On May 23rd, following shareholder approval a few days earlier, Grand Theft Auto publisher Take-Two Interactive officially closed its deal to purchase leading mobile games company Zynga for approximately $12.7 billion. Take-Two CEO Strauss Zelnick labeled the deal a “pivotal step” in the publisher’s quest to offer its audience a more robust portfolio of mobile games while pursuing the “fastest-growing segment in interactive entertainment.”
When combining Take-Two IP like GTA, Red Dead Redemption, Civilization, and NBA 2K with Zynga franchises like CSR Racing, Words with Friends, and Empires & Puzzles, there’s potential to create “one of the largest and most diversified mobile game publishers in the industry,” as the companies described it.
The deal isn’t just about combining complementary portfolios, however. Zynga’s expertise in free-to-play game publishing and marketing can now be leveraged across every Take-Two division, which will be especially important as the firm seeks to grow globally.
Zelnick previously explained how 80% of Take-Two’s annual revenues have been driven by the US and Western Europe. Zynga’s integration could go a long way towards bolstering Take-Two’s penetration in global markets. “There is an enormous untapped opportunity in markets like Russia, China and the rest of Asia, India, Africa, Latin America… and we think free-to-play is the mechanic that will appeal greatly in those markets,” Zelnick noted in January.
Data from Interpret’s New Media Measure: Global Profiles™ back’s up Zelnick’s assertion, as Indonesia, China, India, Brazil, and other countries all have a sizable mobile gaming audience. More than 50% of the population in numerous countries plays mobile games for at least one hour per week, and that figure approaches 60% in Indonesia and China. The latter’s crackdown on unapproved games from foreign companies, however, will make the Chinese market incredibly tough to crack for some time.
Even without a presence in China, developing markets could lead to ample mobile gaming growth for Take-Two. In addition, mobile gaming isn’t slowing down domestically. Interpret previously reported that mobile gaming’s growth from 2019 to 2021 represented almost half of the overall 4+ hour increase in weekly entertainment time spent by US consumers.
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