Grand Theft Auto Maker Take-Two Acquires Zynga

(Image credit: Zynga)

NEW YORK & SAN FRANCISCO—Take-Two Interactive, which makes the popular Grand Theft Auto game, has announced that it is acquiring Zynga, the maker of FarmVille, for about $12.7 billion in a cash and stock transaction. 

The combination will create a powerhouse in the gaming industry that could have about $7 billion in combined net bookings in 2022 (opens in new tab). The deal comes in the wake of a number of other deals for gaming studios (opens in new tab) by such players as Netflix. 

“We are thrilled to announce our transformative transaction with Zynga, which significantly diversifies our business and establishes our leadership position in mobile, the fastest growing segment of the interactive entertainment industry,” said Strauss Zelnick, chairman and CEO of Take-Two. “This strategic combination brings together our best-in-class console and PC franchises, with a market-leading, diversified mobile publishing platform that has a rich history of innovation and creativity. Zynga also has a highly talented and deeply experienced team, and we look forward to welcoming them into the Take-Two family in the coming months. As we combine our complementary businesses and operate at a much larger scale, we believe that we will deliver significant value to both sets of stockholders, including $100 million of annual cost synergies within the first two years post-closing and at least $500 million of annual Net Bookings opportunities over time.”

“Combining Zynga’s expertise in mobile and next-generation platforms with Take-Two’s best-in-class capabilities and intellectual property will enable us to further advance our mission to connect the world through games while achieving significant growth and synergies together,” said Frank Gibeau, CEO of Zynga. “I am proud of our team’s hard work to deliver a strong finish to 2021, with one of the best performances in Zynga’s history. We are incredibly excited to have found a partner in Take-Two that shares our commitment to investing in our players, amplifying our creative culture, and generating more value for stockholders. With this transformative transaction, we begin a new journey which will allow us to create even better games, reach larger audiences and achieve significant growth as a leader in the next era of gaming.”

The companies noted that mobile gaming is the fastest growing segment within the industry, with an estimated $136 billion in gross bookings in 2021, and that the transaction is expected to establish Take-Two as a leader in mobile gaming, with mobile expected to comprise over 50% of its net bookings in fiscal year 2023 (as compared to an estimated 12% in fiscal year 2022). 

At the close of the transaction, Strauss Zelnick will continue to serve as chairman and CEO, and the management team of Take-Two will continue to lead the combined company. Frank Gibeau and Zynga's president of Publishing, Bernard Kim, will drive the strategic direction for Take-Two's mobile efforts and will oversee the integration, and day-to-day operations of the combined Zynga and T2 Mobile Games business, which will operate under the Zynga brand as its own label within the company. 

Additionally, Take-Two will expand its Board of Directors to 10 members upon the closing of the transaction to add two members from Zynga’s Board of Directors.

The transaction is expected to be completed during the first quarter of Take-Two’s fiscal year 2023, ending June 30, 2022.

George Winslow is the senior content producer for TV Tech. He has written about the television, media and technology industries for nearly 30 years for such publications as Broadcasting & Cable, Multichannel News and TV Tech. Over the years, he has edited a number of magazines, including Multichannel News International and World Screen, and moderated panels at such major industry events as NAB and MIP TV. He has published two books and dozens of encyclopedia articles on such subjects as the media, New York City history and economics.