Online games, especially mobile games, are consolidating their place as the foundation that keeps the economy connected, well-connected, in all avenues of digital interaction, especially in leisure-related activities.
To that end, Take-Two Interactive announced in a Monday, January 10 press release that it would acquire mobile game company Zynga for $ 12.7 billion.
You may remember Zynga as the company behind the once hugely popular Farmville titles that were a mainstay of Facebook. In recent years, the company has grown with Zynga Poker, Words with Friends and titles related to Harry Potter.
In the announcement detailing the deal, the companies said the combined entity will benefit from “development and publication synergies, unlock new revenue streams and reach new audiences around the world.”
In terms of numbers, Take-Two / Zynga will have $ 6.1 billion in net bookings and is targeting a compound annual growth rate (CAGR) of 14% for net bookings. Take-Two said the addition of Zynga’s mobile titles will increase recurring consumer spending.
In presentation materials on Monday, the three-year CAGR of the world’s mobile game industry was estimated at 8%, with gross bookings reaching about $ 136 billion last year.
Zynga’s installed base, according to this presentation, is tied to 183 million monthly active mobile users.
As for the connected economy part of the equation, Zynga generates 10 billion monthly ad impressions, with 4 billion installs of Zynga games to date. Take-Two said the acquisition announced on Monday offered a “clear path” for bringing Take-Two’s console / PC games to mobile conduits, and for using Zynga’s scale and the Chartboost advertising platform to, according to the merger presentation, “acquire more new users efficiently and optimize mobile ad inventory.
The advertising component
Part of Zynga’s business model is personalized advertising. The company explains on its website that it displays advertising in its games to “help us provide a free gaming experience.” Zynga and its partners collect information about users and their devices (user IDs and addresses, games played and demographic details) and use this information to create personalized, targeted advertisements.
We hold that contextualized advertising is an integral part of the connected economy, as it follows and evolves with users as they seamlessly transition to a number of day-to-day activities conducted on mobile devices.
Generally speaking, by developing and expanding in-game advertising, players are incentivized to make impulse purchases (or at least think about a product or service for a subsequent transaction). There are also advergames, which are directly related games based on certain brands or products.
In the age of the pandemic, it’s no exaggeration to say that mobile devices (and yes, games) – smartphones, in particular – have become a constant presence by our side. We’re using more devices than ever, and as a result, businesses have more ways to engage with us.
As an example, PYMNTS research shows that mainstream consumers, almost half of recently surveyed users, on average owned 6.8 devices, and high-tech consumers (9% of total respondents at the end of last year) have an average of 12 devices.
Read more: High-tech consumers own an average of 12 devices