Take-Two Gets Hands-On Zynga To Accelerate Consolidation Of Video Game Industry

In the video game market, this is a landmark operation. On Monday January 10, the American publisher Take-Two announced that it had reached an agreement to acquire Zynga, a mobile gaming giant. The $ 12.7 billion (€ 11.2 billion) transaction is one of the largest ever in the industry. To date, it is only surpassed by the acquisition of Activision by Vivendi in 2007 for an amount of 18.9 billion dollars.

The two companies are less well known than the games that made them successful. Behind Take-Two, we find popular titles on PC and consoles such as Grand Theft Auto (GTA), Red Dead Where NBA 2K. For its part, Zynga had its greatest success with the game Farmville, launched in 2009. After seeing its share price drop by nearly 50% over the past year, the Californian company was a choice for Take-Two, which had already positioned itself at the end of the year. the year 2020 to get their hands on Codemasters, specialist in racing games, before being overtaken by Electronic Arts, for a buyout of just over $ 1 billion.

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This time, the operation is on a whole different scale and takes on much greater strategic importance. It allows the New York publisher to enter the mobile world through the front door. Admittedly, the maneuver has a price, but not exaggerated with regard to its turnover (2 billion dollars for the fiscal year ended in February 2021), according to Charles-Louis Planade, analyst at MidCap Partners, who recalls that“No large group from the PC and console environment has succeeded in breaking into the mobile world without acquisition”. The expert compares this takeover to that carried out by Activision of King Digital Entertainment (Candy Crush) at the end of 2015.

Two complementary companies

The operation is interesting for two reasons. The two companies appear particularly complementary on paper, with different player profiles: more occasional for Zynga, more assiduous for Take-Two. Above all, the maneuver allows the purchaser to open up to a new economic model – that of mobile gaming – where the titles are not monetized by the act (by the purchase of a title) but over time. , with purchases over the course of experience.

This Monday’s announcement also confirms the consolidation movement observed in the video game sector. “For two or three years”, according to M. Planade. This was notably marked by the acquisition, in September 2020, of ZeniMax Media (Fallout, Doom, Wolfenstein, etc.) by Microsoft for $ 7.5 billion, but is mostly reflected in the inflation of less flashy buyouts of independent studios.

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