Should Microsoft buy Take two?

[assen]

Sure it's going to be risky business but for example if they invest 100 million dollars for a stake in 5 new companies, it can only take one of them to come out with a break out hit

The breakout hit rate in the industry is far, far below 1:5.

The Xbox360 will have 1000 titles (including Arcade) at some point this summer. How many of them would you classify as "breakout hits"? How many are new IP from relatively small studios and classify as "breakout hits"?

 

[Zassk]

Microsoft, should have just bought Sony when they wanted to enter the console race

Nintendo would have been the cheaper & better choice. Imagine - the Microsoft DS ... what might this software company have done with that technology and that market penetration?

 

[Shifty Geezer]

But in buying the companies, MS would affect their 'DNA' and change their decision making. Would the Wii and DS have been made if MS bought Nintendo in 2000? Or would they have just eliminated one piece of competition and produced the 'Nintendo 360'? You can't look at a company now and take it as read that the company would be in the same position if years earlier someone bought them out.

 

[Cheezdoodles]

But in buying the companies, MS would affect their 'DNA' and change their decision making. Would the Wii and DS have been made if MS bought Nintendo in 2000? Or would they have just eliminated one piece of competition and produced the 'Nintendo 360'? You can't look at a company now and take it as read that the company would be in the same position if years earlier someone bought them out.

You could just give them the resources to do what they do best, and support them in anyway you can on the software side. Ofcourse we cannot assume that the company would make the same decisions as it did when it was by itself, but theoretically you can just buy up stock and stay out of business completely. Either way, investing in Nintendo or Sony and supporting them (or just buying Sony's Playstation divisions) would probably be more cost effective in order to give them a good market segment along with a higher chance for profit, compared to all the money Microsoft has pissed away on their Xbox line..

Most aquisitions of companies turns out to be a bad deal for the parent company. Historically there aren't many examples of firms in different industries merging and doing as good as they should compared to the costs, so its hard to recommend such a business move in real life.

 

[Zassk]

Either way, investing in Nintendo or Sony and supporting them (or just buying Sony's Playstation divisions) would probably be more cost effective in order to give them a good market segment along with a higher chance for profit, compared to all the money Microsoft has pissed away on their Xbox line..

Yes, if you look at it as building a game division. No, if you look at it as mitigating Sony's assault on the living room.

The PS3 could easily have been marketed as a general-purpose computer, bundled with Ubuntu and OpenOffice, had Sony been on top of things. Think for a minute how big a threat that would be to Microsoft's cash cows.

I suspect $6 Billion (or whatever the accepted figure is) is a worthwhile investment to MS to have reduced Sony's influence so dramatically during this crucial console gen transition.

 

[Shifty Geezer]

The PS3 could easily have been marketed as a general-purpose computer, bundled with Ubuntu and OpenOffice, had Sony been on top of things. Think for a minute how big a threat that would be to Microsoft's cash cows.

It wouldn't. Linux doesn't have the software everyone needs or wants. As a nice little second machine for typing letters and surfing the web, PS3 is okay, on an HDTV. The thing doesn't play nice with monitors. As a replacement for the PC it's a non-starter. *If* Sony had included Linux as standard and there were developers who thought there was actually a market for professional software on the platform, maybe, just maybe, it could have sold a not utterly insignificant amount of 'PC' software products to make a blip of the billions strong Windows x86 platform. I would love to see a rival computer to the Windows PC and PS3 could have been awesome, except the software will never be there without major investment. Which wouldn't come from Sony as they're not a computer company.

 

[betan]

It wouldn't. Linux doesn't have the software everyone needs or wants. As a nice little second machine for typing letters and surfing the web, PS3 is okay, on an HDTV. The thing doesn't play nice with monitors. As a replacement for the PC it's a non-starter. *If* Sony had included Linux as standard and there were developers who thought there was actually a market for professional software on the platform, maybe, just maybe, it could have sold a not utterly insignificant amount of 'PC' software products to make a blip of the billions strong Windows x86 platform. I would love to see a rival computer to the Windows PC and PS3 could have been awesome, except the software will never be there without major investment. Which wouldn't come from Sony as they're not a computer company.

Sony cannot advertise a living room Linux but it has nothing to do with software. PS3 Linux can be configured to be a decent and shiny desktop even with miserable low main mem. But if Sony advertise it, they need to support it as well, which would be a real nightmare for them.

 

[RancidLunchmeat]

What?

Shifty is correct.

MS is selling off their studios for a reason, and I still don't understand the resistance to this very basic idea.

MS doesn't want to develop or sell games or a gaming console.

MS only owns these assets because they need to promote their platforms. Their business model is selling the platforms.

MS would be thrilled to merge with either Nintendo or Sony and have them pay for the hardware development and the software development as long as they were supplying the underlying platforms that linked the hardware to the software.

MS doesn't want to sell games, or hardware. They just want a PIECE of the pie.

