Videogame, here’s how FarmVille gets married with Take-Two
Take-Two Interactive, the creator of the game Grand Theft Auto, has announced the purchase of Zynga, the mobile game company that developed FarmVille. All the details
Video game giant is born: Take-Two Interactive, the company of the popular Grand Theft Auto, buys Zynga and its FarmVille.
Yesterday Take-Two Interactive announced that it will acquire Zynga for $ 12.7 billion. Best known for its FarmVille series, Zynga initially flourished on Facebook, becoming the most successful app developer on the platform at one point. In the years since, Zynga has focused on mobile devices, hoping to take advantage of the explosive growth in the age of smartphones, CNBC points out.
Take-Two said the acquisition of Zynga would make it "one of the largest publishers of mobile games, the fastest growing segment of the interactive entertainment industry."
This is the latest successful acquisition in a series of major $ 180 billion video game deals. In 2020, Microsoft bought Bethesda, the company behind the Fallout and The Elder Scrolls franchises, for $ 7.5 billion. In 2021, Chinese tech giant Tencent announced deals to buy British gaming studio Sumo Group, as well as Turtle Rock Studios, the US creator of the zombie game Back4Blood.
All the details.
THE OPERATION
Take-Two will fork out $ 9.86 per share for the creator of FarmVille, with a 64% premium over Friday's close. This is almost $ 12.7 billion. Take-Two said part of the deal would be funded by $ 2.7 billion in funding from JPMorgan. The remainder will come from its balance sheet liquidity and proceeds from the new debt issue.
DOES NOT APPRECIATE WALL STREET
The transaction, in shares and part in cash, did not convince Wall Street where Take-Two shares lost up to 14% on Monday. Zynga, on the other hand, made a decisive advance of more than 44% in a heavy session for the American markets, weighed down by the decline in technology and frightened by a hawkish Fed expected to raise interest rates four times during the year.
THE TAKE-TWO STRATEGY
With Zynga, specializing in games for mobile devices and social networks, Take-Two strengthens itself beyond its traditional platforms such as the PlayStation and personal computers, paving the way for its 'heroes' to conquer smartphones.
Although FarmVille is Zynga's most popular game, the company has also released several other notable titles including CSR Racing, Empires & Puzzles, and Harry Potter: Puzzles & Spells, which is based on the Warner Bros. Harry Potter franchise. the two companies generate $ 6.1 billion in annual revenue, according to a Take-Two statement.
COMPETE WITH MOBILE GAMES PLAYERS
The companies said the combination will allow them to better compete with large traditional gaming incumbents like Activision Blizzard and EA, who have also bought new assets to expand their mobile offerings.
THE NEW GOVERNANCE
Under the agreement, the CEO of Take-Two Strauss Zelnick will lead the giant that will be born from the wedding. Zynga's number one Frank Gibeau will be responsible for Take-Two's mobile operations and oversee the integration of the two companies.
CLOSING
The operation should be completed by June 30th. There's also a 45-day go-shop period, which means Zynga can negotiate with other buyers for a better deal until Feb.24, Reuters points out.
THE COMMENT OF THE ANALYSTS
“It's a big price for a company that hasn't consistently produced profits or new hits,” said Erik Gordon, a professor at the Ross School of Business, University of Michigan. But with the mobile gaming market likely to reach a size of $ 116.4 billion by 2024, according to data firm Newzoo, some analysts said more offers are expected in the sector.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia-on-demand/videogame-ecco-come-farmville-va-a-nozze-con-take-two/ on Tue, 11 Jan 2022 11:53:29 +0000.