In brief
Take-Two Interactive, the publisher of Grand Theft Auto and other major game franchises, will acquire Zynga for $12.7 billion.
The mobile game maker recently announced plans to develop games that make use of blockchain networks and NFTs.
Mobile game publisher Zynga made its name on casual smashes like FarmVille and Words With Friends, but the company has recently pivoted towards a future in blockchain-driven NFT games. Today, the firm announced that it will be acquired by gaming giant Take-Two Interactive in a deal valued at $12.7 billion.
Take-Two Interactive is the parent company of gaming brands Rockstar Games and 2K Games, which collectively represent massive franchises like Grand Theft Auto, Red Dead Redemption, NBA 2K, and Borderlands. The cash-and-stock deal is expected to close by June 30, pending approval by both firms’ respective shareholders, as well as regulators.
Late last year, Zynga made a pair of announcements that signaled a shift towards blockchain-backed games powered by NFTs. An NFT acts like a deed of ownership to a unique digital item, and can represent things like digital land plots (as in The Sandbox) or colorful creatures that players can take into battle (like in Axie Infinity).
In November, Zynga hired Matt Wolf as its vice president of blockchain gaming, with plans to integrate NFTs into its existing IP, as well as create new crypto-fueled games from scratch. And then in December, the firm teamed with blockchain gaming infrastructure firm Forte to help bring those plans to life. Zynga has yet to announce its first blockchain-powered games.
Zynga and Take-Two Interactive have agreed to combine, creating a global leader in interactive entertainment with a portfolio of iconic franchises. https://t.co/yhF6LUCQmZ
— Zynga (@zynga) January 10, 2022
In a conference call today, Take-Two Interactive CEO Strauss Zelnick said that the acquisition of Zynga would allow the combined company to tackle new “Web3 opportunities.” He added that “this combination will allow us to address [them] much more effectively than either company can do on its own.”
Zynga CEO Frank Gibeau later spoke further about the company’s view on NFT projects.
“In terms of NFTs, it’s very early days,” said Gibeau. “It’s a process that I think conceptually we have a lot of faith and belief in—the idea that players will play-to-earn or play-to-own is a very compelling idea that we think will have legs as the industry develops.”
“As I said before, it’s early days,” the Zynga CEO added, “so we’re really experimenting, learning, and trying to understand what the market will look like and how it will develop.”
Zelnick previously dismissed the potential staying power of cryptocurrency and the NFT-powered metaverse. Last May, during an earnings call, he said, “If you take metaverse, SPAC, and cryptocurrency, put them all together, in five years will any of this matter? I’m not sure that it will.”
Traditional video game companies have shown more interest in the crypto space in recent months. Ubisoft launched Tezos-powered in-game items for Ghost Recon: Breakpoint in December, while Square Enix confirmed plans to create NFT-powered games and Electronic Arts CEO Andrew Wilson called NFTs “an important part of the future of our industry.”
Such moves have also generated backlash from video game players, though. Ubisoft faced resistance to its NFT platform launch, but opted to continue on with its long-gestating plans.
However, Developer GSC Game World canceled plans to launch NFTs for its upcoming game, S.T.A.L.K.E.R. 2: Heart of Chernobyl after social media pushback, while gaming-centric chat app Discord similarly halted plans to integrate crypto wallets following user complaints.
Source: https://decrypt.co/90103/grand-theft-auto-maker-take-two-zynga-web3-nfts