This is no different than them wanting to be the supplier of the software that is embedded in every refrigerator that is connected to the internet that tells Mr or Mrs Joe Schmoe when they need to buy milk.

MS doesn't want to have to make the refrigerators, they don't want to sell the milk that you are going to buy.

They want to be the only source of the software that is loaded into the refrigerators that processes the information and tells you when you need to buy X, Y or Z.

MS doesn't want to make refrigerators and get $200 off of the sale. They don't want to sell the milk and make $2 off each carton you buy.

They want to be the invisible company that makes $10 off each purchase that you don't even recognize, or the company that makes $.25 off each transaction you make when you order milk from the supermarket using your automated refrigerator.

MS's entire business model is based upon being the middle man that makes the transactions happen and makes them seamless.

Whether that's buying milk through your refrigerator or buying movies or games from a desktop box, that's what they want to do.

They don't want to make the refrigerators or the desktop box, they don't want to make the milk or the video games or the movies you are purchasing.

They just want their 2% fee on each and every transaction that you make because they've made the transaction happen.

No, they won't buy Take 2.

The reason they are selling off their in-house development studios is because they believe they've already gotten past that point.

 

[cloud9]

To the OP:

I doubt MS would make such a move. Recent events, such as Bungie breaking off, are evidence that Microsoft is moving away from 1st party development, as it is proven to be a greater financial risk and less profitable.

Just out of curiosity, if Microsoft DID buy Take-Two, let's say this week, would it be too late to pull the plug on the PS3 version of GTA4?

What a ruckus that would be...

 

[AlphaWolf]

Just out of curiosity, if Microsoft DID buy Take-Two, let's say this week, would it be too late to pull the plug on the PS3 version of GTA4?

What a ruckus that would be...

That would really depend if they (take two) had any agreement with Sony. I'd be surprised if they don't.

 

[archangelmorph]

To the OP:

I doubt MS would make such a move. Recent events, such as Bungie breaking off, are evidence that Microsoft is moving away from 1st party development, as it is proven to be a greater financial risk and less profitable.

Just out of curiosity, if Microsoft DID buy Take-Two, let's say this week, would it be too late to pull the plug on the PS3 version of GTA4?

What a ruckus that would be...

If MS DID buy Take-Two then why would they want to..?

If you consider the losses MS would be absorbing in development costs for both the PS3 version of GTA IV & the new Rockstar game exclusive to that platform, coupled with the complete loss of PS3 GTA IV sales (surely a good couple of million if not more..) It's likely they'd be throwing away such a huge amount of money that they woudn't be able to recoup their losses off the 360 sales alone..

It really wouldn't make sense to buy Take-Two now & the best time would probably be after GTA IV's market domination but by then T2's market valuation may have risen considerably..

 

[PARANOiA]

MS have never shown any interest in T2, so this is of course all "in the land of the fairies" talk... But!

What would be really smart if they did buy them would be to intentionally release the PS3 version as clearly inferior... drop the framerate and texture detail, maybe. Then get the "I'll never buy a 360" owner profit on those sales, while convincing Avg Joe that the 360 is a better gaming device.

Of course it would be fairly immoral, but eh *shrug*

 

[Squilliam]

MS have never shown any interest in T2, so this is of course all "in the land of the fairies" talk... But!

What would be really smart if they did buy them would be to intentionally release the PS3 version as clearly inferior... drop the framerate and texture detail, maybe. Then get the "I'll never buy a 360" owner profit on those sales, while convincing Avg Joe that the 360 is a better gaming device.

Of course it would be fairly immoral, but eh *shrug*

It would ruin their reputation amongst developers. That would cost them much more than they could gain. Noone wants to release gimped versions.

 

[Johnny Awesome]

MS will not buy a publisher. MS probably won't even buy any more developers.

 

[cloud9]

If MS DID buy Take-Two then why would they want to..?

If you consider the losses MS would be absorbing in development costs for both the PS3 version of GTA IV & the new Rockstar game exclusive to that platform, coupled with the complete loss of PS3 GTA IV sales (surely a good couple of million if not more..) It's likely they'd be throwing away such a huge amount of money that they woudn't be able to recoup their losses off the 360 sales alone..

It really wouldn't make sense to buy Take-Two now & the best time would probably be after GTA IV's market domination but by then T2's market valuation may have risen considerably..

Microsoft would not make the move for a short term profit, they would do it to essentially c*** block Sony. You seem to be forgetting that the PS3 is the 360's most direct competitor.

It's not a big deal though, it was only a hypothetical question. :smile:

That would really depend if they (take two) had any agreement with Sony. I'd be surprised if they don't.

I figured this much. Specifically, we know Rockstar is developing a "Home Space" for the PS3 version, so I'm sure there is some type of agreement.

 

[Johnny Awesome]

Well for billions of dollars MS could do a lot of things, but it wouldn't really be worth the return. How many PS3 sales would go to MS because of GTA? Maybe 5 million? $5 billion for 5 million - paying $1000 per user seems pretty silly to me.