Take-Two, the publisher behind some of the biggest names in the game like Grand Theft Auto and NBA 2K, today announced an agreement to purchase mobile game company Zynga for $ 12.7 billion. If the acquisition of FarmCity creator passes, it will be the biggest sale in video game history.
A spokesperson for Take-Two Interactive wrote in a press release that the agreement “unifies very complementary companies, including Take-Two’s best-in-class console and PC game portfolio, and Zynga’s advanced mobile franchises ”. With the merger, Take-Two would have an established pipeline to bring more RGT, BioShock, XCOM, Civilization, and other franchises to social and mobile platforms.
“We believe that we have the best collection of console and PC intellectual property in the interactive entertainment industry and that it is virtually completely untapped by mobiles and free-to-play games around the world,” Strauss Zelnick, CEO of Take- Two. told investors on a call today. “The best Zynga studios can help us develop this property. Their premier free-to-play mobile publishing operations can bring that to consumers and delight those consumers and create recurring consumer spending along the way.
In addition to FarmCity and Words with a friends, Zynga’s biggest games in recent years include CSR Race 2, Zynga Poker, and a plethora of slots games, all of which are free to play and earn money through in-game advertising and microtransactions. Zynga is also preparing to launch Star Wars: Hunters, an arena fighting game coming to Nintendo Switch, iOS, and Android later this year, having previously been delayed.
The deal, however, has not been officially concluded. In addition to having to go through a regulatory review, a provision of the preliminary agreement gives Zynga 45 days accept a better offer from someone else. At $ 12.7 billion, Take-Two is already paying 64% on Zynga’s current share price, so it’s unclear whether or not a new buyer will arrive. Take-Two has already tried to buy racing game makers Codemasters in 2020, but was ultimately outbid by EA.
Take-Two’s current attempt to buy Zynga would be by far the biggest gaming acquisition in a rapidly consolidating industry. Last year Microsoft reached an agreement to buy Old scrolls Bethesda manufacturer for 7.5 billion dollars, the culmination of a rapid expansion of its range of proprietary studios. Swedish video game company Embracer Group has also embarked on a shopping spree, to tear out Borders maker Gearbox Entertainment and the studio behind the next one Star Wars: Knights of the Old Republic ps5 remake, Aspyr. And then of course, there is the Chinese giant Tencent, which invests or buys almost everything else.
It’s unclear exactly what kinds of new collaborations the Zynga deal could lead to. The great dystopia simulator BioShockVille? The literary tactic game Words with aliens? Somehow, more ways to add microtransactions to NBA 2K? Either way, including the potential of even more microtransaction-loaded games, Consolidation has a sucking way for everyone except consolidators.
Update: 1/10/21, 10:07 am ET: Added more information from a Take-Two conference call this morning.