Archive for February 25th, 2008
February 25, 2008
Consolidation continues to be a major theme in the gaming industry, as Electronic Arts today made its intentions to acquire Take-Two Interactive public. Coming off last year’s big acquisitions of BioWare and Pandemic, EA offered to take over Take-Two for nearly $2 billion in cash, a 64 percent premium over the Grand Theft Auto publisher’s aggregate stock price. Take-Two’s board of directors flatly turned the offer down, saying the price was too low and the timing wasn’t right with Grand Theft Auto IV ready to hit retailers in just a couple months.
With the publishers releasing dueling press releases about the proposed deal today, Electronic Arts CEO John Riccitiello took some time to answer a handful of questions for If Its Games about why the publisher wants Take-Two, concerns over corporate culture clashes, and why this deal didn’t happen a year ago.
If Its Games: This news spooks a lot of EA and Take-Two employees who probably feel that they’re about to become redundant, in the various sports divisions especially. If this proposal were to be accepted, what level of employee cuts and consolidation would you expect?
John Riccitiello: I think it’s way too early to tell, but I will tell you that our attraction to the asset of Take-Two is because we love their studios–Rockstar, Visual Concepts, Irrational [2K Boston and 2K Australia], Firaxis–and we like their intellectual properties. This transaction as we’re proposing it is not about synergies at the studio level.
IIG: Are you aware of any change-of-control clauses that would possibly prevent Take-Two’s various licenses or studios from becoming part of EA if the buyout were accepted?
JR: Nothing that we can talk to you about because we’re not in the business of disclosing confidential Take-Two information, but we’re very confident in this transaction. We think it’s a great deal for their shareholders, it’s at a huge premium. And as a stand-alone company, Take-Two has a series of operational and scale issues, legal issues, financial issues
February 25, 2008
AP - Microsoft Corp. said it will stop making HD DVD players for its Xbox 360 video game system after Toshiba Corp. ceded the high-definition video format battle to Sony Corp.’s Blu-ray.
February 25, 2008
AP - Electronic Arts Inc. said Sunday it was pushing ahead with a bid to take over upstart gaming rival Take-Two Interactive Software Inc., despite rebuffs from the smaller company.
February 25, 2008
Reuters - U.S. video game giant Electronic Arts on Sunday said it had made an unsolicited $1.9 billion offer for “Grand Theft Auto” publisher Take-Two Interactive Software , escalating its battle with Activision for the title of biggest video game maker.
February 25, 2008
Race Driver: Grid developer Peter Shaw said it annoys him that many publishers think \”it\’s okay to treat a portable title on DS, as if it were a mobile phone game, or a PSOne game.\” He believes that since DS games are not that much cheaper they should still provide
February 25, 2008
A gamer who has received the February 08 issue of Play Magazine states that in the GTA preview there was a line that said \”The game is both PS3 and 360, but Rockstar has suggested that all further game development is going to be PS3 exclusive.\”
February 25, 2008
A new UT 3 deathmatch lego map has been released for Unreal Tournament 3 and better yet it is completely destructable!
February 25, 2008
The latest issue of Game Informer magazine has a quote from what we assume to be someone on the development team for MLB 2K8. The quote indicates that the Xbox 360 disc capacity just isn\’t big enough for the whole game. \”There is so much content included in the game that it couldn’t all fit onto the 360 disc. Free downloadable content will be provided for what was left out.\”
February 25, 2008
British tabloid The Telegraph have interviewed the man behind Ninja Gaiden II, designer Tomonobu Itagaki, about the violence in Ninja Gaiden. They questioned the violent content on the game, which is yet to be rated by the BBFC, and compare it to Manhunt 2. However Itagaki has stood up for the game saying that \”Violence is not about cutting an enemy into pieces or seeing a lot of blood.\” He believes \”real violence\” is about inflicting \”dishonoring wounds\” and that \”you would really have to hate your opponent and this is not what this game or this character is about.\”
February 25, 2008
A Maxconsole reader mailed in to vent his frustations at Microsoft\’s supposed false advertising of games. The official Xbox website denotes Devil May Cry 4 is in full 1080p, but this isn\’t the case according to him and the PS3 box has it right in being just 720p. The gamer also draws back on evidence which suggested Halo 3 wasn\’t even 720p and MS advertised it as 1080p. He\’s so angry, then that he threatens he will sue Microsoft although we\’re not sure how this would hold up in court.
