NOOOOOO!!! "EA Proposes to Acquire Take-Two Interactive"

[Icy]

ELECTRONIC ARTS PROPOSES TO ACQUIRE
TAKE-TWO INTERACTIVE SOFTWARE FOR $26 PER SHARE
IN CASH, OR APPROXIMATELY $2.0 BILLION

Proposal Represents 64 Percent Premium to
Take-Two’s February 15th Closing Price and 63 Percent
Premium to Take-Two’s Closing Price Over the Previous 30 Days

REDWOOD CITY, Calif., Feb. 24, 2008 – Electronic Arts Inc. (“EA”) (NASDAQ: ERTS) today announced that it has proposed to acquire Take-Two Interactive Software, Inc. (“Take-Two”) (NASDAQ: TTWO) in an all-cash merger valued at approximately $2.0 billion.

EA’s proposal of $26 per share in cash represents a premium of 64 percent over Take-Two’s closing stock price on Feb. 15th, the last trading day before EA sent its revised proposal to Take-Two, and a 63 percent premium over Take-Two’s 30-day trailing average price over the thirty trading days ending on that date.

EA’s proposal was contained in a letter sent on Feb. 19th by EA Chief Executive Officer John Riccitiello to Strauss Zelnick, Executive Chairman of the Board of Directors of Take-Two. The Take-Two Board’s subsequent rejection of the EA proposal led to EA’s decision to release the letter and bring its proposal to the attention of all Take-Two shareholders.

Mr. Riccitiello said today: “Our all-cash proposal is a unique opportunity for Take-Two shareholders to realize immediate value at a substantial premium, while creating long-term value for EA shareholders. Take-Two’s game designers would also benefit from EA’s financial resources, stable, game-focused management team, and strong global publishing capabilities.”

The EA letter warned that further Take-Two delay in accepting EA’s proposal could prevent Take-Two’s shareholders and other constituents from realizing its benefits. “There can be no certainty that in the future EA or any other buyer would pay the same high premium we are offering today,” Mr. Riccitiello wrote. The letter added that timely completion of the proposed transaction would allow EA’s strong publishing and distribution network to positively impact the ongoing post-launch sales of GTA IV and support the new Take-Two titles scheduled for launch later in the year and during the holiday selling season.

As noted in EA’s Feb. 19th letter, EA’s proposal is not conditioned on any financing requirement. It is, however, subject to certain customary conditions as set forth in the letter. EA’s $26 per share proposal is based on the current equity capitalization of Take-Two. Although EA indicated in the letter that its proposal was subject to negotiations commencing by Feb. 22nd, EA intends to keep its proposal open for the present to give Take-Two’s shareholders and Board of Directors further time to consider it.

The full text of EA’s letter to Take-Two follows:

February 19, 2008

Mr. Strauss Zelnick
Executive Chairman of the Board of Directors
Take-Two Interactive Software, Inc.
622 Broadway
New York, NY 10012

Dear Strauss:

Thank you for your letter of February 15, 2008. While I appreciate its courteous tone and value our ongoing dialogue, I am disappointed that you have rejected Electronic Arts Inc.’s (“EA’s”) $25 per share cash offer to acquire Take-Two Interactive Software, Inc. (“Take-Two”) and declined to engage in the friendly negotiations we proposed. We continue to believe that an acquisition of Take-Two by EA is in the best interests of your shareholders, employees and other constituents, and we remain interested in acquiring Take-Two. So, to further demonstrate our seriousness and encourage you to move forward now, I am writing to increase EA’s offer to acquire all of the outstanding shares of Take-Two to $26 per share in cash. This offer is subject to Take-Two agreeing by February 22, 2008 to commence negotiation of a definitive merger agreement and to permit EA to commence a limited due diligence review of Take-Two.

Our revised all-cash offer represents a 64% premium over Take-Two’s most recent closing price and a 63% premium over Take-Two’s 30-day trailing average price (based on prices as of market close on Friday, February 15th). We believe our offer represents a unique and compelling opportunity for Take-Two shareholders to maximize the value of their investment in the company, with materially lower risk than if Take-Two proceeds on a stand-alone basis.

We also believe that the transaction we are proposing represents a uniquely attractive opportunity for Take-Two’s creative teams and key employees. EA is a diversified leader with well-established franchises and proven intellectual properties, global reach, and significant financial resources. I know we both agree that Take-Two’s talented creative teams deserve a permanent home within a stable and growing publisher that provides these teams an environment to do what they do best – create great games. EA is organized in a four-label model that provides our creative teams the autonomy they need to fully realize their creative ambitions, while also providing a stable and supportive corporate and publishing infrastructure which allows them to best address the global marketplace. We have the resources to make the significant investments in technology and infrastructure needed for the most creative and innovative games in the industry. In short, a combination with EA would provide Take-Two’s studios and employees a combination of the right resources for investment and global reach, and the right environment to do their best work.

We believe that Take-Two’s shareholders would not be well-served by any further delay in negotiating and completing the proposed merger. While the videogame industry remains an attractive, high-growth business, the challenges and risks in the business are escalating, and the need for scale is becoming more pronounced. Despite steps taken since March 2007, Take-Two remains dependent on a limited number of titles, and has limited capital resources. In addition, Take-Two faces ongoing financial, legal and operating issues and a very intense competitive environment. Given these factors, we believe it will be increasingly difficult for Take-Two to create sustainable shareholder value and that Take-Two remains exposed to considerable risk of value loss.

We also believe that any delay in this proposed transaction works against the interest of Take-Two’s shareholders, because:

• There can be no certainty that in the future EA or any other buyer would pay the same high premium we are offering today. We place significant value on the ability to close the transaction relatively quickly so that EA’s strong publishing and distribution network, including our global packaged goods, online and wireless publishing organizations, can positively impact the catalogue sales of GTA IV and also the launch and sale of titles released later this year. We want to work with you and your team to complete the transaction in time to begin realizing its significant marketplace benefits in advance of this year’s holiday selling season.

• We believe Take-Two’s current share price already reflects investor expectations for a strong release of GTA IV as well as the longer-term issues that Take-Two faces. Once GTA IV ships, Take-Two will again be dependent on less-popular titles and face increasing challenges to compete with larger and better-capitalized competitors.

• With GTA IV shipping on April 29, development on this important title must now be essentially complete. We believe now is the right time to complete a transaction with minimal disruption for Take-Two.

We also believe the transaction we are proposing will create value for EA’s shareholders. In addition to the top-line benefits noted above, we can achieve bottom-line benefits by combining Take-Two’s and EA’s corporate and publishing infrastructures and by optimally supporting Take-Two’s creative teams and intellectual properties in EA’s decentralized label structure.

Considerable thought, time and resources have been put forth in developing this offer, and our Board of Directors unanimously supports it. Our offer is not conditioned on any financing requirement. It is subject to the satisfactory completion of a due diligence review of Take-Two, the negotiation and execution of mutually acceptable definitive transaction agreements, and the satisfaction of customary conditions to be set forth in such agreements. We are prepared to move forward immediately with formal due diligence and the negotiation and execution of a definitive merger agreement and believe that with adequate access to the necessary information and people, we can complete both in approximately two weeks. We believe that our due diligence review can be completed with minimal disruption, requiring only limited access to a small number of senior executives of Take-Two and its legal, accounting and financial advisors. We also have prepared a draft merger agreement that we can forward to you immediately.

Our strong preference is to conduct a private negotiation. If you are unwilling to proceed on that basis, however, we may pursue other means, including the public disclosure of this letter, to bring our offer and the compelling value it represents to the attention of Take-Two’s shareholders.

