Exciting Osterus Data Reveals How Game Companies Spot Their Next Major Investment
The Mergers and Acquisitions market is filled to the brim with exciting shifts, sudden turns and unpredictable deals. M&A trends usually indicate certain patterns, albeit it’s usually a challenge to discern exactly what’s going to happen further down the road.
M&A executives are sometimes willing to send clear messages regarding deal-making activities. So, for quite some time we knew that mergers like Microsoft and Activision Blizzars, or Take-Two and Zynga, will indeed take place (we’ll get into the details behind these deals below) But what were the core market insights that led these giants to make such moves? Is it even possible to know that for sure? With Osterus software it is indeed possible and then some.
Take-Two Interactive and Zynga — History and M&A Deal
Earlier this year (in January, 2022 to be exact), Take-Two Interactive uncovered its strategy to buy mobile games company, Zynga. The deal was valued at $9.86 per share ($3.50 in cash and the remaining $6.36 in shares of Take-Two common stock). It must be noted that, officially, Zynga’s enterprise value comes out to $12.7 billion. We also know for a fact that the deal was completed on May 23, 2022. The objective of this major purchase was for Zynga to provide “substantial revenue opportunities,” as confirmed by Strauss Zelnick , Chairman and CEO of Take-Two. Other reasons were also cited. Take-Two stated that this particular merger was also aimed at cutting costs. As the deal goes through, the company projects it’s going to save approximately $100 million annually after two years.
From a gaming perspective, this acquisition means that Take-Two is expanding its already huge library of well-known video game franchises, including Red Dead Redemption, Midnight Club, NBA 2K, BioShock, Borderlands, Civilization, Mafia, and others. Now, the company intends to expand its catalog of mobile games. On the other hand, Zynga’s IP may now extend its own portfolio with other formats and gaming platforms.
While Zynga made a powerful impact on the market, in the past few years prior to this deal. In addition, they have suffered a number of ups and downs, ranging from stock soars, to huge price drops. In such a fluctuating climate, they managed to gain lots of traction via social gaming. In the wake of this turbulence, a lot of Zynga’s business decisions revolved around completing a number of acquisitions of their own. The primary focus was to pinpoint the latest popular game franchises, so they can compensate for those that lost popularity. For instance, back in 2020, they acquired Turkey’s Peak Games (responsible for games like Blast and Toy Blast) for a staggering $1.8 billion.
What Are the Hiring Practices of Take-Two and Zynga
As soon as the merger was carried out, we took the time to utilize Osterus software to get into the whole crux of the matter. Now, it goes without saying that such gigantic mergers and acquisitions that happen within the video game industry are mostly centered around financial goals, profit projections, and various moves that are part of a complex business strategy.
At the heart of it all, lies a gem many companies and investors tend to overlook. Behind all of these companies lurks one of the largest workforces on the planet. While segmented (distributed across diverse video game publishers and development studios), this workforce is a great source of professional experience when it comes to video game creation. This is no doubt one of the parameters colossal companies are taking into account when making these earth-shattering decisions.
So, without further ado, let’s dive into the data. The latest Osterus intelligence shows exactly how many software developers at Take-Two have previously been employed at companies such as Electronic Arts, Microsoft, KPMG, Sony and others.
Zynga appears to stick to a similar pool of employees. Clearly, as Ostures data tells us, a majority of Zynga’s software developers also come from Electronic Arts, and a decent percentage from Microsoft.
Another interesting point is that a majority of employees — specifically software developers — have come from Disney, but more importantly, the biggest segment comes from Electronic Arts. So, what connects the dots? What can we deduce from these workforce analytics? Before we get to that, let’s dive into another story from the M&A video game scene.
Why Are Disney, Apple & Amazon Eying EA?
Apart from the numerous M&A deals that have taken place in the first half of 2022, there is one other potential major merger on the horizon. Some of the biggest companies out there are apparently circling around publisher EA, both in entertainment and in tech. It has been reported that Apple, Disney and Amazon are all locked in the race to grab a huge slice of EA.
Meanwhile, Sony and Microsoft, the biggest two rivals on the current video game front, have been snatching up their fair share of independent video game companies, both small and truly huge. This begs the question: why is EA next in line? Well, at this point, there aren’t many studios left that operate independently on the market and the biggest corporations on the playing field might be looking to clean up what’s left.
But it appears there’s more to it…
EA as a Thread That Ties Gaming Companies Together
As it turns out, Electronic Arts appears to be an endless source for talented software developers, video game artists, and other vital professions in the gaming business. We have seen the workforce through the Osterus employment view for Take-Two Interactive and Zynga. Taking a step back briefly, we can utilize previously extracted data to bring brand new insight.
Defining Major Gaming M&A Deals Through Workforce Quality
The complexity of certainly M&A isn’t something for everyone to decipher. However, some facts become clearer after using Osterus to determine exactly what level of experience is hidden within the ranks of large gaming companies. Recently, we have analyzed the Microsoft and Activision Blizzard deal, which ended up being one of a colossal and historic merger. The data clearly showed hiring practices from both companies. Mind you, when we go back to the data now, and look at it with fresh eyes, we cannot help but notice that even more video game companies hire software developers (and a huge percentage in other positions) from Electronic Arts — in this case, Activision Blizzard; have a look below:
That’s a key market insight, pointing towards Electronic Arts, which is clearly becoming a beacon for accumulating huge talent in the world of video game development.
Looking at Microsoft though, we can plainly see that while there is less tendency to hire from EA. The data below leads us to believe that while Amazon, Apple, and Disney are determined to get EA, Microsoft, on the other hand, the IT giant MS still prefers to recruit its software developers from competitors such as Amazon and Google. Take a peek:
How the Biggest Gaming Companies Acquire Talent
The M&A market is sizzling at the moment.
With current M&A trends, and such a dynamic, ever-changing business scene, investors and M&A professionals would benefit greatly from using Osterus software to predict certain obstacles, successfully maneuver through regulatory tightening, as well as the challenges of the due-diligence process; and, more importantly, to isolate investment opportunities and get a clear picture of key M&A activity.
All of these benefits allow you to:
- Anticipate major business moves, and adapt to the ever-changing M&A climate
- Find investment potential through unique insights on human capital
- Discover hidden data points on competitive companies within your playing field
What’s more, our software covers sophisticated data from all industries, so your business can look into the workforce and human capital of, say, corporate and PE firms, to VCs and private banks, airline companies, the latest players in crypto, and more.
Reach out to us and schedule a demo with our experts to explore what the Osterus software is capable of.