Grand Theft Auto gulp Farmville on. For 12.7 billion dollars (converted about 11.2 million euros), computer and console game publisher Take-Two, which includes GTA has released online games giant Zynga. Zynga is best known for Farmville, a farming game where the player has to plow land, grow crops and harvest. Between 2009 and 2011, this was the most played game on Facebook.
Zynga’s games can be played for free online or via an app. Take-Two releases games that the user can download onto the computer for a fee. The most famous of these is Grand Theft Auto, in which the player races through large cities in stolen cars and has to carry out criminal assignments. Take-Two’s other big hit is Red Dead Redemption, about gangs in the American Wild West.
With the acquisition of Zynga, Take-Two is taking a big step in a new segment of the games industry: free games that are mainly played on the mobile phone. Games people do, as Zynga CEO Frank Gibeau puts it, “while waiting for the train.” This will make Take-Two one of the leaders in a market segment that Take-Two CEO Strauss Zelnick says is “the fastest growing”, with “estimated revenues of $136 billion in 2021” and “annual growth of 8 percent in the next three years”.
Buy extras
Platforms for free, online games mainly make money from advertising revenue and from users who buy perks to be the best in a league. FarmvillePlayers can dutifully sow and harvest plants every day, give gifts to friends in the hopes of getting them back, and eventually expand their own farm. Another route: pulling a credit card to buy extra land, tractors and cows with real money.
According to the Guinness Book of World Records holds Farmville the record for the sale of the most expensive virtual farm animal, a so-called Celestial Pegacorn. This unicorn with wings cost five million Farmville coins in 2013, about 3,800 euros. A twelve-year-old British boy had converted more than 1,100 euros on his mother’s credit card in 2010. accrued in debt at the game.
In the meantime, Farmville can only be downloaded and played via app stores on smartphones. Even after the original Farmville was taken off Facebook in 2020, Zynga continued to grow through the development of new games. In 2016, the company had sales of more than $741 million, and in 2020 that was nearly $2 billion. The online games industry has benefited from the lockdowns that kept many at home at the start of the corona pandemic: 2020 was a record year with a revenue increase of 52 percent compared to 2019.
The game industry earned 62 percent more from advertising sales in the first corona year. That was a particularly beneficial trend for Zynga, as the company had just acquired Chartboost, which specializes in advertising sales and gaming. Topman Gibeau expected this to gain a better understanding of the needs of advertisers and users.
stock market decline
After the summer, when lockdowns were lifted virtually everywhere, Zynga experienced a rapid decline in its user base. That was also due to the stricter privacy conditions Apple imposed for admission to its app store, CEO Gibeau said. against CNBC. The stock price plummeted by more than 12 percent, but by the end of 2021 Zynga had recovered.
The $12.7 billion that Take-Two will deposit for Zynga will be paid in stock and cash, the acquiring company writes. It is expected to save about $100 million annually from merging with Zynga. Nevertheless, investors initially seemed unenthusiastic about the acquisition. While Zynga’s share price rose 47 percent on Monday, Take-Two’s fell more than 14 percent, the company’s biggest stock market blow since 2009.
It is not yet clear what will happen to the Zynga staff (2,245 employees by the end of 2020).
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