Yesterday Take-Two announced a purchase agreement for Zynga (FarmVille, Words With Friends), the company specializing in mobile and social games, worth $ 12.7 billion or about € 11.22 billion – the highest purchase in the industry to date. The operation will allow sagas such as Grand Theft Auto The BioShock to mobiles, as well as making Take-Two one of the most important publishers in social games. Nevertheless, Investor reaction has not been as positive as you might think, at least in the case of Take-Two. The acquisition is not closed – it will be completed in the first half of 2022 and Zynga has until February 22 to hear other offers.
After the announcement, the value of Take-Two shares fell 13.13% – they fell more than 14% – due to criticism of a transaction that investors consider too expensive. To put it in perspective, is the largest single-day company decline since December 4, 2009 when they fell more than 29.12%. At the other extreme we have the closing of Zynga, which rose 40.67% yesterday.
Take-Two may be overpricing Zynga to avoid a repeat of the failed Codemasters acquisition, which at the last minute passed into the hands of Electronic Arts.
Take-Two wants mobile games to represent 50% of its business
The Rockstar or 2K editor said yesterday that the mobile market currently accounts for 10% of its business, but After the agreement, it will be achieved that in 2023 it rises up to 50%. The move is important to Take-Two, creator of some of the biggest hits of the past decade, but which has come under fire for its low number of releases –GTA 5 debut in 2013 and there are still years to go until its sequel. Zynga will provide a new stable source of income to accompany GTA Online Y Red Dead Online.