2022 opens with the wedding in the universe of videogames. Although it is still difficult to find the next generation consoles, due to the global semiconductor crisis, Take-Two Interactive, the creator of the popular game Grand Theft Auto, has decided to buy the developer Zynga and its FarmVille. Thus, a $ 12.7 billion giant will be born that will compete directly with three other big names, such as Activision Blizzard, Electronic Arts and Square Enix. But, above all, these are the most horizontally integrated developers, given that the range will now include all platforms, from PCs to smartphones, via Playstation, Xbox and Switch.
There is a new actor on the screens of gamers. Grand Theft Auto detects FarmVille at $ 9.86 per share, with a 64% premium over Friday’s close. However, the transaction, in shares and partly in cash, did not convince Wall Street where Take-Two stocks suffered sustained losses, up to 14 percent. Zynga, on the other hand, made a decisive advance of over 44% in a very heavy session for the American stock markets, weighed down by the decline in technology and frightened by a Federal Reserve that is expected to have the first crackdown on the super accommodative monetary policy put in place to deal with the pandemic emergency. In fact, according to Goldman Sachs, it could raise interest rates four times over the course of the year.
It will take days to understand the goodness of the operation, which however takes place at an unfavorable time for US technology equities. The Nasdaq index in fact closed 2021 growing less than the S&P 500 list for the first time since 2016. A phenomenon that highlights a scenario of high volatility, both on the pandemic evolution and on the Fed’s response to maxi liquidity. Under the agreement, the CEO of Take-Two Strauss Zelnick will lead the giant that will be born from the videogame marriage. Zynga’s number one, Frank Gibeau, will be responsible for Take-Two’s mobile operations and oversee the integration of the two companies.
In any case, the agreement comes in a period of turmoil in the video game sector, which have experienced a two-year golden period between pandemic and lockdown, pushing the giants of the sector to grow by capitalizing on the recent success. Last year alone, Microsoft bought Doom for $ 7.5 billion, in what was its largest acquisition in video games, while Electronic Arts first acquired Glu Mobile for 2.4 billion and then Playdemic for 1.4 billion. A consolidation, the one underway on Wall Street in particular and on a global scale in general, which sees growth on mobile devices, the fastest growing sector in the interactive entertainment industry, as its greatest propellant. Phenomenon destined to continue in the coming years, driven by the Millennial and Z generations.