FarmVille maker Zynga nears IPO; will it surpass Activision Blizzard?
In Zynga's proverbial poker game with the rest of the games industry, it's about to drop a royal flush. All Things Digital reports that the creator of Facebook money machines FarmVille, CityVille and more is preparing to file its initial public offering (IPO). In other words, soon everyone--not just investment firms and select financial elite--can buy Zynga stock. Rumors of a Zynga IPO have brewed for months now, but All Things D predicts, based on confidential sources, that it could come within the next week.
Considering the company has already been valued at $10 billion pre-IPO, imagine how high it would price itself upon going public, which All Things D imagines will be much more. If Zynga is already said to be worth more than $7.8 billion video games behemoth EA, this offering could set the 4-year-old company to be worth more than Activision Blizzard's reported $13 billion, the most valuable games publisher on the planet. With potential like that, no wonder the company has made 14 acquisitions in just 12 months and posted revenues of about $850 million last year.
And if Zynga becomes the biggest games company globally, what then? Mark Pincus has already expressed his ambitions for the red-and-white bulldog. When he led the opening ceremony for Zynga's Seattle office, Pincus mentioned his adoration for what Amazon has done for online retail, revealing that he wants Zynga to essentially become the Amazon of games.
But more importantly than that, how will this affect the rest of the industry? If PopCap aims to compete on the same level as Zynga and EA, its own reported IPO better come sooner rather than later. This potentially obscene valuation could send not ripples, but waves through the traditional games industry, inspiring even more high-level executives to ditch Xbox and Nintendo for an ever-shrinking slice of the Facebook pie. This is about far more than a whole lot (alright, an insane amount) of money; it's about the industry possibly taking a 180, if it hasn't already.
[Image Credit: New York Times]
How high do you think Zynga will price itself after an IPO? If Zynga becomes more valuable than even Activision, how will this affect the industry on the whole? Sound off in the comments. Add Comment.