Tuesday, February 26th 2008

EA Proposing Takeover Bid for Take-Two

Given EA’s somewhat criticised reputation for takeovers (Bullfrog and Westwood come to mind), Grand Theft Auto fans may not be best pleased to hear that EA is now making a bid to acquire Take-Two Interactive. Take-Two has a number of major subsidiaries, with some of the best known being developers Rockstar and Firaxis, responsible for the GTA series and Sid Meier’s more recent games such as Civilization IV; along with publisher 2K Games. The company is also responsible for other well-known titles such as Manhunt and Bioshock. EA is offering $26 per share, giving the merger an approximate value of $2.5 billion. The full press release can be read here, and you can read on to see a statement posted by EA’s CEO, John Riccitiello.

I’m pleased to announce that EA has made a proposal to acquire Take-Two. We’ve issued a press release that explains why the deal is attractive for the shareholders of both Take-Two and EA. Now I want to share some perspective on why it would be good for the people who make Take-Two’s games and, just as important, the people who play them.

In a recent presentation, I told a group of developers that our industry is facing big challenges. Development costs are rising dramatically and games that aren’t big hits struggle to reach profitability. Most independent studios don’t have much margin for error. The result has been consolidation – large publishers are merging and independent developers are more amenable to being acquired. Unfortunately, our industry has a spotty record on integrating creative teams. We’ve all heard the stories about teams that got mismanaged in a merger – I know I’ve got a few.

I like to think that we learn from our experience. When I came back to EA last year, we introduced a new organization model that respects creative cultures and gives developers more freedom. We call it the “Label” model because it treats each of EA’s four labels as a sovereign entity responsible for its own creative decisions and business results. We expect each team to operate on a profit plan and, in exchange, we provide investment, infrastructure and a lot of creative freedom.

Has it worked at EA? It’s too early to say for sure, but the initial feedback is encouraging. Many of the people at Digital Illusions in Stockholm, Criterion in the UK, Mythic in Virginia, and more recently BioWare and Pandemic will tell you that so far, the experience at EA has been good. If you know people who work for these studios, I’d encourage you to talk to them. Ask them about our Label organization model. It’s the model we hope to use with Take-Two.

Right now, Take-Two’s future is uncertain. Take-Two’s creative teams make fantastic games and the company has gotten some good interim support from a group of new corporate leaders. But Take-Two is facing a host of threats and – with or without combination with EA – we believe there is a strong likelihood that the company will be sold in the not-too-distant future.

We also believe that EA’s proposal to acquire Take-Two is a good one for the people that make the games or are involved in leading these creative teams. We’re offering stable management with an executive team that truly understands games. EA has a powerful publishing capability. We want to offer these and other advantages to Take-Two’s creative teams and provide them an environment that shields these teams from unnecessary interference and allows them to keep making great games.

For people who buy and play games, know that we too are fans of Take-Two and Rockstar products and feel we can provide their creative teams with the support they deserve to continue to bring you more of their great games in the future.

So, that’s it. We’ve made a proposal to buy Take-Two. Our preference is to make this a friendly transaction and I’m hopeful we can achieve that. We’ve sent this proposal in the genuine belief that combining EA and Take-Two would be good for the people who make games and good for the people who play them.

I sincerely hope we get a chance to prove it.

John Riccitiello
Source: EA
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16 Comments on EA Proposing Takeover Bid for Take-Two

#1
WhiteLotus
i thought we already had a thread on this? either way EA is buying out the competition
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#2
EastCoasthandle
The link suggest communication from the 24th. So all is well at the moment unless something else develops.
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#3
ktr
I dont care if EA takes T2...but it has be after April...I dont want to see EA's name on my GTA4 ;).
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#4
WhiteLotus
If they do before April, they may hold the game back, put some in-game adds into it about all the other wonderful games that they have. I don't think this will happen but i wouldn't be surprised if they did.
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#5
spookypld
3xNO! :p

Tako2 is the best and EA s##
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#6
Dangle
Do Not Let Ea Buy Take 2!
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#7
bombfirst885
So Microsoft is willing to blow 40+ billion on Yahoo, but not 2.5 billion to help out their struggling first party development. Microsoft should just bite the bullet, and buy TK2 for GTA alone.
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#8
WhiteLotus
and then port it to xbox360 only
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#9
cloaker
Nooooooo!

RIP GTA :'(
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#10
effmaster
by: bombfirst885
So Microsoft is willing to blow 40+ billion on Yahoo, but not 2.5 billion to help out their struggling first party development. Microsoft should just bite the bullet, and buy TK2 for GTA alone.
Well said and very true bombfirst. But the real reason behind Microsoft offering so much money for Yahoo was because of the potential ad revenue that they would be making from it. And I dont think that Microsoft necessarily wants to put that same philosophy in games. Well maybe a little but not +$40Billion for it.

however I do hope that Microsoft does make a counteroffer. It would really show EA that they cant buy any developer or publisher that they want to.
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#11
WarEagleAU
Bird of Prey
Dont see anything wrong with this really. The whole GTA franchise sucks anyways, of course, that is just my opinion.

And +1 on a thread talking about this same thing. IT was a few days back that I saw it.
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#12
brian.ca
by: WhiteLotus
i thought we already had a thread on this? either way EA is buying out the competition
You're probably right (about seeing a thread on this already), take two already declined (for now) saying EA undervalued them and just want to cash in on GTA before it's released. They offered to talk to EA after the release and I believe EA already declined. However given EAs approach there's probably still a chance of a hostile take over.

I hope not though.. I haven't had any inclination to buy any EA games in a long time and that was only cemented a few years back with the news of EA games using copy right protection that really screwed up peoples systems. That kept me from even trying out some of the few games from them that I did want to try when I found out they were distributing them (Black & White 2, and some version of them sims I think it was).

I don't want to see the EA tag on games like the next Civ installments or /shudder, the next Elder Scrolls game (think they're just the distributor there though).
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#13
tiys
I'm on EA's side with buying T2. It's a good move because they'll get more revenue after GTAIV comes out. It's a good investment IMHO.
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#14
effmaster
by: tiys
I'm on EA's side with buying T2. It's a good move because they'll get more revenue after GTAIV comes out. It's a good investment IMHO.
A good investment for EA but is it a good investment for gamers and independent delelopers?
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#16
hacker111
damn. Lets dot the deal without the GTA..the devopers are fine and getting better...no need to change. Hire them to your company to help?:toast:
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