I am available to meet and discuss any and all aspects of this proposal with you and your Board. Again, we believe this proposal represents a unique opportunity to maximize value for Take-Two’s shareholders, and that the combined enterprise would be extraordinarily well positioned to build value for our respective customers, employees, developers and other business partners. We hope that you and your Board share our enthusiasm, and we look forward to hearing back from you by February 22.

Sincerely,
John Riccitiello
Chief Executive Officer
* * *

Conference Call

Electronic Arts will host a conference call on Monday, February 25, 2008 at 5:00 am PT (8:00 am ET) to discuss its proposal to acquire Take-Two Interactive and may disclose other material developments affecting its business and/or financial performance. Listeners may access the conference call live through the following dial-in number: (877) 795-3647, access code 220497, or via webcast at http://www.eatake2.com.

A dial-in replay of the conference call will be provided shortly after the call ends and remain available until March 3, 2008 at (719) 457-0820, access code 220497. A webcast archive of the conference call will be available shortly after the call ends at http://www.eatake2.com.

[Icy]

The end of sport gamming?

With take-two owning the MLB license... no more "the show"? (i doubt EA will allow Sony to develop baseball games as take-two did)

The end of NBA2k? (why to develop it and NBA live?)

The end of NHL2k? (why to develop it and NHL?)

[Izulde]

News like this makes me less and less interested in console gaming.

[Eaglesfan27]

The MLB License currently only is exclusive to 3rd party games which is why Sony can do the Show. Of course, EA could come up with the money to expand it if they decided they wanted to increase the profit margin of MLB 2k.

Unfortunately, if this goes through, I think it is the end of NBA 2k as you said because LIVE is their main brand :(

[Icy]

The MLB License currently only is exclusive to 3rd party games which is why Sony can do the Show. Of course, EA could come up with the money to expand it if they decided they wanted to increase the profit margin of MLB 2k.

Unfortunately, if this goes through, I think it is the end of NBA 2k as you said because LIVE is their main brand :(

Perfect chance for EA to lock the MLB license as exclusive, Sony can't enter a bid war as Sony only develops for their own console, while EA does for all them, getting way more potential customers.

[RedKingGold]

Smart business move by EA.

Bad for anyone who's still a fan of console gaming.

[MizzouRah]

I can see a "EA Console" in the works.

F'n EA!!!!!!!! :mad:

[Galaxy]

Microsoft and Sony must be getting pissed at EA. They should reject any games they put out.

[Calis]

Man, we're going to be down to just Activision, or Activision Blizzard whatever it's called now and EA, with nobody else even in the running.

Too bad though, but Take Two has just had problem after problem lately so probably a good deal for them, and a good deal for EA.

We can only hope that they incorporate a large amount of people from the teams working on the 2k basketball games into their own series...I won't be holding my breath though. We were losing College Hoops regardless, so maybe this is a good thing in the long run for that...for the NBA game it's a little harder to spin in a positive light.

[DaddyTorgo]

ugh.

GTA under the EA umbrella *vomit* I can see that now. It would make a horrible sanitized game

[Groundhog]

Man, we're going to be down to just Activision, or Activision Blizzard whatever it's called now and EA, with nobody else even in the running.

Too bad though, but Take Two has just had problem after problem lately so probably a good deal for them, and a good deal for EA.

We can only hope that they incorporate a large amount of people from the teams working on the 2k basketball games into their own series...I won't be holding my breath though. We were losing College Hoops regardless, so maybe this is a good thing in the long run for that...for the NBA game it's a little harder to spin in a positive light.

I don't know about that. Best case scenario would be EA taking onboard 2K's sports development teams and combining it with EA's cash and making some pretty awesome sports titles.

Worst case, and the more likely case IMO, is that the 2K guys get absorbed in to the EA machine and we don't notice a single difference. Well, outside of the fact that we won't get an NBA 2Kx either.

[Radii]

ugh.

GTA under the EA umbrella *vomit* I can see that now. It would make a horrible sanitized game

with college hoops already dead this is what upsets/worries me the most about all of this. ugh :(

[Eaglesfan27]

I just read this article on OS in which Take Two has apparently already rejected EA's offer:


NEW YORK--(BUSINESS WIRE)--The Board of Directors of Take-Two Interactive Software, Inc. (NASDAQ:TTWO - News) today confirmed that it has received an unsolicited proposal from Electronic Arts Inc. (NASDAQ:ERTS - News) to acquire Take-Two for $26.00 per share in cash. Take-Two’s Board of Directors has thoroughly reviewed EA’s unsolicited proposal with the assistance of its independent financial and legal advisors and concluded that the proposal is inadequate in multiple respects and not in the best interests of Take-Two’s stockholders.

After careful evaluation, the Board has determined that EA's proposal substantially undervalues Take-Two’s robust and enviable stable of game franchises, exceptional creative talent and strong consumer loyalty. We believe EA's unsolicited offer is highly opportunistic and is attempting to take advantage of our upcoming release of Grand Theft Auto IV, one of the most valuable and durable franchises in the industry. Furthermore, the offer values the Company at a significant discount to its public peers and does not compensate Take-Two for its intrinsic value and the substantial synergies that the proposed combination would create.

Strauss Zelnick, Executive Chairman of the Board of Take-Two commented, “Electronic Arts’ proposal provides insufficient value to our shareholders and comes at absolutely the wrong time given the crucial initiatives underway at the Company. Thanks to the extraordinary efforts of our creative and business teams, Take-Two has made enormous strides in the past 10 months toward our common goal of being the most creative, innovative and efficient company in our industry. We're extremely proud of our unique portfolio of game franchises, exceptional creative talent and loyal consumer following. Our Board believes that we will build greater value for our stakeholders by remaining relentlessly focused on our strategy and delivering on our mission of making the highest quality interactive entertainment."

Mr. Zelnick continued, “In addition to undervaluing key elements of our business, EA’s proposal fails to recognize the value we are building through our ongoing turnaround efforts, which will further revitalize Take-Two. While we have made substantial progress already, the turnaround of our business which we initiated in June is not yet complete, and we believe its benefits have not been recognized in either our current stock price or in the value of EA’s proposal."

Mr. Zelnick added, “While the Board believes that entering into discussions with EA at this time is not in the best interests of shareholders, we had offered to enter into a good-faith dialogue with EA to determine if our companies can reach common ground on the appropriate value of Take-Two as a first step to realizing a mutually beneficially transaction. However, given the great importance of the Grand Theft Auto IV launch to the value of Take-Two, the Board has determined that the only prudent and responsible course for our Company and its stockholders is to defer these discussions until immediately after Grand Theft Auto IV is released. Therefore, we offered to initiate discussions with EA on April 30th, 2008 (the day after Grand Theft Auto IV is scheduled to release). We believe this offer demonstrated our commitment to pursuing all avenues to maximize stockholder value, while we believe that EA’s refusal to entertain this path is evidence of their desire to acquire Take-Two at a significant discount, whereas we believe this value rightly belongs to our stockholders.”

Take-Two has a proven track record of creating and acquiring ownership of valuable new intellectual property. Grand Theft Auto is one of the industry’s top franchises, having sold more than 65 million units to date. Over the past year, Take-Two has continued to expand its owned intellectual property portfolio, with two new franchises established – BioShock, one of the highest rated games of all time and winner of numerous “Game of the Year” awards, which has sold over 2 million units to date – and Carnival Games, a casual game for the Wii™, which has sold over 1 million units to date. Take-Two’s other proven million-unit selling video game franchises include Midnight Club, Sid Meier’s Civilization, Bully, Red Dead Revolver, Max Payne, Rockstar Games presents Table Tennis, Manhunt, Red Dead Revolver, Mafia, The Darkness, Spec Ops, Sid Meier's Railroads! and Sid Meier's Pirates! Take-Two also has powerful and growing sports franchises, with licenses for leading brands, including Major League Baseball® 2K, NBA® 2K and NHL® 2K, and proprietary sports brands, such as Top Spin, All Pro Football and Don King Presents: Prizefighter. Additionally, Take-Two has a partnership with Nickelodeon to publish video games based on top rated Nick Jr. titles such as Dora the Explorer and Go, Diego, Go!

