Take-Two has officially taken a big step into the mobile games market by buying out the Spanish games maker Social Point.
The Barcelona-based developer and publisher of mid-level mobile games was apparently acquired for $250m. This figure includes $175m in cash and $75m which is in shares. Take-Two has always been a cash-rich business and has been open to making big acquisitions, with good IP, talent and technology being the prime factors in any of their buy-outs.
Take-Two’s Chief executive Strauss Zelnick has always made his skepticism of the mobile games market public due to its significantly high failure rate, and has also made the observation that only a tiny handful of such businesses have enjoyed any more than a single hit game on the platform.
However, Social Point seems to fit the bill as one of those successful developers, as it counts their Dragon City and Monster Legends amongst its biggest IP’s. Those two titles have been downloaded more than a staggering 180 million times and have been a consistent presence in the Top Grossing charts.
Zelnick said:
With the acquisition of Social Point, Take-Two has further diversified its business, expanded its portfolio of owned intellectual property, and significantly enhanced its position in the fast-growing free-to-play mobile gaming space,
The experienced team at Social Point shares our commitment to delighting consumers with high-quality entertainment, and we believe that Social Point’s deeply-engaging mobile offerings will be a perfect complement to our business. Social Point is one of the few mobile game developers that has a proven track record of growing revenues and delivering multiple hits, and we expect this growth to continue given the company’s exciting development pipeline. We are fortunate to have acquired Social Point in a transaction that is expected to be immediately accretive to net cash provided by operating activities, and to be accretive to net income per share, excluding transaction costs and amortization of intangible assets, in fiscal 2018.
