EA Acquisition of Take-Two: Cut

17 09 2008

Take-Two’s shares tumbled 24% this week on the news that EA was no longer interested in buying them. “Strategic mistake” seems like an understatement.

The most interesting part of the whole thing is that, while Take-Two own Rockstar, their latest contracts with Sam and Dan Houser end next February. This is being reported with full on, end-of-the-world-gloom for Take-Two, but I don’t think it’s quite so bad.

Even at such a high level and after a bidding war, how much would salaries for the Housers be as a percentage of Take-Two’s profits? Probably miniscule. Even if they don’t retain Dan and Sam, they do get to keep the Rockstar brand. While the Housers are becoming celebrities and carry a lot of value among game developers, it’s likely that the studio name is worth more.

Too late for Take-Two shares though, which have fallen to levels around where they were before EA expressed interest, and before GTA IV was released. Without some serious work over the next year, it’s likely the company will shrink, which is fairly shocking given that they’ve made the highest profile release of the year.

Though EA are apparently no longer interested in Take-Two, they will of course still be trying to expand to a size where they can’t be taken over themselves, so Ubisoft remain a likely target.

(Image: Wall St., in GTA IV)

Advertisements

Actions

Information




%d bloggers like this: