EA Attempts To Buy Take2

[Ujitsuna]

Take2 rejects: http://ir.take2games.com/ReleaseDetail.cfm?ReleaseID=295739.

Apart from going after GTAIV, they'd also have a huge monopoly on sports games if the deal went through, thoughts?

[Tullaryx]

It was bound to happen. EA is in a fight to retain its status as the number one gaming publisher. Activision's merger with Blizzard pretty much forcing EA to counter with its own big merger/acquisition. It's not even a big secret that EA has been trying to acquire Take-Two for over the past couple years. This announcement of a 2 billion dollar offer to buy Take-Two is the first one to be readily publicized.

EA's offer to buy Take-Two reminds me of the current Microsoft attempt to buy Yahoo! for 44+ billion dollars in cash and stock. Where Microsoft pretty much has all the leverage to close out the acquisition (even if it means a hostile takeover of Yahoo!) EA doesn't hold all the cards in their attempt to acquire Take-Two. While their offer of 2 billion dollars for Take-Two is 60% above the premium price of Take-Two's stock at the time of the announcement it doesn't factor in that Take-Two will have one of the biggest titles, if not the top title, of the year in Grand Theft Auto IV. Huge-selling AAA titles have a tendency to raise a publishing company's stock price.

Take-Two's governance board will try and delay EA from trying a proxy battle to force the company to accept the offer. Unlike the MS/Yahoo! battle, Take-Two's board members are not all up for vote so even if EA is able to get some of their handpicked people to join Take-Two's board of directors it may not be enough to allow the acquisition to go through. EA's mistake had been to wait this long to finally make a public offer to Take-Two. If they had made the public offer sometime early last year then they probably wouldn't have had to offer such a big purchasing price and not have to fight to make the acquisition happen.

In terms of how this acquisition may impact the industry if it goes through it will just hasten even more consolidation within the industry. Before this year's GDC in San Francisco GamePro had published a rumor that Microsoft was getting ready to make a public offer to acquire Epic Games for 1 billion dollars. This was a rumor that didn't have legs but one that could still happen. Microsoft has been losing some of their long-standing third-party developers to acquisitions by EA, Activision and Ubisoft. With those three publishing companies known for releasing most of their top-titles as multiplatforms the exclusive titles Microsoft could've gotten in the future is slowly eroding. EA acquiring Take-Two (if it succeeds) means any future titles that might've stayed a 360 exclusive (BioShock sequel is one) may now go multiplatform.

I see the industry becoming dominated by the big publishers with the smaller studios becoming wholly subsidiaries of the bigger companies or leaving the industry outright. The question is not whether it will happen but how long it will continue to happen before everyone has been swallowed up by the big companies. I see the same happening to the Japanese publishing companies like Capcom, Konami and Square-Enix. While those three companies are considered the top three Japanese game publishers their size and value pale in comparison to their Western counterparts. Plus, with even Japanese developers admitting that the industry in Japan is starting to stagnate in comparison to Europe and North America the Japanese studios are ripe for takeover.

I think gamers in general don't care who buys what and who does what as long as games continue to be made and released. Innovation may take a hit in the short-term but I think long-term things will stabilize and gamers will be back to just playing instead of worrying about EA being the Evil Empire and gobbling up everything around them.
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[Ujitsuna]

I hope they don't pursue this, they'll own like 50% of the whole market.

[Tullaryx]

I think EA will pursue this for as long as they think they can pull off the acquisition for no higher a price as they've offered. Even for 2 billion dollars I think the offer is way too high for a video game publisher, but either EA buys Take-Two or one of their big competitors end up buying a stake in Take-Two. Either way I do think Take-Two's days as an independent publishing company is quite numbered. Even if Grand Theft Auto IV becomes a huge hit for the company it still won't fix the major problems the company has in terms of how its being run for the past couple years.
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[RedCydranth]

I'm out of touch, what ever happened to Rockstar? Didn't they make the GTA Games?
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[Sailor Sexy]

Rockstar is a division of Take Two. So, EA is trying to buy the parent company.
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~Uguu!~

[Sniper_Zegai]

EA are quickly becoming the Starbuck's of the video game industry.
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[Tullaryx]

While I don't disagree with EA's move like most seem to be I do think it's a desperate move on their part to keep pace with Activision's own spree of acquisitions the last two or so years. I don't seem to hear much outrage at Activision gobbling up more developers the last couple years than EA. From what I could read and hear from those in the disutry Activision is as bad or even worst than EA when it comes to treating their own dev studios. It's just by like that lately they've had successes with some of their more high-profile franchise (Call of Duty and Guitar Hero) that devs are kept happy with high stock prices.

