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Take-Two to Acquire Zynga for €11.2 billion

In one of the biggest gaming deals to date, Take-Two Interactive is set to acquire Zynga. The acquisition, valued at around €11.2bn (US$12.7bn), will make Take-Two one of the biggest mobile game companies in the world. 

Take-Two is a holding company famed for titles such as Grand Theft Auto and Red Dead Redemption, with a respected reputation in console gaming. Zynga is a market leader in mobile gaming, with popular titles such as Farmville and Words With Friends. The €11.2bn ($12.7bn) cash-and-stock deal was announced on January 10. 

One of the biggest gaming deals ever

Take-Two reportedly offered around €8.68 (US$9.86) per share of Zynga. After the announcement, shares in Zynga rose significantly, by 46%. In a statement, Take-Two CEO Strauss Zelnick said “This strategic combination brings together our best-in-class console and PC franchises, with a market-leading, diversified mobile publishing platform that has a rich history of innovation and creativity”.

Officials at Zynga concurred in a tweet. “Combining Zynga’s expertise in mobile and our next generation platforms with Take-Two’s best-in-class capabilities and intellectual property is a game changing opportunity for our industry”, they said. 

Take-Two noted that it expects around €88 million ($100 million) in annual cost savings within two years of the deal being finalised. In an unspecified timeline, the company predicts savings that total upwards of €439 million ($500 million) in adjusted revenue. 

As well as this, the Take-Two board will grow from eight to 10 members, with two additions from Zynga’s board. It is reported that the deal will be closed by June 30, 2023.

zynga
Mobile gaming company Zynga is currently headquartered in San Francisco, California. (Photo: Cullen328/CC BY-SA 3.0)

A gold rush for the gaming industry

The video game industry has seen something of a boom within the past two years. The impact of lockdown reportedly increased gaming industry revenue by 20% in 2020, to a total value of approximately €153.87bn (US$174.9bn). At the tail end of 2021, Accenture reported the value of the gaming industry to be €250bn. With lockdown restrictions easing in many parts of the world, mobile gaming has become a go-to market for major developers and publishers. 

Last year, Electronic Giants completed an acquisition of Glu Mobile for €2.11bn (US$2.4bn). The deal is sure to establish EA, with major titles such as FIFA and Battlefront, as a bigger name in the world of mobile gaming. The deal is set to add growth to EA’s mobile business, with a network of 100 million monthly active players in the mobile world.   

This followed an acquisition of British racing game specialist Codemasters, at a value of around €1.06 billion. The deal was completed in February 2021, and according to reports, EA even outbid Take-Two to acquire the company. In a true sign of how competitive the mobile gaming industry has become, Take-Two was apparently far into the deal, with reports stating that the publisher had predicted to acquire Codemasters by January 2021. 

What the Take-Two and Zynga deal means for both companies 

With this acquisition, Take-Two will add a range of popular titles to its already-impressive portfolio. Among the new titles are Farmville, Words With Friends and High Wheels!.

There is more to the deal than just acquiring games, though. Take-Two will reportedly have access to Zynga’s resources in building free-to-play mobile titles. This means that Take-Two could take games like Grand Theft Auto and make them mobile gaming properties. Zynga CEO Frank Gibeau will reportedly lead operations for Take-Two’s mobile games. 

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