EA Launches 'Hostile' Bid for GTA Publisher

Games news sites are reporting that EA has issued a new offering to Take-Two's shareholders in an attempt to purchase the company outright. Last month EA offered some $2 billion to Take-Two in an effort to accomplish the same goal. Take-Two declined, and EA took their offer public. Now, Electronic Arts is offering the price of some $26 per share to Take-Two's holders, a generous valuation. "Within ten business days Take-Two is required by law to publish, send or give to shareholders (and file with the Securities and Exchange Commission), a statement as to whether it recommends acceptance or rejection of the latest offer ... Since EA launched its February bid Take-Two said that other parties had approached it regarding a merger, but that it hadn't entered into negotiations with other companies about a deal."

Comments

If this goes through..

[kvezach]

Cue GTA 2009. .. and GTA 2010, GTA 2011, GTA 2012, GTA 2013...

Re:If this goes through..

[FredFredrickson]

Due to the fact that those games are already hot sellers, I'd say they were already pretty much guaranteed up through GTA 2013.

Re:If this goes through..

[Joe The Dragon]

and games will be buggy as the coders will be working 80+ weeks.

Re:If this goes through..

[Anonymous Coward]

Cue GTA 2009. .. and GTA 2010, GTA 2011, GTA 2012, GTA 2013...

Yeah, except with EA in control, don't expect the same GTA edginess. More accurately - queue the nerfing of Rockstar Games. :(

Re:If this goes through..

[Anonymous Coward]

Each with identical gameplay, but updated stats on all your favorite drug dealers and prostitutes.

Re:If this goes through..

[mikael]

The next title of the game has already been developed, and it is about to be released, with guaranteed profits. It is no surprise that EA sees a quick way to boost their quarterly earnings reports.

Re:If this goes through..

[fatgraham]

You don't think the coders who currently write the GTA games work 80+ hours a week??

I'm no big fan of Take-Two

[Pichu0102]

But still, I hope that EA doesn't take hold of them. EA's gaining way too much influence on gaming, and considering how they run things into the ground and churn out mediocre games on the backs of good games makes me worried that they'll grab as many companies as they can, and run them and their brands right into the ground.

Obligatory Penny Arcade. Different company, but I still feel it applies here.
http://www.penny-arcade.com/comic/2007/12/05

Re:I'm no big fan of Take-Two

[Shakrai]

But still, I hope that EA doesn't take hold of them. EA's gaining way too much influence on gaming, and considering how they run things into the ground and churn out mediocre games on the backs of good games makes me worried that they'll grab as many companies as they can, and run them and their brands right into the ground.

I watch them to do this to Maxis after they bought them out. We went from an absolutely great concept (Sim City) that was implemented nearly perfectly in Sim City 2000 (given the technological limitations of the time) to unstable bloated garbage that cared more about pretty graphics (Sim City 3000) then gameplay and required Google's server farm to run at a decent speed....

And don't even get started on 'The Sims'. Even if I thought it was a good concept (which it might be -- but it's no Sim City, IMHO) WTF is up with twenty thousand different "expansion" packs? They neglected a great franchise (Sim City) in favor of using the brand name to push a crappy product that they sold in 30 different parts.

Why'd ya have to sell out Will?

Re:I'm no big fan of Take-Two

[Anonymous Coward]

Oh, there's plenty of EA related penny arcade material:

http://www.penny-arcade.com/comic/2006/11/15

Re:I'm no big fan of Take-Two

[sesshomaru]

My favorite:

Cut Yourself

Re:I'm no big fan of Take-Two

[Gman14msu]

Well actually Sim City 4 was, and still is, a solid effort from them. They expanded the ability to users to modify aspects of the game and there is still an active community creating user content 5 years after it came out. Many people complained that the game was becoming too complicated and thus didn't garner widespread success. But seriously to summarize the Sim City franchise and not include Sim City 4 does not do the game justice.

Now don't get me wrong, I think EA has done a lot of bad to the gaming industry. Their exclusive contracts with the NFL and NCAA for football (which forced 2k Sports to go exclusive with the MLB), have in my eyes, ruined the sports game industry. Not to mention the worthless Sim City societies that EA recently put out, that wasn't even developed by Maxis.

