Zynga Invests $700M to Strengthen Mobile Gaming Portfolio

American largest game software firm Zynga revealed that it would not be going to buy a majority stake in Finland’s Small Giant Games, maker of the popular Android game Empires & Puzzles, for roughly $700 Million in a move to strengthen its portfolio of mobile gaming.

It is one of the largest deal to date for the Zynga, CEO of Gibeau said in an interview, with the toppings of its $527 Million acquisition of the UK developer Natural Motion in the year 2014. Zynga which is most popularly known for the Facebook game FarmVille also raised its fourth-quarter revenue. Its shares rose to 1.67 percent in after trading to $3.65.

Zynga sees potential in bringing with the smartphone role-playing game Empires & Puzzles to the countries in Asia where the games of the type are popular and famous, with the Gibeau citing China, Japan, and South Korea as the potential markets. He revealed that the 18th-month-old game was profitable, which makes money from in-game purchases plus a small amount of advertising. The acquisition is also expected to add to Zynga earning in the fiscal year 2019.

The cash and stock deal for the small Giant, which is going to be closed by the 1st of January, follows the Zynga deal last year to buy a unit of Peak Games, homes to games such as the “Gin Rummy Plus,” “Spades Plus” for around $100 Million.

Zynga revealed that it would buy 80 percent of privately held Small Giant now for $560 Million and the remaining 20 percent over the next three years which is totally based on the profit goals. The implied value of the deal is going to be $700 Million.

Small giants have also raised another $50 Million in the venture capital funding and are backed by the EQT Ventures. It also now sees that the revenue of $243 million, up from an earlier expectation of $235 million, on the other hand, its net loss forecast was lowered to $1.5 million from an earlier $2 million.

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