Today it was announced that Take-Two has acquired Farmville developer Zynga. The deal is thought to be in the region of $12.7 billion. This deal is a combined cash and stock deal, meaning not all of that valuation is cash alone. Furthermore, Zynga now has 45 days to seek a better deal during which the acquisition could still fall through.
Zynga specializes in mobile development and that seems to be a key focus point for both companies. In its statement, Take-Two says that this acquisition opens up a “clear path,” to move console and PC games to mobile. Given this, it looks as though Take-Two will primarily use the Farmville developer as a mobile porting studio.
It’s not just Take-Two that will benefit from Zynga being acquired. Zynga’s CEO Frank Gibeau believes this deal will allow his company to “further advance our mission to connect the world through games while achieving significant growth.”
That may just be typical PR talk but Gibeau does have a point. Take-Two’s reach is huge with it owning several of the most successful video game franchises ever made. Its impressive catalog includes the likes of Grand Theft Auto, Red Dead Redemption, and Borderlands.
Equally, Take-Two believes that it can provide a bridge for Zynga to fulfill its “cross-play ambitions.” That means expanding the developer’s reach to more than just mobile gamers. We may see Zynga begin to develop its first console and PC games sometime in the future.
There’s no doubt that Take-Two is confident in the deal as the $9.861 spent per share is steep. Those rates represent a 64% premium on Zynga’s share price from last week. It’s not unusual for big companies to overpay to secure long-term gains but 64% is significant. At the very least, Zynga knows that it is being valued highly and big expectations are to come.
By now I’d imagine just about everyone is familiar with FarmVille. The popular Facebook game rose to prominence in the early 2010s. However, 11 years after its debut FarmVille is closing down. As confirmed by developer Zynga, players will only be able to access it until December 31. At the turn of the new year, it will be closed down once and for all.
Even though FarmVille itself is set to close down at the end of the year, transactions will be cut off even earlier. Active players will only be able to make in-app purchases until November 17. Given the game’s core business model is based around this, it will effectively become unplayable once they are removed.
The end of FarmVille
This is less of a business decision and more a case of Zynga’s hand being forced. Adobe recently announced that it isn’t providing support for Adobe Flash Player for any web browser going forward.
Unfortunately for FarmVille, no Flash Player means no game client. As typical of many online games of the time, FarmVille is a flash game. Once official support for Adobe Flash Player is removed, it simply won’t run in a browser anymore. Without a complete overhaul of the farming simulation’s code, it doesn’t have a future.
All things considered; longtime fans probably shouldn’t be too disheartened. The original game was already very outdated and, if anything, it’s surprising that it managed to last this long. Zynga has already released both a FarmVille2 and 3 on mobile. The original hadn’t received a major update in years.
If you’re an active FarmVille player be sure to use up any remaining credits before the game’s end. There will be no refund or transfers available to move your in-game currency across to either sequel. Finally, keep an eye out for FarmVille’s final events. Zynga promises it made them “even more enjoyable,” than anything seen up to now.