As part of a cash-and-share deal announced Monday, Zynga will acquire Peak Games for $1.8 billion in the third quarter of 2020.
Peak Games is the name behind popular hyper-casual titles like Toon Blast and Toy Blast—both of which are set to join Zynga’s roster (Words With Friends and Farmville). Both titles have ranked among the App Store’s top 20 biggest earners for the last two years, reportedly grossing upwards of 200 million dollars each year.
The deal marks the largest acquisition in Zynga’s thirteen-year history and demonstrates the untapped potential of Turkey’s burgeoning startup scene (out of which Peak Games originates), but it isn’t the first time the two gaming giants have negotiated a deal.
In 2017, Zynga purchased a single division of Peak Games for $100 million. This 2017 acquisition afforded Zynga the rights to popular card-game titles Spades Plus and Gin Rummy Plus. Zynga has since recouped its spendings from this original deal and is now turning a profit, laying the groundwork for a complete buyout of Peak Games in the process.
Peak Games’ 100-person team operates out of Istanbul and will remain intact, which also means fans won’t notice much of a shift in terms of gameplay.
Zynga’s ability to make a purchase of this size was largely made possible by a recent climb in revenue as a result of increasing market interest caused by the COVID-19 pandemic—the ripples of which have been felt in every corner of the gaming industry. As the amount of time spent indoors and isolated from friends and families soars, people are turning to their phones to stay entertained. At the end of March, Zynga reported a 404% increase in year-over-year revenue. The company’s stock also reached a 2020 high of $9.99 USD following Monday’s announcement.
Zynga expects the acquisition to increase its number of Daily Active Users by nearly 60%. Toon Blast and Toy Blast collectively generate around 12 million daily users—which puts Zynga’s projections well within reason.
“This is a monumental partnership not only for Zynga and Peak but for the whole mobile gaming industry,” says Peak CEO Sidar Sachin.
