Before pursuing Activision Blizzard, Microsoft attempted to acquire Zynga, one of the world’s leading mobile game makers. This disclosure came on the second day of the preliminary injunction hearing on the FTC’s bid to halt Microsoft’s acquisition of Activision Blizzard.
Zynga, which was founded in 2007, was one of the top 10 mobile game developers in the world in 2021, with $2.8 billion in revenue. Shortly after, Take-Two Interactive, the publisher of Grand Theft Auto, paid $12.7 billion for Zynga.
The cash-and-stock transaction, which was completed in May 2022, remains the largest acquisition in gaming history, but Microsoft’s Activision Blizzard merger would exceed it 5.5 times over if authorized.
During a June 23 hearing in front of a federal court in San Francisco, Xbox Head Phil Spencer claimed that Microsoft tried to buy Zynga before the California-based business was eventually acquired by Take-Two. Spencer stated under oath that the negotiations with Zynga took “quite a bit of time.”
While he didn’t elaborate, Microsoft’s public court filings from the day before included an email from Xbox CFO Tim Stuart to Senior Finance Director Jamie Lawver with the subject line “Zynga strategy approval.” The email’s contents are not disclosed in the case’s public docket, but the fact that it is dated August 19, 2021, suggests that Microsoft had been in talks to acquire Zynga for months before Take-Two decided to do so in January 2022.
Although the acquisition’s timetable suggests that Take-Two beat Microsoft to the punch, Spencer claims that Microsoft dropped the project after determining it needed something “even bigger than Zynga” to jumpstart its journey into mobile gaming. According to Spencer’s testimony, it then targeted Activision Blizzard, the owner of Candy Crush developer King.
This isn’t the first time the company’s leadership has stated that the ABK agreement is mostly motivated by mobile, as Microsoft has been saying for nearly a year that Activision Blizzard games aren’t must-have titles.