Ben Feder, Chief Executive Officer of Take-Two, commented, “The revitalization of Take-Two is well underway. In the last year, we have accomplished a great deal in terms of restructuring our cost base to improve margins, addressing the legacy issues that have weighed on our business, and enhancing our creative output through organic and external initiatives. We believe stockholders will reap the benefits of these actions both in the near and long term and that our efforts will create greater value for stockholders than what is being offered by EA at this time.”

As part of its turnaround plan, Take-Two has implemented a more streamlined and efficient operating structure, put in place a $25 million cost cutting initiative, instituted a disciplined Product Investment Review Process, restructured international operations to create a more efficient and responsive international organization, consolidated the majority of 2K Games and 2K Sports operations on the West Coast to increase efficiency and better support the growth of these labels, and sold its non-core Joytech business.

To continue to position itself for the future, the Company has begun to more aggressively leverage potential growth opportunities, with the acquisition of Illusion Softworks development studio and the formation of the 2K Play label to focus on the family and casual games market.

In addition, current management has secured a $140 million line of credit, announced a preliminary settlement of the “Hot Coffee” class action and made significant progress in resolving the New York District Attorney and SEC actions that have been pending against Take-Two since June 2006 and July 2006, respectively.

Mr. Feder concluded, "We remain committed to executing our existing business strategy and turnaround plans and to building value for all of our stockholders. We intend to vigorously resist any attempt by EA to acquire Take-Two at a price that does not adequately value our Company and its growth opportunities."

Bear Stearns and Lehman Brothers are acting as financial advisors to Take-Two and Proskauer Rose LLP is acting as a legal advisor.

This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval.

For more information, please visit http://www.transactioninfo.com/taketwo/.

[Calis]

I wonder if they're trying to setup a sale for after GTA4 comes out. That'd be a great time to push for a good price.

[bhlloy]

Good news for now, but EA has shown they do not mind paying over the odds to eliminate competition. I think if they really want 2k, they will pay whatever it takes to get them.

[Raiders Army]

What next, Solecismic is going to put out a card game under EA's banner?

[Mota]

I can see a "EA Console" in the works.

F'n EA!!!!!!!! :mad:

That's exactly what I was thinking. Once they have Take Two in their wings and complete the purchase of Ubisoft at a later date, all of a sudden the new "EA Console" becomes very attractive and they could very likely shut the 1st Party console makers out of the business.

I view this much like Invasion of the Body Snatchers. One day one of your friends (Bioware) disapears and you don't really notice. Then a couple more friends come by with this emotionless vacant stare in their eyes. Then next thing you know it's just you left playing your PS3 or 360 and everybody else has been brainwashed into the only console where you can play Mass Effect 4 & GTA8 (yes because there will be a new version every 6-12 months), and NBA Live 010 (because the 2K series was cancelled). All of which will suck, because EA is a homogenized corporate entity, not a game maker. And you're sitting there wondering "WHAT THE HELL HAPPENED?".

They've proven to us that if you treat your workers like a factory line, they will produce product that is void of any inspiration. The prospect of them taking an even bigger portion of the market is quite frightening and very unhealthy.

[Schmidty]

Yet another reason proving how much consoles suck balls.

[MizzouRah]

Yet another reason proving how much consoles suck balls.

I wouldn't mind PC games coming back, but I don't regret any of my console purchases.. present or past.

[MizzouRah]

That's exactly what I was thinking. Once they have Take Two in their wings and complete the purchase of Ubisoft at a later date, all of a sudden the new "EA Console" becomes very attractive and they could very likely shut the 1st Party console makers out of the business.

I view this much like Invasion of the Body Snatchers. One day one of your friends (Bioware) disapears and you don't really notice. Then a couple more friends come by with this emotionless vacant stare in their eyes. Then next thing you know it's just you left playing your PS3 or 360 and everybody else has been brainwashed into the only console where you can play Mass Effect 4 & GTA8 (yes because there will be a new version every 6-12 months), and NBA Live 010 (because the 2K series was cancelled). All of which will suck, because EA is a homogenized corporate entity, not a game maker. And you're sitting there wondering "WHAT THE HELL HAPPENED?".

They've proven to us that if you treat your workers like a factory line, they will produce product that is void of any inspiration. The prospect of them taking an even bigger portion of the market is quite frightening and very unhealthy.

World Console Domination! :D

[Schmidty]

I wouldn't mind PC games coming back, but I don't regret any of my console purchases.. present or past.

I don't begrudge anyone their consoles, it's just that consoles are killing PC gaming, and to me, PC gaming is much better because it isn't so limited.

[Big Fo]

I don't begrudge anyone their consoles, it's just that consoles are killing PC gaming, and to me, PC gaming is much better because it isn't so limited.

I think piracy is a bigger reason than the growth of the console market. And also PC gaming isn't dying.

[SackAttack]

I don't begrudge anyone their consoles, it's just that consoles are killing PC gaming, and to me, PC gaming is much better because it isn't so limited.

Yeah, and it's really great how you can have five different PC owners and five different quality-of-play experiences with the same game, isn't it?

[Groundhog]

Yeah, much worse than 3 console owners, with each owner having several titles that none of the other two can play.

[Buccaneer]

Yeah, it's great how you can avoid pirating games but are locked into a limited gameplay with minimal controls.

[sooner333]

I used to love PC gaming. Then I realized that I needed to buy a new graphics chip all of the time...then a new computer, and then I realized that I was a teenager and didn't have money to do all of that and I gave up and got an Xbox. Now I'm a 360 owner and won't go back.

[Atocep]

I just read this article on OS in which Take Two has apparently already rejected EA's offer:


The sale is still expected to happen, one way or another.

http://www.gamespot.com/news/6186640.html?action=convert&om_clk=latestnews&tag=latestnews;title;3

Earlier today, Electronic Arts went public with the news that it had offered to acquire Take-Two Interactive for nearly $2 billion--and that Take-Two management had turned the offer down. EA's offer broke down to $26 per share for Take-Two, a 64 percent premium over the stock's price of $15.83 at the time the offer was made.

Speaking with GameSpot today, Wedbush Morgan Securities analyst Michael Pachter questioned Take-Two's judgment in turning down the deal.

"The share price on Friday tells you that investors think the share price is $17. So an offer of $26 by definition is more than adequate," Pachter said. "And if the only argument management makes is that they have a turnaround plan and to give them time...It could take two or three years for them to get [the stock price] to that same $26. Who in their right mind thinks $26 three years from now is better than $26 today? This is a bird in the hand."

Despite the rebuff, Pachter predicted the acquisition will happen one way or the other. If the board of directors won't sell the company, he said EA can perform a hostile takeover, buying up enough shares on the open market to gain control of the company and show the current management team the door.

"By going public, EA is telling you, 'This deal is happening.' The only way you can credibly reject the deal is if there's a better one behind it," Pachter said. "I don't see how anyone can afford to pay this much or more for the stock."

More so than Take-Two's hit properties like Grand Theft Auto IV and BioShock, Pachter believe sports are the driving motivation behind the deal, and a main reason he doesn't expect other acquiring suitors to come calling. The economic advantages of eliminating 2K Sports--EA Sports' primary competitor in the market--are so great that they could pay for the $2 billion deal on their own, Pachter said.

