--- title: Why did Take-Two Interactive buy Zynga for $12.7B? - The Hustle description: The acquisition will give the combined company 1B+ users, and a strong position in the $180B+ gaming industry. image: https://hs-sbup.thehustle.co/hubfs/The%20Hustle%20News/Assets/Images/558230879-News-Brief_2022-01-12T031437.827Z.webp --- # Why did Take-Two Interactive buy Zynga for $12.7B? ![Trung T. Phan](https://thehustle.co/wp-content/uploads/2020/04/Image-from-iOS-300x300.jpg?width=48&height=48&name=Image-from-iOS-300x300.jpg) [Trung T. Phan](https://hs-sbup.thehustle.co/author/trung-t-phan) [Trung T. Phan Twitter profile ](https://twitter.com/TrungTPhan) Published: January 12, 2022 Updated: October 11, 2023 You will be hard-pressed to find more opposite games than “FarmVille” and “Grand Theft Auto” (GTA). ![Why did Take-Two Interactive buy Zynga for $12.7B?](https://hs-sbup.thehustle.co/hs-fs/hubfs/The%20Hustle%20News/Assets/Images/558230879-News-Brief_2022-01-12T031437.827Z.webp?width=595&height=400&name=558230879-News-Brief_2022-01-12T031437.827Z.webp) The former involves managing farm crops with your friends. The latter is a sandbox action game blamed for inspiring real-world [carjackings](https://chicago.suntimes.com/platform/amp/news/2021/2/22/22295471/grand-theft-auto-illinois-ban-violent-video-games-carjackings-evans-operation-safe-pump). #### **Both games will now be under one roof** According to [*The Wall Street Journal*](https://www.wsj.com/articles/videogame-maker-take-two-interactive-to-buy-zynga-in-12-7-billion-deal-11641818298?st=l7iorzf20bj4461&reflink=article_copyURL_share), Two-Take Interactive (the $17B game studio behind GTA) will buy Zynga (FarmVille maker) for $12.7B in a cash-stock deal. Why? Because — like the aforementioned games — opposites attract. Take-Two creates dominant PC and console franchises, including “Red Dead Redemption” and “NBA 2K.” Meanwhile, Zynga — which launched on Facebook in 2007 — is a huge mobile player, including the popular “Words With Friends.” #### **The merged company will have 1B+ users…** … and be well positioned to gain share in a gaming industry that notched **~$180B** in sales last year, per *WSJ*. There are 3 notable opportunities moving forward: - **Mobile:** Take-Two will have the team to port over its (extremely valuable) existing IP to smartphones - **Ads:** Unlike most game makers, Zynga has a growing advertising business (most game studios use 3rd parties) - **Web3 (ugh):** While Take-Two tried to avoid buzzwords, they acknowledged that both companies are exploring NFTs and the metaverse #### **Take-Two is paying…** … a ~64% premium on Zynga’s stock price. It may be an overpay, but the deal *is* on trend with recent gaming acquisitions: - **Microsoft** acquired “Doom” maker Bethesda Softworks ($7.5B) - **EA** shelled out for Glu Mobile ($2.4B), Playdemic ($1.4B), and Codemasters Group ($1.2B) Zynga founder and chairman Mark Pincus reflected on the deal by noting that his studio’s 1st Facebook game was [poker](https://twitter.com/markpinc/status/1480556924256997383?s=21). It’s fitting that Zynga’s story is now bookended by a huge bet from Take-Two. 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