A major acquisition is bringing together two of the largest game makers in the U.S.

Take-Two Interactive will buy mobile game maker Zynga in a deal valuing the company at an implied enterprise value of $12.7 billion. The price represents a 64% premium on Zynga’s closing stock price on Friday.

The move gives Take-Two, maker of the “Grand Theft Auto,” “NBA 2K,” and “Red Dead Redemption” franchises, a major player in mobile gaming. 

Zynga made its name as a leader in Facebook games with “Farmville,” then turned its attention to mobile with titles like “CSR Racing” and “Empires & Puzzles.”

• The companies combined for $6.1 billion in net bookings for the 12 months preceding Sept. 30, 2021.
• By combining forces, the companies expect to save around $100 million annually over the next two years and potentially create around $500 million in annual net bookings.
• The deal will be funded with $2.7 billion in financing from JPMorgan Chase, Take-Two’s balance sheet, and a new debt issuance.

Mobile on the Move

In September, market researcher Newzoo estimated that mobile gaming would grow 4.4% in 2021 to $90.7 billion – more than half of the $175.8 billion gaming market. 

The analyst predicted mobile gaming to see an 11.2% average annual growth rate to $116.4 billion from 2019 to 2024, with global gaming reaching $200 billion at that time.

Lululemon released preliminary earnings for its fiscal fourth quarter ending Jan. 31 and expects net revenue to be on the lower end of its previous guidance – between $2.125 billion and $2.165 billion.

CEO Calvin McDonald attributed the low estimate to “several consequences of the Omicron variant, including increased capacity constraints, more limited staff availability, and reduced operating hours in certain locations.”

Nike and Athleta have reportedly seen a similar trend.

If Lululemon is able to reach its predicted range, the company’s holiday revenue will still beat its third-quarter revenue of $1.5 billion — a 30% year-over-year increase.

More Obstacles Ahead

The low guidance isn’t the only problem the athleisure company is facing.

• Peloton sued the company in November for infringing intellectual property rights regarding its new apparel line. Lululemon countersued the next day.
• Last week, the company was sued by Nike for patent infringement related to Lululemon’s Mirror Home Gym, alleging use of the same technology. 

Lululemon, which acquired Mirror for $500 million, previously cut the brand’s sales outlook to between $125 million and $130 million — not even half its original projection of $275 million.

Sports-focused streaming service FuboTV expects to report an impressive Q4 2021 following the release of preliminary results, which includes revenue and subscriber growth. 

FuboTV projects revenue to range between $215 million and $220 million during the quarter, an increase between 105% and 109% compared to the same period the year prior. 

The New York-based company expects full-year revenue to reach between $622 million and $627 million, an increase between 138% and 140% year-over-year. FuboTV projects paid subscribers to exceed 1.1 million at year-end, an uptick of more than 100% year-over-year. 

Since raising $183 million in its IPO in October 2020, FuboTV continues to refine its strategy. 

• The company made its first investment in sports gambling with the acquisition of Chicago-based online sportsbook Vigtory last March.
• It acquired exclusive streaming rights to the 2022 World Cup qualifying matches of the South America Football Confederation last April.
• Last November, the company acquired French TV streaming company Molotov SAS in a deal valued at $190 million. 

Back-To-Back Records 

FuboTV generated record revenue of $156.7 million in Q3 2021, a 156% increase compared to the same period the year prior. The results were driven by a spike in paid subscribers, which reached 944,605 during the quarter, a 108% uptick compared to Q3 2020.

CEO David Gandler told CNBC he believes that FuboTV can reach between 3 million and 5 million subscribers in the next five years.