"There's only one company that can make sense out of an acquisition of Take-Two, and that's EA," Pachter said. "For anyone else to buy Take-Two, they'd have to decide either to bloody themselves competing in sports against EA, or shut down the sports business and give up. Either way, there aren't many people who are going to pay a premium for the right to engage with EA or shut down that business."

One question mark about an acquisition of Take-Two is how much of the company can actually be transferred to EA. Pachter said key development personal like Firaxis' Sid Meier, 2K Boston's Ken Levine, and Rockstar's Sam and Dan Houser likely have change-of-control clauses in their contracts that would allow them to jump ship if ownership of the business changes hands.

"If any of the people under employment contracts with Take-Two have lawyers who are worth anything, there are change-of-control provisions," Pachter said. "They all should have that, but I don't think this deal is about retention of employees. With the [possible] exception of the Rockstar North guys, I think all of the [contracted] employees at Take-Two would actually welcome working for EA. I think Sid Meier would love to see Civilization have broader distribution and more focused marketing, and EA is really good at both."

[SackAttack]

Yeah, much worse than 3 console owners, with each owner having several titles that none of the other two can play.

And that's different from PC gaming how? Gosh, you have a Windows 98 user, a Windows XP user, and a Windows Vista user. Each of them have games that won't run on the other's OS! Difference is? The Win98 and WinXP users could upgrade to the OS above what they've got, and *still* have difficulty running the games.

Yeah, it's great how you can avoid pirating games but are locked into a limited gameplay with minimal controls.

See, I know you're being snarky there, but depending on the segment of the market you're talking about, those actually *are* selling points. Do you want to fool with PC licenses, CD keys or "Find the 7th word on page 29" style copy-protection, or would you prefer to just drop the disc in the tray?

Do you want to spend 30 minutes installing a game, or would you prefer to be playing it within minutes of opening the package?

Now, like I say, different markets...but the publishers are going to follow the money, and the money pretty overwhelmingly disagrees with a fractured architecture and encumbersome copy protection, if the ubiquitous "Console Numbers" threads are any indication.

[Schmidty]

Yeah, and it's really great how you can have five different PC owners and five different quality-of-play experiences with the same game, isn't it?

If you're speaking of cost issues and people being "left behind" technology-wise, the point rings hollow, especially with the price of modern consoles.

In order to play modern PC games at the level of consoles, you would have to spend (approx) $200 on a video card and $300 on a motherboard and processor. And that's assuming your comuter is 2-3 years behind. That's about the same as the cost of a current console (with accesories), but PC's are MUCH more customizable, tweakable, and useful for more than just games.

The cost is similar if you build your own PC (which is like putting together Legos). AND you get MUCH more of your moneys worth.

In essence - There is no excuse, other than laziness and stupidity, to assume that consoles are better than PCs. Of course the Wii is different, but that's it.

[SackAttack]

If you're speaking of cost issues and people being "left behind" technology-wise, the point rings hollow, especially with the price of modern consoles.

In order to play modern PC games at the level of consoles, you would have to spend (approx) $200 on a video card and $300 on a motherboard and processor. And that's assuming your comuter is 2-3 years behind. That's about the same as the cost of a current console (with accesories), but PC's are MUCH more customizable, tweakable, and useful for more than just games.

I wonder how much it would cost to play Crysis on a PC 2-3 years behind the times? Hm.

Say, look, the Xbox 360 just turned 2. I wonder how much it would cost to upgrade it to play BioSho--oh, what's that? You don't have to?

That's the fundamental difference I'm pointing to. Any Xbox 360 game that comes out, any Xbox 360 owner can play.

On the other hand, any given PC game doesn't necessarily share the same accessibility for the entire market. Some people are obsessive enough about their rigs that minimal upgrading is necessary, while others will upgrade only for very specific titles.

The point being, anybody who's getting "left behind" is probably not the kind of person who's going to be on the bleeding edge in the PC market to begin with. It might cost them essentially the same to upgrade their computer as to buy a console, but it might also cost them much more - particularly if they go the "good enough" route on upgrades and find themselves upgrading again in 18-24 months.

The cost is similar if you build your own PC (which is like putting together Legos). AND you get MUCH more of your moneys worth.

In essence - There is no excuse, other than laziness and stupidity, to assume that consoles are better than PCs. Of course the Wii is different, but that's it.

Shrug. I dunno. I don't have to worry about my Xbox 360 controller being compatible with Mass Effect but not Overlord.

I have reasonable means of trying new games before I splash the cash on them - rental or borrowing - that wouldn't necessarily be available to me on the PC.

I don't have to worry about driver issues with video cards preventing my games from displaying.

Is that stupid, Schmidty, or is it practical? Is seeking the most consistent gaming experience laziness, Schmidty, or judicious use of limited entertainment resources?

I know where I stand.

[darkenigma510]

The MLB License currently only is exclusive to 3rd party games which is why Sony can do the Show. Of course, EA could come up with the money to expand it if they decided they wanted to increase the profit margin of MLB 2k.

Unfortunately, if this goes through, I think it is the end of NBA 2k as you said because LIVE is their main brand :(

Couldn't Sony just say, sorry EA, no EA baseball game for the PS3?

[Cringer]

This sucks. :(

[kingnebwsu]

EA will own all and will have even more control over everything that all the console manufacturers do.

Madden 2009 coming out in August for $70 on all systems?
All of the EA sports games having zero competition and continuing their downward spiral into mediocrity?
EA-Activision-Blizzard-Ford merger in 2013? ;)

Seriously, this sucks.

[RainMaker]

Just crappy news for the gaming community.

[Northwood_DK]

Not sure if this have already been posted.

Take Two also sent GamePolitics the text of a series of letters between Zelnick and EA CEO John Riccitiello

http://gamepolitics.com/2008/02/24/breaking-take-two-fires-back-at-ea/

[RedKingGold]

One quick note:

I'm not sure if MLB's license would transfer over from Take Two. I'm sure there would be something in the licensing agreement which would void the deal upon ownership transfer (or at least trigger renegotiations).

[Mizzou B-ball fan]

One quick note:

I'm not sure if MLB's license would transfer over from Take Two. I'm sure there would be something in the licensing agreement which would void the deal upon ownership transfer (or at least trigger renegotiations).

That's correct. There's a pretty likely scenario where the entire 2K group would be able to jump ship as well as mentioned in the previously posted article. I'm sure that Sid Meier would also jump ship as he wants nothing to do with EA.

[Marc Vaughan]

An interesting aside to the debate for people who like corporate scandals ..

http://seekingalpha.com/article/65919-electronic-arts-take-two-s-bizarre-love-triangle

from the article:



This is where it gets good, and I’m somewhat paraphrasing from the filings:

The shares won’t vest immediately if, prior to the company’s annual meeting, which is expected to be before April 1, the Company received a bona fide indication of interest in, or offer to enter into, a business combination (which it did); the offer specifies, with some degree of particularity, the material terms (which it may have) and (my favorite) the offer’s existence hasn’t been publicly disclosed or confirmed by either company before Take-Two’s annual meeting. (Oops, definitely happened.)

That’s right: Take-Two received a rich and serious offer from a substantial company. It didn’t disclose the offer, and hoped to keep it secret until at least after the annual meeting, when investors might have challenged the compensation package and attempts by the company to block the deal. Then, in a public filing, Take-Two in effect threatened EA not to make the offer public by giving ZelnickMedia a chance to enrich itself, at the expense of shareholders, by granting restricted stock that will vest immediately if EA made the deal public.

[RedKingGold]

An interesting aside to the debate for people who like corporate scandals ..

http://seekingalpha.com/article/65919-electronic-arts-take-two-s-bizarre-love-triangle

from the article:

Heh, I sense some litigation a-foot.

