Zynga snaps up developer Peak for $1.8B as mobile gaming surges

Zynga snaps up developer Peak for $1.8B as mobile gaming surges

10
0
SHARE


Brief:

  • Zynga entered a definitive agreement to acquire Peak, the Istanbul-based developer of mobile puzzle games founded in 2010, according to a news release. The deal valued at $1.8 billion — $900 million in cash, $900 million in Zynga common stock — is the largest in Zynga’s history, Bloomberg reported ahead of the announcement Monday.
  • With the acquisition, which is expected to close in Q3 2020, Zynga nets Peak’s 100-person team as well as its two massive titles, “Toon Blast” and “Toy Blast.” The games, respectively, have consistently landed in the top 10 and top 20 highest-grossing iPhone games over the past two years, the release said.
  • Together, “Toon Blast” and “Toy Blast” average 12 million daily active users (DAUs) around the globe. Putting them under the Zynga umbrella is expected to grow the company’s mobile DAUs by more than 60%, along with expanding reach in international markets.

Insight:

Zynga’s acquisition of Peak is one of the more significant pieces of dealmaking that’s emerged as the mobile gaming market consolidates, while usage surges among consumers stuck inside due to the coronavirus. The $1.8 billion price tag is considerably higher than previous deals by the acquisitive Zynga, including its purchase of Finnish developer Small Giant Games for $560 million two years ago, per Bloomberg.

Like many mobile game developers, Peak runs in-game ads to drive revenue, and titles like “Toon Blast” have previously led ad impressions among in-game advertisers on Android. Zynga names a number of ad partners, including AdColony, AppLovin and Salesforce, that help it personalize in-game advertising for free-to-play games, and combining with Peak could make it a bigger category powerhouse.

Despite the economic and operational pressures of the pandemic, other mobile gaming firms have been pursuing acquisitions. Last month, AppLovin acquired Machine Zone, the studio known for developing titles like “Final Fantasy XV: A New Empire” and “Mobile Strike,” for an undisclosed sum. Combined, the companies will have almost 800 employees and expect yearly sales of $1.5 billion. AppLovin’s other recent gaming investments include PeopleFun, Belka Games, Clipwire Games, Firecraft Studios and Geewa.

For Zynga, acquiring Peak allows the company to tap into the buzzy market for casual puzzle-based games. The Turkish developer has been an innovator in the space, popularizing a “collapse” mechanic for the matching puzzle subgenre, according to the announcement. Peak will additionally help Zynga scale its live services — the types of continual game updates that keep players engaged long-term — and drive margin expansion, while opening new franchise-building opportunities.

“With the addition of Toon Blast and Toy Blast, we are expanding our live services portfolio to eight forever franchises, meaningfully increasing our global audience base and adding to our exciting new game pipeline,” Zynga CEO Frank Gibeau said in a press statement. Gibeau, who took the reins as chief executive in 2016, has led Zynga’s acquisition strategy, per Bloomberg.

Adding “Toon Blast” and “Toy Blast” to its lineup will also help Zynga capitalize on the current pandemic gaming boom. Weekly mobile gaming downloads have set new records, spiking to as high as 1.2 billion during the public health crisis, per App Annie data cited in The Hollywood Reporter. Downloads in April were up 30% over January, App Annie found, and shot up 35% in March as shelter-in-place orders were enacted in the U.S.

But gaming was an area for mobile marketers to watch well before the pandemic. Consumer spending on mobile games in the Apple App Store and the Google Play store last year rose 13% to $61.7 billion worldwide, accounting for 74% of all in-app spending, according to a January report from Sensor Tower.


LEAVE A REPLY