- Video game company Take-Two Interactive has agreed to buy Zynga for US11.04 billion, making it the largest deal in the gaming industry
- The deal will create a gaming powerhouse with a market cap of nearly $30 billion and will cover console, PC and mobile devices
- However, if other companies want to bid for Zynga, they will need to put in a higher offer by February 24
- The mobile game marketing is likely to reach US$116.4 billion by 2024
The largest deal in game making history has just been made with “Grand Theft Auto” game maker, Take-Two Interactive, agreeing to buy Zynga for US$11.04 billion (A$15.35 billion).
The deal will create a gaming powerhouse with a market cap of nearly US$30 billion (A$41.7 billion) and will cover console, PC and mobile devices.
With this purchase, Take-Two will own popular mobile games such as FarmVille and Words With Friends.
The two parties have been having talks off and on in the past year, but the latest negotiations came late last year when Zynga dropped more than a third of its market value, the biggest drop in major game publishers.
This drop was due to falling engagement levels and Apple’s move to allow iPhone users to opt-out of being tracked by advertisers.
Despite this, the mobile game market is likely to reach US$116.4 billion (A$161.8 billion) by 2024, according to data firm Newzoo.
The deal is expected to close in the first half of this year but there is an opportunity for other companies to put in a bid for Zynga. These bids will need to be made by February 24.
“It’s a bombshell deal … Zynga was on the list of potential M&A transactions for a long time in the video game business,” said Serkan Toto, CEO of videogame consulting firm Kantan Games.
“Take-Two is looking at the industry map and says ‘we have basically nothing here.’ So, a lot of people have been have been expecting Take-Two to make a big deal in mobile to close the gap with competitors like Electronic Arts for example,” he told Reuters.