Quick legal lesson: Once another company makes a "hostile" takeover bid (i.e., public offer from a company to purchase shareholder stock at a price well above market value), that company attempted to be taken over has a duty to do what's best for its stockholders (these are known as "Revlon" duties) by finding the best deal (aka, putting up the company for auction).

If this is proven to be true, then Take Two is in for a world of hurt for not doing what's best for its stockholders.

[Marc Vaughan]

If this is proven to be true, then Take Two is in for a world of hurt for not doing what's best for its stockholders.
Thats what I thought would be the case - also from a 'takeover' perspective it adds pressure for them to accept any future offer by EA ...

(as getting an improved offer might get them off the hook by 'proving' the shareholders benefitted from their earlier decision?)

[Kodos]

Ping: PC game lovers

PC gaming suxxxx!

[wade moore]

I'm one of those that sees the purpose behind both. There are games (Sports for instance) that I don't really like playing on the PC and games (FPS's for instance) that I don't like playing on the console.

Sadly, the PC market appears to be dying a slow, painful death.

[Marc Vaughan]

Ping: PC game lovers

PC gaming suxxxx!

Ping - some genre's are more suited to PC gaming than others.

For example heavy strategy games such as FM work best on the PC because of the complexity of the control system and the myriad of options available.

Similarly MMO's haven't successfully transferred from PC to console as yet ...

I agree certain genre's are now almost defunct upon the PC platform, but as a platform itself (in the UK at least) its effectively STILL the second biggest platform around - despite constant reports of its demise.

[Buccaneer]

Do you want to fool with PC licenses, CD keys or "Find the 7th word on page 29" style copy-protection, or would you prefer to just drop the disc in the tray?

In order to discourage piracy, that is a very willing trade-off.

Do you want to spend 30 minutes installing a game, or would you prefer to be playing it within minutes of opening the package?

I have a longer attention span and also have lots of patience. Getting a PC game installed will be worth it, esp. when a single game of Civ4 can last 20-40 hours for me. Or a single FBCB or OOTP career can last for months.

For example heavy strategy games such as FM work best on the PC because of the complexity of the control system and the myriad of options available.

I would also add that a mouse-keyboard control for FPS action games is far superior in terms of controls, precision and flexibility.

[Icy]

For myself, that own a PC, a PS2, a PS3 and a PSP, i can't see any advantage of console gaming over PC, as because my job (and i'll admit it, because i'm a geek), i have always a top end PC and renew it every 6 months or so.

By now, i haven't sen any "next gen" game with better graphics than a PC one using the max visual settings, in fact i'm really disappointed with 99% of the so called "next gen graphics" in new console games. Also i really miss a mouse in the consoles to navigate menus, and a keyboard to type text.

Of course we better don't talk about mods/customization where PC games shine and it's non existent at all in consoles.

What is the real advantage of a console over a PC? not the graphics (in a top PC) and not the controller (you can use console controllers in PC's), the main advantage is the "turn on, insert disc and play" without having to upgrade your pc every year, without stupid crashes to desktop, hardware incompatibilities, etc. Advanced PC users don't care about it, but the average gamer cares a lot and that is why consoles are taking over PC gaming.

Give me a customizable game in a top end PC over any "next gen console", and it applies for FPS, RPG, sport games, strategic games etc. Sadly i'm not the average gamer.

[Icy]

I would also add that a mouse-keyboard control for FPS action games is far superior in terms of controls, precision and flexibility.

Totally agree, i can't stand playing FPS without a keyboard and mouse, i suck at right gamepad joystick aiming.

[Kodos]

Ping - some genre's are more suited to PC gaming than others.

For example heavy strategy games such as FM work best on the PC because of the complexity of the control system and the myriad of options available.

Similarly MMO's haven't successfully transferred from PC to console as yet ...

I agree certain genre's are now almost defunct upon the PC platform, but as a platform itself (in the UK at least) its effectively STILL the second biggest platform around - despite constant reports of its demise.


I was just providing a counterpoint to Bucc and Schmidty. ;)

[Kodos]

As a console gamer, I can't imagine playing an action game with a mouse and keyboard. It sounds awful.

[Eaglesfan27]

That's correct. There's a pretty likely scenario where the entire 2K group would be able to jump ship as well as mentioned in the previously posted article. I'm sure that Sid Meier would also jump ship as he wants nothing to do with EA.

Some analysts are predicting that Sid would love to work with EA's marketing as he has always wanted more exposure for the Civ series. Hard to say what he would do.

[lordscarlet]

I have it solved. I just don't play PC or Console games. :) I'm fine with the occasional web-based game (which is only a step above a text game in most cases)

[Coder]

I don't know all the rules and laws and whatnots, but if this goes through, wouldn't EA have a monopoly, and isn't that illegal?

[Eaglesfan27]

Take Two's stock shot up almost 9 dollars today. While this news is horrible for me as a fan, it's not bad for me as a stock owner.

[Mizzou B-ball fan]

Some analysts are predicting that Sid would love to work with EA's marketing as he has always wanted more exposure for the Civ series. Hard to say what he would do.

That would work until EA started telling Sid how to make his game (as they do with most franchises). I'm sure our friend Jim G. could help out with the pros/cons of that discussion. :)

[Eaglesfan27]

That would work until EA started telling Sid how to make his game (as they do with most franchises). I'm sure our friend Jim G. could help out with the pros/cons of that discussion. :)

Well, some analysts think that Sid has enough influence that EA would give him resources and leave him alone to do his thing, and I think they might be right. Shrug.

[cartman]

Since Sid >>> Will, and Mr. Wright has had pretty much free reign to develop unconstrained, I'm sure that Mr. Meier would be given wide latitude as well.

[Mizzou B-ball fan]

Well, some analysts think that Sid has enough influence that EA would give him resources and leave him alone to do his thing, and I think they might be right. Shrug.

We can hope that's the case if he does end up at EA. We'd have to organize a FOF militia to take over EA headquarters if they managed to f-up the Civ franchise.

[Wolfy]

We can hope that's the case if he does end up at EA. We'd have to organize a FOF militia to take over EA headquarters if they managed to f-up the Civ franchise.

Too late, Civ Lite is already on the way. Might as well sell the corpse to EA and move on.

[Honolulu_Blue]

I don't know all the rules and laws and whatnots, but if this goes through, wouldn't EA have a monopoly, and isn't that illegal?

A monopoly in what exactly? The key question in determining whether a company has a monopoly is market definition. I don't think even after the acquisition EA would be said to have a monopoly over any discernable antitrust market. I doubt regulators would define a market as narrow as, say, professional sports video games for consoles.

[Big Fo]

PC/console flame wars are so boring, both of them rock. Save your vitriol for EA.

[Malificent]

Since Sid >>> Will, and Mr. Wright has had pretty much free reign to develop unconstrained, I'm sure that Mr. Meier would be given wide latitude as well.

I'm actually pretty sure Will > Sid, at least for EA. The Sims alone pretty much dominated the PC game market for a while, whereas Civ, in the later years, is successful, but not Sims sort of successful. I still think it is possible they would give free reign to Sid. Just think that Will Wright is probably the biggest individual money maker they have (in terms of developers).

[Mizzou B-ball fan]

Oh dear. This thing is going to get nasty. Looks like the Take Two people are trying to rob the shareholders blind via this deal.............

http://blogs.marketwatch.com/greenberg/2008/02/take-two-twist-interesting-timing-of-rejection/

[Passacaglia]

Take Two's stock shot up almost 9 dollars today. While this news is horrible for me as a fan, it's not bad for me as a stock owner.

I guess that's what happens when I wait three days (until a few moments ago) to think, "hey, wouldn't that make their stock a good buy?"

