Strauss Zelnick's Zynga Zinger

Take Two Interactive's chief, Strauss Zelnick, has belittled Zynga, the company behind a host of successful Facebook games such as Farmville and Zynga Poker as nothing more than a 'direct marketing company'.

Speaking at the Reuters Media Summit, Zelnick, whose company owns the Grand Theft Auto publishing rights and which is currently raising millions of dollars for acquisitions in the mobile and social gaming space, said:

"Zynga is a direct marketing company, 97 percent of which don't pay them anything, 3 percent who do.

"They churn quite quickly and they get new customers. That is their model... I think they have disclosure issues, I think you are seeing their acquisition costs go up, marketing costs go up and they have very high churn."

Reuters reports that, "Zynga is expected to raise about $1 billion at a valuation of an estimated $14 billion."

However, Mr Zelnick is unsure that this is a great idea, "I would argue being the No. 1 player in (social gaming) is complicated, which is why Zynga hasn't gone public yet because their metrics are sketchy."

Speaking of Take Two's proposed buys in the market - a market that would look much more pleasant to T2 if valuations were lower - that "Take-Two would avoid flashy acquisitions, which is the route Zynga has chosen, buying smaller game developers at the rate of one a month over the last year."

Source: Reuters