Seriously though, if you want to> see a great game in development, one that will become the new Sim City, check out Cities Unlimited, http://cuplanet.com/. Monte Cristo is taking in a lot of public input on their forums for the new game and by all accounts it looks like the new Sim City that people have been waiting for.

Re:I'm no big fan of Take-Two

[whisper_jeff]

Why'd ya have to sell out Will?

I believe the technical answer is "truck loads of cash."

Re:I'm no big fan of Take-Two

[Lemming42]

And don't even get started on 'The Sims'. Even if I thought it was a good concept (which it might be -- but it's no Sim City, IMHO) WTF is up with twenty thousand different "expansion" packs? They neglected a great franchise (Sim City) in favor of using the brand name to push a crappy product that they sold in 30 different parts. The Sims is the far and away the best-selling PC game franchise in history. Every year since "The Sims" was released in 2000, a Sims product (sometimes more than one!) has held a top 5 spot in PC sales, and according to Wikipedia it's sold more than 70 million units as of January 2007.

Now I'm not saying it's the best game in world, but it's certainly a success.

Re:I'm no big fan of Take-Two

[zippthorne]

I'm not sure that's all that good of a metric. A 'Sims' product may have been on the shelves, and if you aggregate them it's the best selling, but a starcraft product has been on the shelves since 1998. And it's the same product. In glorious 800x600 sprite graphics!

Re:I'm no big fan of Take-Two

[Durzel]

"The Sims" is a licence to print money as far as EA is concerned, it really is as simple as that.

You can't exactly blame them for milking the cash cow when it has such a huge following.

Re:I'm no big fan of Take-Two

[AstrumPreliator]

Now I'm not saying it's the best game in world, but it's certainly a success.

Well that's what EA does. They're not in this industry to make great games and have a loyal fan base*, they're in it to make truck loads of cash in any way they can. This usually boils down to buying companies who have a loyal fan base and game names with good reputation, then driving them into the ground. I'm not saying EA is incapable of making good or original games, just that this is what they tend to do.

*I realize all companies are in it to make money. A lot of them consider good products and a loyal following to be a good move financially.

Re:I'm no big fan of Take-Two

[Backward Z]

This is a great example of a point I want to make...

EA makes crap games sometimes, especially when they buy a license they then want to milk. For example, from The Sims comes all the expansion packs, but also The Urbz and The Sims Online... Bunch of crap.

What nobody's giving EA credit for, however, is they do actually own up to their mistakes and work to improve on them.

Disclosure: I worked at EA Redwood Shores for 6 months in a creative position on a major title about a year ago now and the experience was very eye opening. Let me say it again: EA owns up to their mistakes and works to improve them. EA was spending tons of money on licenses that didn't perform extremely well on the market, so they're putting a larger focus on new IP, such as Dead Space. I remember going to an all hands meeting where last year's craptacular NBA Live was called, "an embarassment."

Personally, I think EA's games would be much, much better if they A) lenghtened their dev cycles and B) gave more ownership to the artists, to make the games they envision...

But the bottom line we all have to remember here is that EA is a company that makes mass-market games. That's what they do. They make mass-market games and frankly they're not terrible at it. Compare their track record to another company, say, like Midway or Infogrames/Atari/whatever they're called now or Ubisoft and really, overall they perform well. The developers I met at EA are very passionate about what they do, but it's very clear that the games made there are made for the mass audience and to please the shareholders.

When I was still in college, one of the Redwood Shores studio leads spoke at my school and something he said that haunted me the whole time I was EA was, "Once you accept that it really is all about the shareholders, it gets a lot easier."

Again, my greatest criticism about the way EA makes games is that they just don't take enough time to do it. They claim that it's shareholder pressure that forces games out of the door, but I don't buy it. They're on top, they should be able to make the rules. They have something like two billion dollars in liquid reserves, so you'd think they could afford to chill out a little, but that's not the nature of our stock-market economy, where corporations are expected to show rising growth EVERY YEAR... What do you do when you're huge and global already?

