Take-Two, a PC gaming company, is buying Zynga, a mobile gaming company, for approximately $12.7 billion. This is probably the biggest acquisition in video game history.
This is also a big deal for gamers and here's why.
Two Heads Are Better Than One
Take-Two Interactive has added Zynga and its roster of games to its portfolio in a deal that values one Zynga share at $9.86. Take-Two will pay for each Zynga stock with $3.50 in cash. They will cover the remaining balance of $6.36 by paying with shares of Take-Two common stock. This brings the value of Zynga to $12.7 billion. The sale will take about a year to conclude, providing it receives shareholder and regulatory approvals.
This is a great acquisition for Take-Two. Zynga publishes very popular free-to-play mobile games like CSR Racing, FarmVille, and Words with Friends. Zynga has suffered a significant drop in share price since it went public, so the timing was right for Take-Two to swoop in.
Take-Two expects to save millions of dollars in operational costs. They will also attract more users, and expand market share by exploiting Zynga's infrastructure and talent.
Why This Is a Big Deal for Gamers
Take-Two will be relying on Zynga to release free-to-play mobile versions of its biggest franchises. On Monday, Take-Two CEO Strauss Zelnick told investors:
“We see tremendous untapped potential to bring Take-Two’s renowned console and PC properties to mobile, a high-priority initiative that will be energized by the addition of Zynga’s leading development, publishing, and live operations teams.”
Take-Two publishes hugely popular games including Grand Theft Auto (GTA), the NBA 2K series, Red Dead Redemption, and Bioshock. Its acquisition of Zynga will allow it to develop and deploy free-to-play versions of its games on mobile phones. To that end, they will leave Zynga's management team intact.
Gamers to Benefit From Zynga Acquisition
Take-Two's purchase of Zynga should be good news for gamers. It means you'll no longer have to wait to get home to indulge in a bit of GTA. The game will probably be available on your phone very soon and you can get your adrenaline fix on the subway or in an Uber. Gamers who cannot afford PCs and laptops, but have a basic smartphone, will also have access to a wider variety of Take-Two games.