Take-Two the parent company of the 2K sports arm, has announced a purchase of mobile giant, Zynga. The purchase was made as a full takeover, with Take-Two buying out outstanding stock in Zynga, resulting in the $12.7 billion price tag. The two companies will effectively combine, with Zynga becoming an owned subsidiary.
During an investor meeting, Take-Two CEO Strauss Zelnick that the company made the move in an effort to expand its offerings in the mobile space. Take-Two CEO Strauss Zelnick says the tie-up will save the companies $100 million and generate $500 million in net bookings, offering a major boost to the bottom line of the parent company. They’ve already been pulling in billions for recurring revenue from GTA Online, but a push into mobile gaming is a big moneyspinner.
Zelnick had this to say about the Zynga purchase: “We believe we have the best collection of console and PC intellectual property in the interactive entertainment business – and it’s basically nearly entirely un-exploited from mobile and free-to-play around the world.”
The move is also to put Take-Two into a position to offer apps and in an interesting turn, combat Apple’s ongoing privacy shenanigans on the AppStore. The biggest complaint from app developers with recent policy changes from Apple is a lack of transparency and pricing flexibility. The major legal kerfuffle between Epic and Apple was a direct result of Apple’s iron-fist style of running the app marketplace.
This move will give both Take-Two and Zynga the ability to use their own ad network to target gamers without having to rely on third-party providers. This could force Apple to try and alter policies to lure developers back to the fold, we will have to wait and see how they react. Some analysts suspect that the increasing centralization of gaming studios under conglomerates like Tencent and Electronic Arts is evidence of this already occurring.
The big downside to this happening in more gaming industry sectors is that users are left with little variance and choice. The AAA industry is already a cesspool of over-monetization and half-finished games. And that’s to say nothing of the rampant crunch culture and sexual harassment problems. A series of issues that Take-Two themselves have been woefully ignorant and dismissive of.
In the past, Zelnick has defended the idea that gamers should pay more for already expensive and overpriced AAA games, meaning more money in his pockets. And even more egregiously, defended loot boxes, and said that game developers would waste time trying to unionize.
Take-Two is already one of the largest and most profitable companies in the world, and they have a history of making some quite mediocre games, if their sports titles are any indication. Some users will likely be very suspicious of where this Zynga buyout ends up.