I find it discouraging that Dead Space is due out in October. It seems that because Will Wright saw Spore's launch date extended, everybody else is having to play catchup so that EA has some profits to show this year. As a result, Dead Space is only going to see really a year and a half of development time, where undoubtedly the designers will be working those eighty hour weeks to just get it done... LOL, at the end of a project, the favorite word is KS: "Known Shippable." for all those bugs we'd LIKE to fix but just don't have the time/resources.

So, EA: Hire more people, work them fewer hours, give your games longer dev cycles. The world will thank you for it.

And /.: Remember, EA makes games for the mass audience. That may or may not cater directly to you, but it doesn't mean EA sucks. It just means they make games that aren't catered to you. EA's devs are among the brightest and most talented in the world, but they just aren't given enough space to make the games they could.

Re:I'm no big fan of Take-Two

[Backward Z]

Sounds like you've basically summarized a lot of the reasons why they do suck ;) Totally.

Very simply, EA overworks their staff. They take advantage of passionate, talented indviduals who want their work to shine and have every ability to do just that... if they had more time.

In the same breath, I don't think it's wise to just say, "EA sucks" and dismiss them. I replied to your post in particular, but in my head I'm replying to a bunch of anti-EA sentiments I find all over /., Kotaku, EvilAvatar...

Maybe my point is: EA sucks, but not for the reasons most people cite.

And they're in position not to suck forever. They could conceivably turn things around and it might take buying and running more studios into the ground before they figure it out.

On the Maxis topic, I heard much talk around EARS about how Maxis coming to EA had done more to change the way EA operates than the way Maxis operates. Maxis brought with them shorter hours, TGIF parties every other week, a more open office environment, etc. etc., all this stuff was that was completely taboo at EA before they arrived is now integrating into the work/lifestyle, at least at EARS. I hear some of the other studios are still really, really bad (like Tiburon).

I talked to some of the top brass there and they all were saying, "Crunch is becoming a thing of the past," but from what I can gather, it's a lie they keep telling themselves so they can hope next year they'll maybe get to see their kids for ten minutes...

EA has everything in place... and they'd be great...

But right now, they're not great, they're mediocre. Mediocre != suck.

Very Generous

[eldavojohn]

At first I though, hey, their stock is at $25.54, $26 a share is not so generous. Then I went on to see that before the $2 billion bid it was bouncing between $16 & $18 for months. In fact, it hadn't seen $26/share since 1999. I can only assume the $2 billion bid was what caused it to spike, nothing else indicates that.

So the reason it's so generous is because EA is paying their own price that was the result of them inflating Take Two's stock prices. They want this company. Badly. Desperation or good business move? I'm not sure. Maybe it's just the big dog gobbling up the competition or EA expanding to other types of games and gamers? In my eyes, it's a shame for the sake of diversity though. EA would never take the risks Take Two has.

Re:Very Generous

[EastCoastSurfer]

EA offered to buy them a couple weeks ago. Take Two refused. So now EA is pissed and wants in before the next release of GTA. IMO, this is a bad move for EA. GTA has been a good franchise, but it is all TT has. Plus, how many times can you rehash the same thing (whoops that's what EA is famous for lol). I'm not so sure I would value GTA in it's current state at 2B. The GTA franchise has sold 66M game to date. At $50/each that's 3.3B over the life of the franchise. You have to assume the franchise will continue to grow for a 2B price tag. Speaking of growth, will Nintendo even let a game like GTA on the wii?

Re:Very Generous

[ivan256]

I'm wondering what chart you're looking at. The Chart you lined peaks at $10.87 in 1999. It was over $28 in 2005.

Take Two was really undervalued because on one round of poor selling titles, and various lawsuits. EA realized this. It would be irresponsible for them to bid more than they thought the company was worth. This offer is the same as the previous one. $26/share == $2billion.

The analysts (who may be full of crap, of course) all seem to be saying that they expect it to take $29 - $31/share to get a deal done. Will EA pony up another $500mil? If you ask me, people who like video games should hope not.

Re:Very Generous

[forsey]

Manhunt 2 is a far more violent game than GTA and it's on the Wii. Nintendo, like Sony and MS, only refuse games rated AO.

Re:Very Generous

[Itchyeyes]

IMO, this is a bad move for EA. GTA has been a good franchise, but it is all TT has. It's the biggest franchise they have but it's not even close to "all they have". Just to name a few they have Bioshock, Civilization, and all of the 2K Sports franchises.

