EA offer $2 billion to buy Take Two

[Shifty Geezer]

http://www.eurogamer.net/article.php?article_id=93352

Straight forward article. My question is, why? What has Take Two got that's so valuable? They can't make money themselves, keep getting into trouble, and outside of R* I don't know what assets they have worth so much. Is this as much a case of EA just wanting to sure up a truckload of developers and beat down the up-and-coming Ubisoft and Activision? The biggest fish they can eat?

Edit : Apparently they do make money

 

[AlphaWolf]

The sports games market would be in complete control of EA. Throw in GTA and Bioshock and you've got a couple of valuable licenses plus dominance (monopoly almost) of the sports market.

 

[Mobius1aic]

EA just never stops do they?

 

[-tkf-]

Capitalism leads to communism!

 

[one]

The sports games market would be in complete control of EA.

You mean the licensed sports market (hint: Wii Sports) :smile:

 

[cthellis42]

...then ActivisionBlizzard will buy Ubisoft. Then Microsoft will buy BOTH of them. Then THEY'LL be purchased when oil starts running low, and we'll be left with ExxonMobilMicrosoftActivisionBlizzardEA for our Xbox 2880 in 2019!

 

[Nesh]

Capitalism leads to communism!

Communism doesnt exist when everything is owned by one single leader or by a government. Resources concentrated to few hands lead to feudalism instead. Communism is when everything belongs and is shared to everyone

 

[-tkf-]

Communism doesnt exist when everything is owned by one single leader or by a government. Resources concentrated to few hands lead to feudalism instead. Communism is when everything belongs and is shared to everyone

Now your getting into details

 

[PARANOiA]

Communism doesnt exist when everything is owned by one single leader or by a government. Resources concentrated to few hands lead to feudalism instead. Communism is when everything belongs and is shared to everyone

So basically open source is communism. Got it

As for Take Two, aren't R* basically released from T2 a few months after GTA4 is released? Or do I have my wires crossed?

 

[fearsomepirate]

So basically open source is communism. Got it

Not exactly. You'd have to take the computers away from the programmers and put rural farmers on the task of developing Linux, then break the programmers' fingers and send them to work in the mines. The Glorious People's Revolution cannot be stopped!

Anyway, on topic, I'm guessing EA's after 2K sports.

 

[Titanio]

Anyway, on topic, I'm guessing EA's after 2K sports.

While it's nice to knock out a competitor, perhaps, from the FAQs EA put out on this, they seem to sound a lot more interested in Rockstar and the other non-sports studios.

Apparently Take2 has rejected this. Which opens up the possibility of a hostile takeover..will be interesting to see what happens.

 

[wco81]

2K Sports don't have too many big sellers.

It would have to be GTA, Bioshock, etc, to justify that kind of capital.

 

[cthellis42]

Grabbing Firaxis wouldn't be bad either, but I agree that it would mainly be grabbing Irrational and Rockstar-related developers and properties that would bring up that total.

 

[AlphaWolf]

Comprehensive documentation of the discussion between EA and Take-Two.

They probably just believe they would be valued much higher after GTAIV ships.

 

[AlphaWolf]

Seems like EA maybe keeping their options open to acquire Ubisoft.

 

[joker454]

My question is, why? What has Take Two got that's so valuable?

I don't work for Take2 anymore, but while I was there EA was clearly frequently interested in buying us so they could totally control sports. At a minimum, taking Take2 out of the picture means EA will be able to bid dramatically less on exclusive rights to MLB, NFL, etc, since they often got into bidding wars with Take2.

2K Sports don't have too many big sellers.

MLB 2K7 is hovering near the 1 million sales mark

 

[wco81]

Right but in the GameTheory podcast, they said 2K Sports does maybe $200 million a year in revenues -- even that sounds high to me.

But in any event, there is no way EA would pay $2 billion just for that business.

They would have to believe that they could get better returns on games like GTA and Bioshock sequels.

 

[Arwin]

EA missed out on a lot of other big purchases in the industry, such as the ones Activision made. I think they may have always had their sights on Take Two, but in either case, I think they'll want this to happen fairly badly.

 

[BrynS]

This analysis probably sets outs most of the permutations and rationale for EA's bid.

[...]
We think that the real urgency of the EA bid is to avoid competition from Take-Two sports titles scheduled for release later in the year. By our math, each year that the companies compete in sports costs EA $150 million in operating profit. If Take-Two shareholders do not accept an EA bid and close the transaction before Take-Two releases its fall sports lineup, EA will have lost $150 million in opportunity cost. Thus, the clock is ticking
[...]

 

[PARANOiA]

Joker mentioned this a few posts back - maybe Pachter is a B3D reader?

Realistically, if they could save $150m per year on top of the profits of the TT library, this would be a smart investment if they managed to pull it off.