Why Take-Two wants to pay nearly $13 billion for the maker of FarmVille
Take-Two Interactive just announced its intent to buy FarmVille developer Zynga for $12.7 billion in what could be the biggest acquisition in video game history. It's an absolutely massive deal; to put it in perspective, the acquisition would be $5 billion more than Microsoft's $7.5 billion purchase of the parent company of Skyrim maker Bethesda Softworks. You could throw in the money Disney paid for Lucasfilm and still have cash left over.
So what is Take-Two getting for its money? Yes, big Zynga games like FarmVille, Words With Friends, and High Heels! will join Take-Two's own roster of franchises that includes Grand Theft Auto, NBA 2K, and Civilization. But perhaps more importantly, Take-Two will now be able to use Zynga's expertise building hugely popular free-to-play mobile titles so it can make new hit games based on its own properties. In fact, Zynga will be the new brand for Take Two's mobile efforts, and current Zynga CEO Frank Gibeau will lead that organization, indicating the potential direction of Take Two's mobile future.
Developers across the industry have been bringing big franchises to mobile and earning a lot of money doing so. PUBG Mobile was the top-grossing mobile game worldwide in November 2021, earning "close to" $254 million, according to Sensor Tower. League of Legends: Wild Rift, the mobile-optimized version of the hit PC MOBA, was in the top ten for App Store revenue that same month. Pokémon Go brought in more than $5 billion in revenue as of its five-year birthday in July, Sensor Tower reported. The Tencent-owned studio that makes Call of Duty: Mobile reportedly earned $10 billion in 2020.
Also at Ars Technica, CNBC, and Wccftech.
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Embracer Group has been backing away from its all-encompassing position in the games industry lately. The latest divestment is Gearbox Entertainment, the studio behind the Borderlands series it bought in early 2021 for a deal that could have been worth up to $1.37 billion to Gearbox had it stayed inside the Swedish conglomerate's grasp.
The buyer is Take-Two Interactive Software, which had previously partnered with Gearbox on publishing Borderlands and other titles. Take-Two will issue new shares of its common stock to pay $460 million for Gearbox, to be completed before the end of June this year. Embracer paid $363 million in cash and stock for Gearbox in 2021 but promised up to $1 billion more should the developer hit earnings goals over six years.
[...] Gearbox has studios in Texas, Montreal, and Quebec City, Canada. The firm had 550 employees at the time of its acquisition, but divisions of the company had seen layoffs in January.
[...] Embracer had been acquiring properties in 2021 and 2022 with an understanding that a planned $2 billion investment from the Saudi-government-backed Savvy Games Group would give the new mega-conglomerate some runway.
[...] Once the Saudi deal fell through in May 2023, however, the firm announced that it would undergo a major restructuring through March 2024. That included the shutdown of Volition in August 2023 and deep cuts at Eidos that took an unannounced Deus Ex title with them.
Gearbox and its Borderlands franchise were the biggest get, however. The looter-shooter series, struck through with (often exhausting) "edge-y" humor, has reportedly sold more than 77 million copies and earned more than $1 billion in revenue throughout its run, according to Bloomberg. Take-Two noted that a Borderlands game was "in active development" at Gearbox in its acquisition announcement.
(Score: 2, Funny) by krishnoid on Tuesday January 11 2022, @07:35AM (1 child)
I can't see any problems with this acquisition [cnet.com] or the gameplay Zynga brings from their existing titles. People will be happily clicking away [cowclicker.com] soon enough.
(Score: 1) by khallow on Tuesday January 11 2022, @03:26PM
Sounds like some Take-Two stock holders got mugged. Shouldn't have been a bit of cash in that transaction.
(Score: 3, Touché) by looorg on Tuesday January 11 2022, @11:20AM (1 child)
Farmville is still a thing? I thought those players had moved on to like Stardew Valley and such things. I'm actually a bit surprised.
As a player that doesn't sound very great or good at all. That is not what I like in my games.
(Score: 2) by Freeman on Tuesday January 11 2022, @02:49PM
Farmville is a thing, because people get to it via their web browser. They don't have to install steam or a game and they don't have to pay for it. Then again, they typical Farmville player has likely spent more on random "app coins" or the like to have a substantial Steam collection by now.
Joshua 1:9 "Be strong and of a good courage; be not afraid, neither be thou dismayed: for the Lord thy God is with thee"