Re:Very Generous

[quantumplacet]

While GTA is certainly Take Two's biggest franchise, its far from their only valuable property. Rockstar has also developed both Manhunt games, Midnight Club and Bully, all of which were quite successful. Take Two also owns 2K, which includes 2K sports, EA's only real remaining competitor in the sports gaming market. Gathering, TalonSoft and Jack of All Games are also under the Take Two umbrella and all have had their successes. Not to say GTA isn't EA's primary interest in the takeover, but obviously the single franchise isn't worth $2B.

Re:Very Generous

[sapphire wyvern]

GTA has been a good franchise, but it is all TT has.

Hardly. You may or may not be aware that Take Two owns 2k Games and 2k Sports. Thus, all of the following have been published by Take Two. Any of it familiar?

• Bioshock
• Elder Scrolls 4: Oblivion
• Civilization IV

In fact, not only were Civ IV and Bioshock published by Take Two, they were developed by studios that are currently owned by Take Two (Firaxis and the creatively-named 2K Boston/2K Australia, formerly Irrational Games).

Re:Very Generous

[eldavojohn]

You're right about EA wanting a piece of the next release but I don't think it has to do with GTA, it has to do with the upcoming BioShock 2.

Re:Very Generous

[Tritoch]

Don't forget about Globalstar/2K Play. Carnival Games was a huge success on Wii (now coming to DS), and they have a number of properties like Dora the Explorer that are cheap to develop and sell well to the casual crowd. Games like that don't give TT any cred with hardcore gamers, but they're cheap and easy ways to make a lot of money. They should also integrate well with EA's own casual initiatives, which have only gained steam recently with EA's rebranding efforts and focus on the Wii and DS.

Re:Very Generous

[shlepp]

I have a feeling this whole buying thing has to do with 2k sports, EA's only rival in the sports games.

Re:Very Generous

[NeutronCowboy]

Personally, I think EA has two reasons to acquire Take Two: Remove 2k Sports as competitor, and get GTA in the process. 2K Sports was a major thorn in EA's side, as it forced EA to reduce the price of its sports game to 19.99 for a little while. That's $40 per game in lost revenue. Not all games would have sold, but I can guarantee you that this was a serious hit to EA's bottom line. I'd even argue that this deal, contrary to the one that paid nearly $1B for Bioware and Pandemic, will have a positive ROI within a few years, based on nothing but GTA profits and lack of competition from 2K Sports.

doesn't ea have enough publishers?

[OrochimaruVoldemort]

they own bioware and pandemic. now they want take-two? this is becoming a monopoly on game publishing. the only real competitor is activision, and they are flailing right now.

That's gotta hurt!

[SoundGuyNoise]

I'd love to hear John Madden do color commentary over GTA.

Re:That's gotta hurt!

[Anonymous Coward]

I'h-I'h-If he steals that car.... it's a felony.

Oh boy!

[acehole]

I just can't wait for GTA: Livin' Large, GTA: Hot Date, GTA: Makin Magic and GTA: Vacation.

Re:Oh boy!

[poetmatt]

What about GTA: Hot Coffee?

Oh wait.....

cue the jokes

[Speare]

I'm expecting plenty of jokes about EA paying the fee, taking Take Two for a "ride," robbing Take Two of all its money and professional services, then firing a cap into the business before driving off.

Re:cue the jokes

[esocid]

I think they would be more along the lines of:

1. EA picking up TT, pulling into a secluded area (cue squeaking suspension).
2. Run them over for all the money they just paid TT.
3. Profit!!

Take Two Responds

[JeanBaptiste]

R1, R2, L1, R2, Left, Down, Right, Up, Left, Down, Right, Up, GTFO.

Surrender.

[SpaceDreamer]

You will be assimilated. Resistance is futile.

An oldie but goodie

[sesshomaru]

I loved this comment from a while back when they were trying to by Ubisoft:

What's going on indeed...

Re:EA Takeovers aren't as bad as you'd think.

[Pojut]

EA has already been acting like a bitch by buying out exclusive licensing deals with the NFL. They seem to be attempting to get their only remaining competition in the sports market out of the way by simply buying them.

