Take-Two Interactive Agrees to Buy ‘Words With Friends’ Creator Zynga

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Take-Two Interactive
Courtesy of DrMedYourRasenn (Pixabay CC0)

The merger of Take-Two Interactive Software Inc. and mobile games giant Zynga Inc. appears to delight investors. Shares rose after Take-Two agreed to buy Zynga in a deal that will consolidate the companies creating a significant presence in the world of video gaming. As a result, French video game maker Ubisoft Entertainment SA’s shares traded 4% higher at $48.22 (EU42.57). The announcement indicated:

Take-Two Interactive
Courtesy of Gloria Garcia (Flickr CC0)

Overall, the transaction, expected to close between April and June, is valued at $12.7 billion. The deal merges two gaming powerhouses. Take-Two Interactive Software brings consoles and PC games to the agreement, and Zynga brings its massive collection of mobile games.

Take-Two Interactive CEO Strauss Zelnick said the cash-and-stock deal would give the software company a robust mobile presence, the fastest-growing segment of the global videogame industry. Take-Two, known for “Grand Theft Auto,” “Civilization,” and the “NBA 2K” series, will expand its mobile inventory with Zenga’s hits like “Words With Friends,” “CSR Racing,” Zynga Poker,” and “Farmville.” Last year, Zenga’s “Toon Blast” was its top earnings generator. The mobile game amassed over $415 million from player spending.

Take-Two Interactive
Courtesy of James Mellers (Flickr CC0)

Zelnick told The Wall Street Journal that closing this deal provides the software maker with more than 50% of its net bookings that will come from mobile. The combined company will have over a billion users, he added. In addition, they will use the opportunity to cross-promote content to a larger audience.

An attractive part of the agreement is Zynga’s advertising platform, which is rare for gaming companies, Zelnick said. Instead, most game makers rely on third-party advertisers.

Eric Handler, an MKM analyst, declares that Take-Two Interactive’s purchase merger of Zynga will benefit both companies. He recently named Zynga as one of his top stock picks for 2022. “The videogames industry is increasingly becoming one of scale,” he added.

Written by Cathy Milne-Ware

Sources:

Market Watch: Ubisoft Shares Rise After Take-Two, Zynga Merger Deal; by Mauro Orru
The Wall Street Journal: Take-Two Interactive to Buy FarmVille Maker Zynga in $11 Billion Deal; by Sarah E. Needleman and Matt Grossman
Tech Crunch: Take-Two to acquire mobile gaming giant Zynga for $12.7B; by Ingrid Lunden

Featured and Top Image Courtesy of DrMedYourRasenn’s Pixabay Page – Creative Commons License
First Inset Image Courtesy of Gloria Garcia’s Flickr Page – Creative Commons License
Second Inset Image Courtesy of James Mellers’ Flickr Page – Creative Commons License

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