Another game giant is born! Grand Theft Auto's parent company acquired Zynga for $12.7 billion

Reporter | Peng Xin

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The game industry has seen another large-scale merger and acquisition.

On Jan. 10, Take-Two, the parent company of RockStar, the developer of Grand Theft Auto, announced that it would acquire social gaming company Zynga for a total of $12.7 billion.

Take-Two said it would buy all of Zynga's outstanding shares at $9.86 per share, a 64 percent premium to Zynga's closing price on Friday. The transaction is expected to close in the first quarter of fiscal 2023, subject to shareholder and regulatory approvals. After the acquisition is completed, a new global gaming giant will also be born.

Chinese gamers may not be familiar with Zynga, but the U.S.-based social gaming company has jumped to become one of the most successful gaming companies during the golden age of social networking. At the time, Facebook was its main battleground, and through this powerful social network, their game Farm Ville gained more than 10 million users in six weeks, and you can think of them as the American version of Happy Farm.

But the company that developed the American version of Happy Farm has gone through ups and downs since its inception. As social networking sites are no longer deified, Zynga has gradually declined, becoming the "front wave" of the mobile gaming era. They closed their Chinese offices in 2014 and experienced huge losses, but there are also some games that are popular in the United States. Zynga ranked fifth on appAnnie's list of mobile game publishers of the year 2021. The mobile game "New King" in front of it is Activision Blizzard, Supercell and Chinese mobile game companies.

Zynga is also often seen as the main beneficiary of the COVID-19 pandemic, as people have been more willing to play games in the past two years, but investors are unsure of Zynga's long-term performance and believe that the gaming boom brought by the epidemic may not last long, which has caused Zynga stock to fall nearly 38% in the past year.

The acquisition of Zynga could be even more important for Take-Two. As a console game giant, Take Two has big brands such as Grand Theft Auto, Red Dead Redemption, Civilization, NBA2K, etc., but its layout in mobile games is not smooth, in stark contrast, Activision Blizzard mobile game subsidiary King has become the most profitable department of the group.

So it's not hard to understand Take-Two's eagerness to acquire a mobile gaming company. Take-Two CEO Strauss Zelnick said the acquisition will bring together many of his top game brands and mobile platforms to create greater value. Players may expect to launch "free" mobile game versions of games such as Grand Theft Auto, Red Dead Redemption, and Civilization in the future.

Under the epidemic, games have also become one of the important ways of life, and there is a continuous boom in mergers and acquisitions and listings of related game companies. Last year, Microsoft acquired ZeniMax for $7.5 billion in cash, creating the largest game acquisition in Microsoft's history, winning well-known game brands such as The Elder Scrolls, Fallout, and Doom, and even surpassed Microsoft's $2.5 billion acquisition of Minecraft developer Mojang in 2014.

At the same time, Roblox, an online game platform that has been popular with children around the world during the epidemic, also went public last year, becoming another important IPO event in the game industry after game engine developer Unity. What has attracted more attention is that video games represented by Roblox and Unity have become the most suitable application scenarios for the current popular concept "metaverse".