[BrianD]

Oh dear. This thing is going to get nasty. Looks like the Take Two people are trying to rob the shareholders blind via this deal.............

http://blogs.marketwatch.com/greenberg/2008/02/take-two-twist-interesting-timing-of-rejection/

I'm confused by all the outrage here (not just by you Mizzou). Isn't this a pretty standard takeover defense? Companies structure contracts and bonuses to coincide with takeover offers. This both protects the highest levels of management and it devalues the company such that the takeover becomes much more costly. I would think that most public companies would have these measures in place.

[BrianD]

Take Two's stock shot up almost 9 dollars today. While this news is horrible for me as a fan, it's not bad for me as a stock owner.

This isn't terribly surprising. If EA is going to value the stock at $26 with their offer, buying stock at any level below that will be an instant win if the deal does go through. Stocks generally rise to the takeover offered price and then slowly drop down if the takeover doesn't take place. If you do own stock already, I'd give serious thought to selling around $26 as it probably won't go higher...unless you really want the EA stock it may become.

[Kodos]

I read somewhere that Take 2 probably wants an offer of around $33.

[Logan]

You also have people out there who have shorted the stock who are buying back to cover.

[CraigSca]

Shoot me for this because this is a direct cut and paste from Bill Harris' blog, but man is this interesting:

According to an 8-K filing with the SEC, on February 14 (coincidentally the day before rejecting EA’s first offer, which had been made on February 6) Take-Two proposed several changes to its management deal with ZelnickMedia, whose top execs run Take-Two.

They include:
–Boosting ZelnickMedia’s monthly pay to $208,333 from $62,500 per month.
–Boosting the annual bonus to $2.5 million from $750,000.
–A grant of 600,000 shares of restricted stock that will vest over three years unless the company is acquired, in which case they’ll vest immediately.

This is where it gets good, and I’m somewhat paraphrasing from the filings:
The shares won’t vest immediately if, prior to the company’s annual meeting, which is expected to be before April 1, the Company received a bona fide indication of interest in, or offer to enter into, a business combination (which it did); the offer specifies, with some degree of particularity, the material terms (which it may have) and (my favorite) the offer’s existence hasn’t been publicly disclosed or confirmed by either company before Take-Two’s annual meeting. (Oops, definitely happened.)

That’s right: Take-Two received a rich and serious offer from a substantial company. It didn’t disclose the offer, and hoped to keep it secret until at least after the annual meeting, when investors might have challenged the compensation package and attempts by the company to block the deal. Then, in a public filing, Take-Two in effect threatened EA not to make the offer public by giving ZelnickMedia a chance to enrich itself, at the expense of shareholders, by granting restricted stock that will vest immediately if EA made the deal public.

Maybe I'm crazy, but I don't see how paying a 60% premium over the current stock price for Take-Two "undervalues" anything. And beyond that, EA accountants will have to wear hazmat suits when they look at the books.

[Eaglesfan27]

This isn't terribly surprising. If EA is going to value the stock at $26 with their offer, buying stock at any level below that will be an instant win if the deal does go through. Stocks generally rise to the takeover offered price and then slowly drop down if the takeover doesn't take place. If you do own stock already, I'd give serious thought to selling around $26 as it probably won't go higher...unless you really want the EA stock it may become.

It's now gone up well over 9 dollars today, up to 26.46 this afternoon. I'm usually a long term sort of guy, but this is a very interesting decision. I bought these shares back when it was around 15 dollars/share.

Edit: It is now 26.89. Hmm.

[Kodos]

Sell!

[sabotai]

Bulls make money! Bears make money! Pigs get SLAUGHTERED!

[Kodos]

Panic! Do something -- ANYTHING!!!

[Buccaneer]

Panic! Do something -- ANYTHING!!!

Oh, oh, I know, let's get the federal government involved.

[Atocep]

Oh, oh, I know, let's get the federal government involved.

Has there been steroid accusations?

[Galaxy]

Did make me go Jim Kramer on your ass!

[Mota]

Letter from EA to T2 on Feb 19th...

"Thank you for your letter of February 15, 2008. While I appreciate its courteous tone and value our ongoing dialogue, I am disappointed that you have rejected Electronic Arts Inc.’s (“EA’s”) $25 per share cash offer to acquire Take-Two Interactive Software, Inc. (“Take-Two”) and declined to engage in the friendly negotiations we proposed."

I like how he throws around the word FRIENDLY. That doesn't sound very friendly to me. Sounds more like a bully in the playground.

[Groundhog]

"Playground Bully" sums up EA nicely IMO.

[kingnebwsu]

And how many school officials ever stopped the "playground bully"?

That's why EA will continue to gobble up companies until they own pretty much everything.

David Hayter would say, "E-A-Sucks. If it's not for sale, they'll buy it anyway... (rated T for Terrible)."

[Mizzou B-ball fan]

In a shocking development (sarcasm off), Michael Pachter confirms that EA's main purpose is to secure the 2K Sports franchises and remove them from play. Pachter statest that GTAIV is only gravy on top and is not EA's main target in the acquisition.

http://kotaku.com/360452/pachter-ea-wants-take+two-for-sports-gtaiv-is-gravy

[Kodos]

It'd be great if some deep-pockets company like Microsoft bought Take Two to compete with EA. But then they're probably afraid EA will stop putting games on the 360 if they do that...

[rkmsuf]

Take the two billion fools. Who cares about the stupid 2k franchise. You are rich, beotches.

[SackAttack]

It'd be great if some deep-pockets company like Microsoft bought Take Two to compete with EA. But then they're probably afraid EA will stop putting games on the 360 if they do that...

Microsoft essentially killed their sports division for that very reason - to keep EA happy. Couple of the franchises, such as Top Spin, wound up joining the 2K label. So did Links Golf, I thought, but 2K never did anything with it.

The others just...blew away like dust in a desert wind.

[Mizzou B-ball fan]

Interesting development that had been mentioned as a possibilities. The FTC is now investigating the possible merger between EA and Take Two. Some are wondering the FTC will even allow the merger to take place even if a deal is reached.........

http://gamepolitics.com/2008/04/17/federal-trade-commission-digging-deeper-into-eas-t2-takeover-bid/

[SFL Cat]

I wouldn't be so quick to poo-poo anti-trust dangers for EA.

[Honolulu_Blue]

Interesting development that had been mentioned as a possibilities. The FCC is now investigating the possible merger between EA and Take Two. Some are wondering the FCC will even allow the merger to take place even if a deal is reached.........

http://gamepolitics.com/2008/04/17/federal-trade-commission-digging-deeper-into-eas-t2-takeover-bid/

That's the FTC, not FCC.

These types of document/data requests (called "Second Requests") occur in about 5% of all mergers. It doesn't mean the deal will get blocked by the FTC, but just that they will be taking a closer look at things.

The big question in all of this will be market definition. If the FTC determines that there is a separate market for "pro football" games for consoles or "pro basketball' or "pro hockey", then the merger could potentially be blocked.

EA will, of course, argue that such a market definition is far too narrow and that games like Madden football compete with all other video games, console and PC, and they will probably even make the argument that they compete with DVDs and the like for consumer's dollars.

I haven't followed Take Two's sports titles all that closely, but I know EA has an exclusive licenese with the NFL (and maybe MLB? Or any other pro sports leagues?). Has there been any years were Madden was the only "pro football" game released for consoles? If so, that would be a very good natural experiment for market definition. If there was a year (or years) where Madden was it, the FTC could compare prices in those years against prices in years were Take Two published a competing game. If the prices were considerably different (5-10% or so) in the years where Madden was the only game in town, the FTC could likely determine that it is a separate market. If Madden's price was still the same, EA will argue that it was because it competes with all other video games and if they raised prices, consumers would just go buy something.