February 25, 2008
quanticle writes “The New York Times is reporting that EA has offered $2B for Take Two Entertainment. The effort appears to be a move to consolidate the two companies before Take Two releases the next iteration of its blockbuster franchise, Grand Theft Auto 4. Take Two has politely declined the offer.”.
February 25, 2008
After last year’s surprise announcement that Vivendi would be merging its games business (including World of Warcraft creator Blizzard Entertainment) with Activision in a staggering deal worth $18.9 billion, Electronic Arts’ position as the world’s largest third-party publisher was in jeopardy. It appears EA wants that distinction locked up for itself, as the publisher today proposed another industry-shaking deal: the acquisition of Take-Two Interactive for roughly $2 billion.
EA revealed that in a letter sent last Tuesday by EA chief executive officer John Riccitiello to Take-Two Interactive chairman Strauss Zelnick, Riccitiello offered the all-cash deal, which is a 64 percent premium over Take-Two’s most recent closing stock value on the day of the offer. However, Take-Two’s board of directors declined the offer, according to EA, which led directly to today’s announcement.
“Our strong preference is to conduct a private negotiation,” the letter stated. “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.”
Riccitiello was proposing a different message in November, when in a presentation at the Reuters Media Summit he suggested that acquisition opportunities in the gaming industry were drying up. That was just days before the announcement of the Activision-Vivendi union.
If the proposed Take-Two takeover were to go through, it would give EA control of some hotly contested industry territory. First and foremost, EA would have control of Rockstar Games and its controversial and lucrative Grand Theft Auto franchise, significantly beefing up its slim roster of hit games rated M for Mature. In addition to that, the sports gaming market would see tremendous consolidation, as EA Sports and Take-Two’s 2K Sports label have directly competed in the football, hockey, baseball, and basketball markets over the years. They each have their own new boxing franchise in development as well, with 2K’s Prizefighter answering the bell against EA’s Facebreaker.
Shortly after EA went public with the proposed deal, Take-Two explained its reasons for declining the offer, saying the publisher had undervalued its array of franchises and creative talent, and that it wouldn’t be prudent to enter discussions of an acquisition so close to the April 29 launch of Grand Theft Auto IV. However, Take-Two executives left room for a deal to happen, saying they would be interested in beginning talks with EA starting April 30.
February 25, 2008
Earlier today, Electronic Arts revealed it had made an all-cash offer of nearly $2 billion to acquire rival publisher Take-Two Interactive. Take-Two’s board of directors rejected the proposal, leading Electronic Arts to go public with the deal today to inform the Grand Theft Auto IV publisher’s shareholders exactly what their corporate leadership is passing on. Take-Two has responded this afternoon with its own announcement to explain why the directors had balked at the proposed acquisition, saying neither the time nor the price was right.
“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,” explained the publisher’s chairman of the board, Strauss Zelnick. “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.”
Take-Two said the proposal “substantially undervalues” its franchises, creative talent, and consumer loyalty. As for the timing, the publisher suggested its rival was trying to ride the coming wave created by the Take-Two-owned Rockstar Games’ Grand Theft Auto IV, which should arrive in stores on April 29.
“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,” Take-Two said in a statement. “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.”
Despite the tough talk, Take-Two didn’t rule out the possibility of an acquisition at a slightly later date. The publisher said it was willing to start a dialogue with EA to see if they could agree on a price, but that it would defer such discussions until after the release of Grand Theft Auto IV.
“[We] offered to initiate discussions with EA on April 30, 2008 (the day after Grand Theft Auto IV is scheduled to release),” Zelnick said. “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.”
Zelnick also expressed other concerns in a letter sent to EA CEO John Riccitiello on Friday and reprinted in today’s announcement. Specifically, he questioned the impact such an acquisition would have on developers fearful of layoffs and studio closures.
“[As] we have all seen time and again, the process surrounding acquiring a public company from start to finish is complex, uncertain, intrusive, and distracting,” Zelnick said, “and we believe it would be especially so to the creative artists at the core of our business and to all those who may be displaced by a transaction.”