Archive for the 'speculation' Category

10
Jan
08

Acquisitions –Why Take Two Could be Next

Huge waves where made when Activision and Blizzard announced they would be merging together to create the largest third party publisher in the industry. With ever increasing costs of making games, teaming up makes good business sense. For example, not only does it allow resources to be pooled together (money, technology, etc), but it also a prevents a single blockbuster flop jeopardizing a company’s financials. With consolidation being more attractive in the industry, other publishers may be looking to buy out or be bought out.

Take Two had been rumored to be bought out in the past multiple times, and each time, it was believable for good reason. Compared to EA and the recently formed Activision-Blizzard, it’s not a huge company. It doesn’t gross nearly the same amount of money, though conversely, it also means it’s small enough to be affordable to buy. But even though they might be smaller, Take Two still brings a big amount to the table.

Sports games important to the industry because they provide companies with a predictable and substantial amount of income on an annual basis. Take Two’s subsidiary, 2k Sports, is a big player in the sports genre and are outdone only by the much larger Electronic Arts and its “EA Sports” brand. Unfortunately, they don’t have the much valued (possibly, most valued) sports license, the NFL – EA has exclusivity until 2009. However, 2k Sports compensates by putting up a good fight on the other mainstream sports by producing officially licensed NBA and NHL games. To top it off, they even have exclusive rights to MLB games. 2k Sports could be especially valuable to the newly created Activision-Blizzard as their combined portfolio of games is still absent of the mainstream sports – a must if they really want to go head to head against Electronic Arts.

Another Take Two subsidiary, 2k Games, is also worthy of big attention. After acquiring Ken Levine’s Irrational Studios (now 2k Boston), a number of critically acclaimed new IPs where created. These include the cult favorite Freedom Force series and the more recently released blockbuster, Bioshock. 2k Games also includes subsidiary Firaxis which is the home of an even bigger name in the industry, Sid Meier. With gamers tiring of sequilitis, having talented minds is important to keep jaded gamers excited (and paying) through new properties.

And then there is the elephant in the room: Grand Theft Auto. Rockstar Games’ GTA is a huge title and its impact on the game industry is up there with Final Fantasy and Halo. GTA4 is expected to sell millions of copies and there isn’t even a release date yet. Ironically, the biggest reason to acquire Take Two could also be the biggest reason not to. Already expected to bring home millions of dollars, Grand Theft Auto 4 would make an acquisition very costly to potential buyers. There’s also the huge amount of negative PR associated with Grand Theft Auto. Picking up the series is practically begging for trouble from many, including a certain attention grabbing attorney.

Despite the controversy it’s sure to stir up, Grand Theft Auto 4 will generate millions for Take Two. But, with Rockstar’s contract ending in early 2009, Take Two may have to face going on without new Grand Theft Auto games under its belt. With the possibility of losing their golden goose egg, Take Two becomes even more attractive to pick up or sell out.




About

Hi, I'm a nobody. But I want to be Somebody - specifically when it comes to games. I've always thought I'd grow out of them, but ever since I was a little kid, I've been playing them. On my quest of becomming Somebody, I've been looking at The Biz and had some crazy ideas of my own. Instead of abandoning them to memory, I've decided to keep a log of them here. It just might come in handy some day.
June 2017
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