There are a number of other arguments, but as an antitrust lawyer and a video game fan, this would be pretty interesting to see how it all plays out.

[Mizzou B-ball fan]

That's the FTC, not FCC.

Thanks for the correction. Posted that AWFULLY early. :)

FYI......here's the article concerning the details in case you're interested.......

http://blog.newsweek.com/blogs/levelup/archive/2008/03/31/could-the-ftc-block-electronic-arts-bid-to-acquire-take-two.aspx

[flere-imsaho]

I'm still trying to wrap my head around the idea that Take Two is worth $2 billion while Facebook is worth $15 billion.

[Logan]

Short and simple...Take Two's customers buy video games, Facebook's customers buy everything.

[SackAttack]

I haven't followed Take Two's sports titles all that closely, but I know EA has an exclusive licenese with the NFL (and maybe MLB? Or any other pro sports leagues?). Has there been any years were Madden was the only "pro football" game released for consoles? If so, that would be a very good natural experiment for market definition. If there was a year (or years) where Madden was it, the FTC could compare prices in those years against prices in years were Take Two published a competing game. If the prices were considerably different (5-10% or so) in the years where Madden was the only game in town, the FTC could likely determine that it is a separate market. If Madden's price was still the same, EA will argue that it was because it competes with all other video games and if they raised prices, consumers would just go buy something.

EA holds the exclusive rights to the NFL. Take-Two has "exclusive third-party" MLB rights.

What you see with Madden in terms of pricing, though, isn't higher prices once they held exclusivity, but almost certainly prices that don't drop as quickly because there's no competition to hold their feet to the fire.

[BrianD]

What kind of price drops do we expect out of a football game? Don't all football games enter the market at about the same price and drop at a similar point post-release? I know that the 2k football game was released at about half-price one year, but that seemed to be a one-time market grab.

[spleen1015]

What kind of price drops do we expect out of a football game? Don't all football games enter the market at about the same price and drop at a similar point post-release? I know that the 2k football game was released at about half-price one year, but that seemed to be a one-time market grab.

It was Take-Two's way of trying to gain market share. EA was threatened, so they bought exclusivity.

They probably would have continued with the low prices had EA not done that.

[Honolulu_Blue]

Thanks for the correction. Posted that AWFULLY early. :)

FYI......here's the article concerning the details in case you're interested.......

http://blog.newsweek.com/blogs/levelup/archive/2008/03/31/could-the-ftc-block-electronic-arts-bid-to-acquire-take-two.aspx

Thanks for the link. I agree with what the former FTC guy said (since it's pretty much what I said above. :) )

I think divestiture of a license or two could be possible (Though the FTC/DOJ haven't been too receptive of conglomerate type arguments). The question then, of course, is who buys it? You would need a developer and publisher talented enough and big enough to put out a game in 1-2 years that would be competitive with EA. Given all the consolidation going on the industry, that list is very, very small...

[SackAttack]

What kind of price drops do we expect out of a football game? Don't all football games enter the market at about the same price and drop at a similar point post-release? I know that the 2k football game was released at about half-price one year, but that seemed to be a one-time market grab.

They actually did that for two or three years, if I'm not mistaken. Certainly on the PS2 they did.

Madden followed suit right up until the time that EA bought exclusivity, at which point the price went right back up again. Not to a full $49.99, but certainly from $29.99 (or even $19.99 if they fully matched Take-Two's move) up to $39.99 or so.

[BrianD]

They actually did that for two or three years, if I'm not mistaken. Certainly on the PS2 they did.

Madden followed suit right up until the time that EA bought exclusivity, at which point the price went right back up again. Not to a full $49.99, but certainly from $29.99 (or even $19.99 if they fully matched Take-Two's move) up to $39.99 or so.

I'd like to disagree with this, but I'm not sure if I'm right. I recall buying NFL 2k4 at full price for myself and then buying NFL 2k5 for $19.99 for my Dad. Wasn't the whole point to not charge full price for "basically a roster update" as a further jab at EA?

[Eaglesfan27]

I'm almost 100% sure that it was a 1 year deal as well. I never tried ESPN 2k Football until 2k5, but they went with the 19.99 price and that was too good to pass up. Maybe they did a slightly reduced price in previous years, but nothing close to what they did with 2k5.

[SackAttack]

I'd like to disagree with this, but I'm not sure if I'm right. I recall buying NFL 2k4 at full price for myself and then buying NFL 2k5 for $19.99 for my Dad. Wasn't the whole point to not charge full price for "basically a roster update" as a further jab at EA?

It wasn't a "jab at EA." It was an attempt to steal market share from them after having the higher-rated game for 2 or 3 straight years and getting pummeled in sales.

Pretty sure 2k5 was the first one to do the $19.99 thing, 2k6 did the same thing (or possibly went to $29.99 instead), and then EA bought the exclusive licenses.

In either event, that was Xbox/PS2. I don't believe the 2K football series ever came even to Xbox 360.

[BrianD]

You don't think them saying that they were charging half price because it was mainly a roster update wasn't a jab at EA? That doesn't mean the main purpose wasn't to steal market share, but it sure seemed at the time like they were getting an extra jab as well.

[Buccaneer]

Short and simple...Take Two's customers buy video games, Facebook's customers buy everything.

Are you sure? I mean, just because you get lots of ads and lots of eyeballs doesn't necessarily mean that everything is being bought (i.e., real monies in exchanged for goods).

[stevew]

Madden used to drop to about 20 bucks once the season ended. Now it's still at 50 msrp.

[Logan]

Are you sure? I mean, just because you get lots of ads and lots of eyeballs doesn't necessarily mean that everything is being bought (i.e., real monies in exchanged for goods).

That's why I said it was simple :). For one, Take Two presumably has a ton of infrastructure that's costly. It also has major expenses that come with achieving their levels of revenue. Facebook probably doesn't have anything close to that. It also offers a user base that is heavily, heavily dominated by the demographics advertisers want to cater to, and also adds the benefit of being able to target ads to certain users based on the information that Facebook knows about the user.

[SackAttack]

You don't think them saying that they were charging half price because it was mainly a roster update wasn't a jab at EA? That doesn't mean the main purpose wasn't to steal market share, but it sure seemed at the time like they were getting an extra jab as well.

It's irrelevant. I guarantee you that, EA's game being a roster update or not, if the 2K series had been enjoying financial success in line with its critical merit, they never would have dropped the price.

If I exercise my rotator cuffs and my hand hits you in the face in the process, that doesn't mean I punched you.

[BrianD]

It's irrelevant. I guarantee you that, EA's game being a roster update or not, if the 2K series had been enjoying financial success in line with its critical merit, they never would have dropped the price.

If I exercise my rotator cuffs and my hand hits you in the face in the process, that doesn't mean I punched you.

I think I'm missing the point of your argument. You are saying that they dropped the price on the 2k series to gain market share but their comments of "we are selling the game for $19.99 because we don't believe it is right to charge full price for what is mainly a roster update" isn't a simultaneous jab at EA? Why can't it be both...and why would they use that as justification if not for the jab?

[Deattribution]

I think I'm missing the point of your argument. You are saying that they dropped the price on the 2k series to gain market share but their comments of "we are selling the game for $19.99 because we don't believe it is right to charge full price for what is mainly a roster update" isn't a simultaneous jab at EA? Why can't it be both...and why would they use that as justification if not for the jab?

I don't ever remember it being marketed like that because they put a ton of time into the presentation (which was better than anything madden has ever done), gameplay and the franchise for the 2k5 version.

