concerns were raised that this state of affairs may change, especially in regard to potential spin-off products[33] — although Disney has continued to insist that it believes advertising to be "inappropriate" for a young audience.[23]
Players who use profanity are often punished by an automatic 24-hour ban, although not all vulgar language results in an immediate ban. Players found by moderators to have broken Club Penguin rules are punished by a ban lasting "from 24 hours to forever depending on the offense."[34]
Memberships
Subscribed memberships
Players may pay to become subscribed members and doing so grants them additional in-game benefits. Players who have paid membership may buy clothing, wigs and furniture, own up to fourteen Puffles (the virtual pets of Club Penguin), enjoy early access to new parts of the game, buy furniture for their puffles, have access to all puffle breeds, and open up their igloos. Members also have access to Members-only parties hosted by Club Penguin.[35]
Free memberships
Club Penguin provides a "non-membership" option. Although such play is free, it does not include all of the benefits of being a member.[7] Non-members may still purchase different colors for their penguins, buy player-card backgrounds, travel to any place in the Club Penguin world (except during members-only parties), and play games. Non-members may also receive and use items given out at parties that are held monthly for all players. However, non-members are restricted to only two red or blue puffles, and no member-only puffles may be bought,[36] (although if a former member once owned puffles, they may be kept). Non-members cannot purchase clothes, furniture, wigs, hats, or igloo upgrades.[21]
Beta testers
During the beta stages of Club Penguin's development, anyone could sign up to be a beta tester. Beta testers received special benefits upon the official release of Club Penguin, including a month of paid membership, coins and a pink and yellow party hat.[37
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