Take-Two is a publisher for some of the biggest and trendiest video game franchises in the world like GTA Online, Red Dead Redemption 2, Borderlands, or Civilization 6. They have now made an acquisition offer for the mobile company Zynga for over 12.7 billion US dollars. That is significantly more than Microsoft paid for Bethesda in 2020. With that money, they could also develop Red Dead Redemption 2 about 23.5 times.
This is the news:
- In a conference call yesterday, the CEO announced that Take-Two has made an acquisition offer for Zynga. The offer was 12.7 billion US dollars. This means they are paying a premium of 64% over the current market value of the company behind FarmVille.
- Zynga has 45 days to find a better offer. The deal is not yet finalized.
- As a result, Zynga’s stock rose considerably by 40.67% – however, Take-Two’s stock fell by 13.13%.
23.5 times Red Dead Redemption 2 – 48 times GTA 5
How much money is that? 12.7 billion US dollars for Zynga is an extremely high amount. The development costs for Red Dead Redemption 2 are estimated to be around 540 million US dollars. Take-Two could finance about 23 times such a major project with the money they are paying for Zynga (via screenrant).
Red Dead Redemption 2 is considered one of the best games of all time.
GTA 5 is said to have cost “only” 265 million US dollars. So for that money, about 48 times could have been possible. (via metro)
Apparently, the extremely high price that Take-Two is offering for Zynga has caused the “Take-Two” stock to drop on the market.
Why is Take-Two doing this? Essentially, they say: Acquiring Zynga promises them around 500 million US dollars in revenue per year in the future that they would not achieve otherwise.
By acquiring the company, they now have a “clear path” to bring their franchises, which previously only ran on PC and consoles, to mobile. In the coming years, it is expected that 50% or more of Take-Two’s revenue will come from mobile. GTA 5 was the big hit here in recent years.
With the acquisition of Zynga, Take-Two acquires a catalog of mobile games like FarmVille, Words with Friends, CSR Racing, Harry Potter: Puzzles and Spells, and many more. In addition, there are the technology and data of the companies. They also gain access to the NFT/Blockchain technology from Zynga.
“I hate that mobile gaming generates so much money”
How is this being discussed? It is being discussed relatively calmly on reddit and viewed from a business perspective. Only occasionally are there top comments that seem more heated:
- One user says. “This is almost double what Microsoft paid for Bethesda – it just shows how much money is in the mobile market”
- “Now 2 of the largest gaming companies, Activision Blizzard and Take-Two, own 2 of the largest mobile studios in the world, King and Zynga.”
- “I hate that mobile gaming generates so much money, and there are maybe 3 mobile games worth playing, and almost all good ones are just ports.”
People are especially surprised by how much money is involved in the deal. In retrospect, the acquisition of King (Candy Crush) by Activision Blizzard seems like a bargain, it is said.
Don’t you guys have phones?
What’s behind it: The deal shows the breadth of the gaming market and that gaming is developing in different directions:
- On one side, there are AAA games that push the limits of what is possible and create virtual worlds where gameplay seems to have unlimited possibilities. They are milestones of the genre like Red Dead Redemption 2, Skyrim, or GTA Online.
- On the other side, there are games that rely on simple gameplay principles, grind mechanics, and microtransactions.
Both types of games exist in the same economic cosmos, even if they target different audiences. In recent years, and probably still now, many fans of traditional PC and console games see the danger that “their games” are being neglected or overshadowed by casual games.
This was seen, for example, in reactions to the announcement of Diablo Immortal at BlizzCon 2018. But the situation seems to have calmed down somewhat. That companies like Take-Two are making such investments for incredibly high sums seems to be becoming the new normal.
This battle for the “one true gaming”, the PC and console gaming, does come up now and then, but has noticeably cooled down.
As the major next project of Take-Two, many fans wish for GTA 6:
GTA 6: What rumors are saying about release, announcement, and setting
