Take-Two Interactive, creator of the Grand Theft Auto videogame franchise, is buying FarmVille developer Zynga for $12.7bn (£9.3bn). It’s the gaming sector’s largest-ever deal and will create a gaming behemoth values at almost $30bn, including several hit game series. These include Take-Two titles ‘Grand Theft Auto’, ‘Red Dead Redemption’, ‘Midnight Club’, ‘NBA 2K’ and ‘BioShock’, plus Zynga’s ‘FarmVille, ‘CSR Racing’, ‘Harry Potter: Puzzles & Spells’, ‘Words With Friends’, and ‘Zynga Poker’.

Zynga’s strength in mobile games was obviously a key factor in the deal.  Announcing the acquisition, the companies notes that the videogame sector has experienced rapid growth over the last few years and is now the largest vertical in the entertainment industry, according to IDG Consulting, and that, again according to IDG, mobile gaming is the fastest growing segment within the industry, with an estimated $136bn in gross bookings in 2021, and an expected compound annual growth rate of 8 per cent over the next three years. It is also expected that Zynga’s mobile developers will look to create mobile and cross-platform version of some of Take-Two’s portfolio of successful console and PC titles .

“We are thrilled to announce our transformative transaction with Zynga, which significantly diversifies our business and establishes our leadership position in mobile, the fastest growing segment of the interactive entertainment industry,” said Strauss Zelnick, Chairman and CEO of Take-Two. “This strategic combination brings together our best-in-class console and PC franchises, with a market-leading, diversified mobile publishing platform that has a rich history of innovation and creativity. Zynga also has a highly talented and deeply experienced team, and we look forward to welcoming them into the Take-Two family in the coming months. As we combine our complementary businesses and operate at a much larger scale, we believe that we will deliver significant value to both sets of stockholders, including $100m of annual cost synergies within the first two years post-closing and at least $500m of annual net bookings opportunities over time.”

Zynga CEO Frank Gibeau said that combining Zynga’s expertise in mobile and next-generation platforms with Take-Two’s best-in-class capabilities and intellectual property would enable the companies to further advance their mission to connect the world through games while achieving significant growth and synergies together. “I am proud of our team’s hard work to deliver a strong finish to 2021, with one of the best performances in Zynga’s history,” Gibeau said. “We are incredibly excited to have found a partner in Take-Two that shares our commitment to investing in our players, amplifying our creative culture, and generating more value for stockholders. With this transformative transaction, we begin a new journey which will allow us to create even better games, reach larger audiences and achieve significant growth as a leader in the next era of gaming.”