[Mizzou B-ball fan]

The FTC lawyer over at the Level Up blog put up another write-up with some good information about the current FTC investigation into the merger.

http://blog.newsweek.com/blogs/levelup/archive/2008/04/23/law-and-short-of-it-another-hard-look-at-ea-take-two.aspx

[Phototropic]

I don't ever remember it being marketed like that because they put a ton of time into the presentation (which was better than anything madden has ever done), gameplay and the franchise for the 2k5 version.
I'd agree with that. There was a lot of hype (warranted) and buildup to the game with the features they were adding like the SportsCenter weekly segments and online leagues.

[SackAttack]

I think I'm missing the point of your argument. You are saying that they dropped the price on the 2k series to gain market share but their comments of "we are selling the game for $19.99 because we don't believe it is right to charge full price for what is mainly a roster update" isn't a simultaneous jab at EA? Why can't it be both...and why would they use that as justification if not for the jab?

I don't ever remember it being marketed like that because they put a ton of time into the presentation (which was better than anything madden has ever done), gameplay and the franchise for the 2k5 version.

What Deattribution said. It would have been one thing if they had released basically a roster update and then cut the price, but they didn't DO that. They advanced the franchise and slashed the price. Also, as far as jabs at EA go, think about it like this. If you're going to market and sell your game as less expensive because you're not going to soak your consumers like EA does, then why did the $19.99 price point for NHL, NBA and NFL only last for two seasons?

When the basketball and hockey games get released anymore, they don't come out at $19.99. They don't come out at $29.99. They don't even come out at $39.99. It's either $49 or $59, the industry standards.

A temporary price cut like that is more in line with a "grow the market share" perspective than a "zing the competition" perspective, because what happens once you return to the higher prices? You better have won a reasonably significant number of converts, or you're going to lose that market share right back.

[Mizzou B-ball fan]

A temporary price cut like that is more in line with a "grow the market share" perspective than a "zing the competition" perspective, because what happens once you return to the higher prices? You better have won a reasonably significant number of converts, or you're going to lose that market share right back.

Which is the real shame of it all. They converted a significant number of customers over to the franchise that year. As a result, Madden paid for the exclusive license to squash them out because they knew they were going to have significant problems from a competition standpoint.

[Honolulu_Blue]

Which is the real shame of it all. They converted a significant number of customers over to the franchise that year. As a result, Madden paid for the exclusive license to squash them out because they knew they were going to have significant problems from a competition standpoint.

Was it EA Sports or the NFL that wanted exclusivity?

[Mizzou B-ball fan]

Was it EA Sports or the NFL that wanted exclusivity?

The NFL had approached the companies in previous years with exclusive rights, but no one would bite due to the high price that the NFL was requesting for exclusive rights. EA didn't bite because they had a comfortable market lead. Only after the 2K series made significant in-roads in market share did EA decide to bite on the overpriced exclusive rights.

[SackAttack]

Which is the real shame of it all. They converted a significant number of customers over to the franchise that year. As a result, Madden paid for the exclusive license to squash them out because they knew they were going to have significant problems from a competition standpoint.

I don't know if converted is the right word. I sold an awful lot of copies of NFL 2k5 to people who were buying Madden anyway. They got more people to try the game, sure, but how many of those would have eschewed Madden if the prices went back up to $50 the next year? We'll never know.

[Kodos]

If we could get current gen graphics with ESPN 2k5 presentation and Madden old-gen gameplay, I'd be pretty damn pleased.

[Mizzou B-ball fan]

Thankfully, it appears that EA is now giving up on acquiring Take Two........

Gamasutra - EA: 'We Are Stepping Away' From Take-Two (http://www.gamasutra.com/php-bin/news_index.php?story=19883)

[Kodos]

Woot!

[Radii]

Well that is certainly a pleasant suprise. I wonder if it could possibly bring about a revival of the college hoops series?

[Eaglesfan27]

My favorite mbbf post ever.

[Deattribution]

Well that is certainly a pleasant suprise. I wonder if it could possibly bring about a revival of the college hoops series?

Unlikely, the cancellation of that game didn't have anything to do with EA, it was due to the abysmal sales of the game (something like 130k I think), especially compared to the EA franchises (all 500k+ or so).

[Mizzou B-ball fan]

My favorite mbbf post ever.

Ah well, we agree on a few things. :)

[Eaglesfan27]

Unlikely, the cancellation of that game didn't have anything to do with EA, it was due to the abysmal sales of the game (something like 130k I think), especially compared to the EA franchises (all 500k+ or so).


There is also a rumor floating out there that EA raised their bid on the rights deal. They didn't buy exclusivity, but they raised the bar too far for it to be profitable for 2k to match with those sales numbers which actually were closer to 200k the last time I looked.

[Radii]

Unlikely, the cancellation of that game didn't have anything to do with EA, it was due to the abysmal sales of the game (something like 130k I think), especially compared to the EA franchises (all 500k+ or so).

Well shit, maybe we all need to go out and buy 500 copies? :D

[Galaxy]

Thankfully, it appears that EA is now giving up on acquiring Take Two........

Gamasutra - EA: 'We Are Stepping Away' From Take-Two (http://www.gamasutra.com/php-bin/news_index.php?story=19883)

EA may be dropping the bid, but they are still looking at some sort of deal. I believe the CEO of Take Two is looking to make a presentation to EA, once they sign non-disclosure agreements.

[sooner333]

It's too bad about the CH series, but last year's game was pretty darn good and with downloadable rosters, I'm sure someone will come out with updated rosters for this season.

It's really too bad that it seems that none of the games that were the best in their sport won the rights battle. MLB 2k won, but it was inferior to MVP. And the EA games that won were usually worse than their counterparts (except NCAA football, which didn't really have a counterpart).

[Big Fo]

There go my dreams for a Sid Meier's Alpha Centauri sequel.

[JonInMiddleGA]

Electronic Arts drops bid for Take-Two - U.S. business - MSNBC.com (http://www.msnbc.msn.com/id/26709023)

NEW YORK - Video game publisher Electronic Arts Inc. said Sunday it ended talks to buy smaller rival Take-Two Interactive Software Inc., best known for the "Grand Theft Auto" series of games.

EA, the publisher of games such as "Madden NFL 09" and "Spore," said it decided not to make an offer to buy Take-Two.

Redwood City, California-based EA had signed a non-disclosure agreement with Take-Two in August after letting a deadline for a $2 billion tender offer to buy the company expire.

"EA is tracking toward a record-breaking year," said President and Chief Executive John Riccitiello, in a statement. Spokesman Jeff Brown said Sunday EA is "not at all" disappointed that things didn't work out.

Brown did not say what prompted EA to walk away from the discussions, but he said the company is confident in its own product portfolio. Take-Two, he added, was "never something EA needed."

Since making its offer public in February, EA has maintained that it was offering a "fair and full" price for New York-based Take-Two. And while keeping the total price of the bid at $2 billion, it lowered the original $26-per-share offer to $25.74 to account for restricted shares granted to Take-Two's management.

Take-Two, meanwhile, said the offer undervalued the company, and repeatedly rejected it.

While many analysts expected EA to eventually raise its offer by a dollar or two, recently Take-Two shareholders seemed less optimistic. On Friday, the company's shares were trading at their lowest since Feb. 22, the last trading day before EA made its offer public and sent Take-Two's shares shooting up 55 percent.

Take-Two Chairman Strauss Zelnick said Sunday the company remains focused in creating value for its shareholders and customers, and has been since EA first launched its hostile bid six months ago.

Now, he added in a statement, the company remains "actively engaged in discussions with other parties in the context of our formal process to consider strategic alternatives."

A Take-Two spokesman said Sunday the company is not disclosing more information on those talks.

EA said it still has a "high regard" for Take-Two's creative teams and products. But, after a "careful consideration," including presentations by Take-Two's management and a review of due diligence materials, it decided not to make an offer.

"At the end of the day, we simply have different views on the value of the company," Brown said.