I understand that the video game industry is like any other industry in that most companies exist solely for earning as much money as possible...but you know what? There are still some people that take pride in their work, and many of the folks that work under Take Two fall into that category. If they wanted to be owned by a big publisher like EA, they would have accepted the offer. They obviously don't want it, and EA is an even bigger asshole for trying to muscle their way in after they had the door slammed in their face.

As a person with high respect for those that create not just for profit but to make their creative vision a reality, I find EA's deal to be a slap in the face to gamers all over the world. EA has pissed off a LOT of people, and they seem to be content with adding to that number. Fuck EA, fuck their underhanded business practices, and lastly fuck you for supporting and defending them.

Re:EA Takeovers aren't as bad as you'd think.

[Grimbleton]

You realize of course that EA has owned Origin Systems since 1992, and has been running Ultima Online since 1997, right? ...right?

EA is the grandfather of the MMO.

EA Crap coding

[phorm]

Indeed. Every time I think of EA's acquisitions, I think about my more recent experience with C&C 3. I actually bought about 3-6 months after the release, so there were already patches, but still tons of bugs. Netplay was particularly horrible.

Forward to today, EA is touting the release of the addon to C&C3, but many bugs still exist in the game. I think the worst part is their online service, which seem to tie in all users regardless of location, which in many case pretty much guarantees a game with lag and dropouts. They've certainly got little on competitors like Blizzard, which - despite various other complaints about battle.net - generally has a reliable online experience, and has separate servers for the various world-regions.

EA is a bubblegum gaming company, and they turn all the companies they buy into such with little regard to quality or customer satisfaction.

Monopoly

[gpalyu]

If this was to go through, it would pretty much mean the end of major sports games competition, eh?

EA's motivation

[iamghetto]

EA's main motivation for this acquisition is to regain the old price point for their flag ship sports titles. Take-Two publishes basketball, basebeall & hockey games (and to a lesser degree football) games that are direct competitors to EA's flagship sport titles. However, Take-Two at times has priced these titles as low as $29.99 which causes EA to drive it's own prices down.

Therefore, buying Take-Two would rid EA of there sports-related competition and all them to price their games at whatever they want. EA is one record saying that this is their intention, and that GTA is just icing on the cake.

Kids

[BigJClark]

Don't hate on EA for making decisions that increase the total value of its own company. Instead, pity the poor game programmers. Kids, I have friends who work for that disaster of a company, and I had my own chance at it. The office in Vancouver is decked out to the 9's, but you'd better be ready to sacrifice your soul to the devil. Don't even bother applying if you have a family.

Seriously, think of the programmers.

..and the AI guys, although, they don't really do any work :)

Electronic Arts

[Schmapdi]

EA - Actively trying to ruin your favorite hobby for a good 20 years now. I mean really - are they not going to be happy until they own every game developer in existence and can charge 60 bucks a year for an incremental update to every franchise and brand under the sun?

Women and Sims

[QuoteMstr]

Oddly enough, I've noticed that while my female friends couldn't care less about most games, they go absolutely crazy over The Sims. Perhaps this effect has something to do with that game's popularity.

Nice timing

[ecavalli]

The offer is a clever move by EA, and if this particular offer isn't accepted, another one like it will be very soon.

As a company, Take Two is simply falling apart. They're being sued by shareholders for not accepting EA's original $2 billion buy out offer, the company is constantly under attack by politicans, parent's groups and religious leaders and aside from the temporary stock price hike attributed to EA's lust for the firm, the company's shareholders are jumping ship and dumping stock faster than you can say "GTA made me do it."

EA has foreseen the collapse of the Take Two and has decided it wants to salvage Grand Theft Auto -- not for any altruistic reason, but for the hundreds of millions of dollars each new game automatically earns. They may not be able to create an original football game, but EA certainly has the cash and the legal know-how to absorb Take Two.

Prediction: EA will own the firm by the release of GTA4.

Re:Nice timing

[PC and Sony Fanboy]

Prediction: EA will own the firm by the release of GTA4. My Prediction: EA will NOT own the firm by the release of GTA4.

well... one of us will win ;)