Take-Two CEO Strauss Zelnick on his $12.7 billion Zynga bid


The shock announcement Monday morning that Take-Two Interactive Software program was buying Zynga shocked individuals—not simply due to its surprising nature, however due to the excessive premium the writer of Grand Theft Auto put on the corporate behind Phrases With Buddies.

With a suggestion that represented a 64% premium to Zynga’s closing value on Friday, it will be the costliest takeover within the online game business’s historical past—50% greater than Microsoft paid for ZeniMax and practically six instances what Fb paid for Oculus. Buyers balked, with Take-Two inventory falling 13%, however CEO Strauss Zelnick says the value was a good one—and that the merger is sensible.

“It actually comes right down to the expectations round their internet bookings and money stream,” he informed Quick Firm. “I’m not going to be essential of anybody else’s offers, however on that foundation, this compares exceedingly favorably.”

Financials apart, bringing Zynga in-house will signify an enormous change in the way in which Take-Two does enterprise. The corporate expects 50% of its mixed fiscal 2023 internet bookings to return from cell video games, a tectonic shift.


A few of that can come organically by way of Zynga’s present titles, however Take-Two is keen to capitalize on its catalog of mental property, which incorporates Grand Theft Auto, the NBA 2K franchise, Purple Useless Redemption, Bioshock, and Borderlands, a lot of which haven’t had cell variations. GTA On-line, the corporate’s money cow, appears the plain candidate, however Zelnick wasn’t prepared to vow that but.

“We’ve nice mental properties,” he says. “We’ve completed little or no in cell. I don’t assume the expression in cell is an identical to the expression in console. I believe it’s a distinct expertise and probably a distinct client and completely different geography. For instance, we might carry a module to cell, not essentially the entire recreation.”

Zelnick wouldn’t specify which titles would possibly get the cell therapy. “I’m clearly not committing within the least to what any one in every of our labels will do,” he says. “I’m talking very typically about bringing core Take-Two mental property to cell. I believe it’s distinctively potential that we’ll create joint ventures between our Zynga label and our different labels within the Take-Two household.”

i 1 take two interactive ceo zynga takeoverTake-Two Interactive Software program CEO Straus Zelnick [Photo: Patrick T. Fallon/Bloomberg via Getty Images]The corporate hopes to leverage Zynga’s expertise in free-to-play video games to develop its enterprise into new territories, together with these within the Center East, Asia, and Africa, says Zelnick. 

And whereas the main target for a lot of has been on bringing Take-Two video games to cell, the bridge might go each methods. Zelnick says Zynga is “very targeted” on cross-platform alternatives, and it’s actually potential that a few of that firm’s largest video games might discover their option to console and PC.

Does that open the door for Zynga’s in-game promoting in Take-Two titles? That’s much less seemingly.


“We like to not be rule-based, but it surely’s arduous to see that occuring,” says Zelnick.

Zynga’s historical past as a public firm has been a rocky one. After going public in 2011, there was speak inside a 12 months that it would go non-public once more. Between mid-2021 and October 2018, the inventory by no means topped $4.50 per share. The 2016 set up of former EA govt Frank Gibeau as CEO marked a turning level, although. And by mid-pandemic, shares had been as excessive as $12.

The corporate leaders have recognized one another for a very long time, and not too long ago, Take-Two approached Zynga concerning the acquisition.

“When Frank took over the corporate and altered its path and altered its tradition, it grew to become of curiosity,” says Zelnick. “We clearly noticed the nice work Frank and his crew did to construct the corporate, each organically and thru acquisitions. That’s when it grew to become interesting. We’ve been lucky to get to know Frank over plenty of years, however the discussions solely started with this example comparatively not too long ago.”

The bigger query now could be whether or not Take-Two is the one firm prepared to pay large for Zynga. A forty five-day go-shop provision within the settlement offers different bidders loads of time to make a rival bid, and neither firm would remark on whether or not different bidders would possibly emerge or have been a part of the method to date. (Tencent and Embracer Group lead the pack of potential rivals.)

In his dialog with Quick Firm, although, Zelnick acknowledged the likelihood—and appeared able to struggle if that happens.

“[It] actually might occur,” he says. “It’s a part of the panorama of offers like these. We’ll handle the state of affairs if and when it happens.”