Grand Theft Auto Meets FarmVille As Take-Two Makes Zynga An Acquisition Offer It Can't Refuse
Take-Two is purchasing all of Zynga’s outstanding shares with cash and and its own stock at $9.86 USD per share, "implying an enterprise value of approximately $12.7 billion." Take-Two has noted that there should be over $100 million in cost savings within two years of the purchase. Additionally, there should be $500 million in adjusted revenue over an indeterminate amount of time.
Take-Two says it is purchasing Zynga for several reasons. First, Take-Two will gain access to Zynga’s mobile titles. These include favorites such as games in the FarmVille and Words with Friends series and Harry Potter: Puzzles & Spells. Second, there are various financial and strategic benefits like greater expansion into Asian markets, including India and the Middle East. Last, the transaction will allow Take-Two to "capitalize on the interactive entertainment industry’s strong tailwinds, including a leadership position in mobile" and to develop "new mobile games for many of the iconic franchises within Take-Two’s portfolio of intellectual property."
This deal to acquire Zynga could potentially mean we will be seeing more mobile games from franchises like BioShock, Borderlands, Grand Theft Auto, NBA 2K, and Red Dead. Some already exist but Take-Two's focus has largely been on PC and console in the past. However, Take-Two Interactive has noted that mobile gaming is the fastest growing gaming segment. The publisher also acquired Nordeus, a Serbian mobile gaming developer best known for its football management simulation Top Eleven, in June 2021.
It has been an interesting year for Zynga. FarmVille and related games were removed from Facebook at the beginning of last year because Adobe ended support for its Flash Player and therefore Flash Player-based titles. FarmVille has become more popular on mobile platforms over the last couple years, but it was still a moment of "mourning" for the developer. Zynga also announced in 2021 that Star Wars: Hunters, a game that will be available on the Nintendo Switch and mobile devices sometime this year.
Image courtesy of Zynga