Gaming giant Take-Two is in talks to sell its Chartboost adtech division

• Take-Two Interactive is in talks to sell its adtech division Chartboost.
• The sale aligns with Take-Two's focus on premium or "AAA'' gaming assets.

Take-Two Interactive, the video games giant behind franchises like "NBA 2K24" and "Grand Theft Auto," is in talks to sell its adtech division Chartboost.

The company plans to offload Chartboost to streamline its focus on premium or "AAA'' gaming, according to multiple people familiar with the process. These people asked for anonymity to protect their business relationships; their identities are known to Business Insider.

Adtech companies AppLovin and LoopMe have emerged as potential buyers for the Chartboost assets, the people said. Chartboost's acquisition talks with these companies are not finalized and could still change or fall apart.

Take-Two declined to comment. AppLovin and LoopMe did not respond to requests for comment.

Take-Two acquired Chartboost through its 2022 $12.7 billion purchase of the mobile gaming company Zynga.

Zynga had only bought Chartboost a year earlier for approximately $250 million. Zynga has built popular gaming franchises like "Words With Friends," "FarmVille," and "Two Dots."

Chartboost offers technology that helps mobile app developers earn money from their apps and acquire new users through mobile ads. When acquiring Chartboost, Zynga previously said it had gained more control over how its games made money and could retain more ad revenue, versus outsourcing to a third-party vendor, where it would have to pay additional fees.

Zynga began telling advertising customers recently that it intended to offload campaigns booked and managed through Chartboost to rival AppLovin, a person familiar with the matter said. AppLovin has expressed an interest in acquiring some of Chartboost's assets, two separate sources said. Those include its demand-side platform, which advertisers use to place their ad buys, and its mediation technology, which helps advertisers identify the best value ad networks for their campaigns.

AppLovin has been one of the adtech sector's soaraway successes, and its stock is up more than 343% this year. It has a market capitalization of almost $58 billion, putting it on a par with industry darling The Trade Desk, with a market cap of around $61 billion at the time of writing.

AppLovin offers a similar, but larger, business to Chartboost — offering developers adtech to make money from their mobile games and find new users. It's also expanded its offering beyond apps to areas like streaming TV advertising.

Elsewhere, the UK-based private-equity-owned adtech company LoopMe has looked at acquiring Chartboost's ad exchange as it plans to expand its footprint in the US and bolster the sell-side of its business. Maggie Mesa, Chartboost's former senior vice president of global supply and partnerships, will shortly join LoopMe to steer these efforts, said two people familiar with the matter.

LoopMe, which took a majority investment from Mayfair Equity Partners in 2022, told BI then that it planned to pursue acquisitions and a possible initial public offering.

Take-Two has indicated in recent earnings calls that while advertising remains important to its mobile gaming assets, the company is more focused on deriving revenue directly from consumers.

In its most-recent quarter, Take-Two said its mobile segment increased net bookings by mid-single digits and that this was partially offset by declines in its hyper-casual portfolio — games that tend to rely more on advertising.

Adtech deal activity has picked up over this year. There were 58 adtech transactions by the end of the third quarter, according to investment bank LUMA Partners, up 49% on the same period in 2023. LUMA Partners said the deal flow largely reflected sector consolidation as companies merged to gain scale or enter new geographies and markets.