As I've said before if EA doesn't buy Take-Two then some other larger company will and there'll be no stopping it. I'm all for EA or Microsoft or Activision or others for acquiring Take-Two as long as they follow-through on their efforts to give Rockstar and the dev teams being acquired a semblance of freedom in how to develop their games.
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[RedCydranth]

[Sniper_Zegai]

[Tullaryx]

I wouldn't say that EA is the only one doing that. Activision has also joined in on the fun of gobbling up the small studios. In fact, they've done it more in recent times than EA has. I think at times EA gets blamed for every bad thing that happens when a small developer disappears. While some of the blame is well-earned by EA some of it has become old since they're not the only major publisher that's doing it now.

The days of the old developer studios, or even mid-sized ones, are as dead as the dodo. Unless these studios decide to just make cheap games for the PSP and the DS the amount of money a game now needs to make it onto the new console systems are now in the millions instead of just hundreds of thousands.
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[RedCydranth]

I really think that is a shame. Because it takes so much for a game to be made, little gems by indy companies will now be a thing of the past. The NES, SNES, Genesis and Playstation era had a slew of small titles which were often beloved more than larger named games. Small companies can often come up with some pretty ingenius stuff. When's the last time something revolutionary and fun came from one of the kingpin companies, aside from Nintendo?

Sniper, I had no idea Starbucks did that. Its a shame. To me Starbucks is a good company who provides delicious coffee. Most smaller business in my area stay open because they offer more than coffee and Starbucks is only coffee. I guess in Britain where they have more cafes it could be detrimental. But to mirror Tull's sentiments, I do know that EA isn't the only one guilty of the "conquer to survive" gameplan. Squeenix is a decent example. Rather than deal with Enix, Squaresoft just felt it was best to make a merger. Since the merger though, I don't think they've been as successful as they were when they had each other to compete. With their major competition conquered, quality slipped. But that is only my personal opinion. Others may feel the opposite.
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I'm sorry and I apologize are the same thing.
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[Gil-galad]

If we make a parallel to the movie industry, we can see that low budget indie movies have found a market, even in a world of super-high budget blockbuster flicks. I can hope that the same thing will happen with the gaming industry. There are platforms on which low budget, but interesting, and fun games can be produced-- like handhelds, for example, and PC.

Nintendo is always trying to burst the freakin' bubble, even if some of their attempts are a little misguided. Other major gaming companies (especially EA) should take a lesson from them. The only problem is, that people will continue to buy the same games rehashed by EA each year for 50-60 USD (Madden games, anyone?)-- so EA has no incentive to really create interesting in 'new' games.

Anyways-- I think that there will still be a market for niche 'indie' type games, and as long as there is a cheap platform for them to be produced on, I' hope that these games will continue to be made. A beautiful recent example is a charming little puzzle game by Level 5 called Professor Layton and the Curious Village-- terrific, low budget, on the right platform, incredibly entertaining and unique. =3
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[Tullaryx]

I, too, believe that little gems of a game not truly gone but I don't think we'll be seeing them in large numbers as we've had in the past. using the same analogy Gilbort used. I still think the big publishers can continue to release smaller titles over download distribution systems like Xbox Live Arcade and PSN and Virtual Console. One of the best games last year was a title that I downloaded straight from Xbox Live Arcade. I am talking about the insanely addictive title, Puzzle Quest.

While EA, Activision, Ubisoft and the ther big publishers concentrate more on high-end titles I can see them creating divisions within their departments whose sole goal is to create smaller titles for cellphones, handhelds, and the PC. One of the most addictive games I play now is not even on a console but a web-browser game called Astro Empires. Even when I'm playing on my 360 I'll still have my browser open so I can manage my AE account.
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[Sniper_Zegai]

The worst thing about all this in my opinion is the fact that publishers usually hold the rights to games. So when smaller developers come up with "out there" ideas, the companies in charge may head it off for a more safer bet.

It is a shame but I do think for the most part video gaming wont change too drastically.

I'm just annoyed at EA because they liquidated Westwood, even more so since a new Red Alert has been announced.
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