Zynga Shares Are Exploding on This Disney Star Wars Deal

Zynga had some big news this week that sent shares soaring in after-hours trading on Tuesday, and had many Star Wars fans excited.

The company announced after the market closed on Tuesday that it has signed a deal with Walt Disney Co. for the rights to develop and publish a new “Star Wars” mobile game.

The game will be published under Zynga’s NaturalMotion studio and is a big win for the company since it purchased NaturalMotion in 2014 for $527 million.

The Disney-Zynga deal also includes the option to create a second “Star Wars” game, and NaturalMotion will begin operating “Star Wars: Commander,” a mobile game Disney launched in 2014.

The NaturalMotion acquisition was a few CEO’s ago, and was under the leadership of once Xbox executive, Don Mattrick.

“Star Wars is one of the most iconic franchises in the world and has engaged generations of fans for decades. As game makers and moviegoers, we’re huge fans of Star Wars and are excited to create new experiences for players that bring this beloved brand to life,” said current Zynga CEO Frank Gibeau in a statement.

The licensing agreement with Disney is a positive, in our view, and has the potential to expand Zynga’s player base, as well as drive higher revenue and margin expansion,” analysts for KeyBanc remarked. “The win suggests that Disney also sees momentum in Zynga’s underlying business and has confidence that it will develop a quality game (or two).”

Disclaimer: We have no position in Zynga Inc. (NASDAQ: ZNGA) nor Walt Disney Co. (NYSE: DIS) and have not been compensated for this article.