Take-Two to buy Zynga for $11B to compete with EA

on

|

views

and

comments

- Advertisement -

The video game publisher Take-Two Interactive announced on Monday that it will acquire competitor Zynga for $11 billion in order to expand its versatile portfolio of games. The takeover includes popular titles like Grand Theft Auto and FarmVille, which are quickly converting into mobile-friendly formats to meet the ever-growing demand for more affordable gaming options.

The acquisition, one of the biggest to date in the gaming industry, increases its presence across all three major platforms. The skyrocketing popularity of smartphones (over traditional consoles & PCs) has opened up whole new opportunities for companies like this.

“Combining Zynga’s expertise in mobile and next-generation platforms with Take-Two’s best-in-class capabilities and intellectual property will enable us to further advance our mission to connect the world through games,” said Frank Gibeau, the CEO of Zynga.

Take-Two Interactive well known for the game Red Dead Redemption is acquiring indie game developer, Zynga. The offer price represents a 64% premium over the last closing price for Zynga shares. Including debt, the acquisition is worth $12.7 billion

Take-Two Interactive has ventured into a new area of the gaming industry by purchasing Zynga, a company that develops mobile games. Take-Two Interactive is behind some of your favorite franchises, including Grand Theft Auto, Red Dead Redemption, Borderlands, and NBA 2K.

“It’s a bombshell deal … Zynga was on the list of potential M&A transactions for a long time in the video game business,” said Serkan Toto, CEO of videogame consulting firm Kantan Games.

Take-Two to buy Zynga

- Advertisement -

Take-Two has no presence in the mobile market but it could benefit from doing so. Industry experts say that Take-Two cannot stand still when other rival companies are increasing their presence in the market.

Electronic Arts have been on a buying spree, most notably acquiring Glu Mobile for $2 billion last year. They’ve also made a string of acquisitions in the past two years, including Echtra and Chartboost.

Mobile gaming is set to grow rapidly in the next few years and will reach $116.4 billion by 2024, as it is expected to grow at an annual CAGR of 11.2%. The data comes from Newzoo’s research on the industry.

Zynga’s agreement with AdColony sent the company’s stock plunging in recent months. Some investors are worried that it may be affecting Zynga’s revenue. The stock has also struggled to meet Wall Street’s profit targets for 3 quarters in a row.

“It is a big price tag for a company that has not consistently produced profits or new blockbusters,” said Erik Gordon, professor at Ross School of Business, University of Michigan.

- Advertisement -

Take-Two has $2.7 billion in loan and will most likely use the rest of the money obtained to fund them with cash and by issuing new debt

The company would save at least $100 million within the next few years, but it will depend on how successful this merger will be. They could get even wealthier in the long run if they are successful.

Also Read:

The Sandbox plans to Launch Metaverse Mega City with Hong Kong high-profiles

- Advertisement -

GameStop shares surge after announcing plans to enter NFT and Crypto space

Samsung Opens Virtual Reality Store in Decentraland

- Advertisement -
Share this
Tags

Must-read

0x ZRX White Paper

Hello and welcome to this blog post about 0x ZRX White Paper. I am very excited to know that you are interested in this...

0x ZRX

0x ZRX is an open-source protocol for powering decentralized exchange of tokens and assets issued on the Ethereum blockchain. https://www.youtube.com/watch?v=-UMhhM5z7cc Website ...

Recent articles

More like this

LEAVE A REPLY

Please enter your comment!
Please enter your name here

en_USEnglish