EA Abandons Efforts To Take Over Take-Two

Erik J writes "Electronic Arts has abandoned plans to absorb Grand Theft Auto IV publisher Take-Two Interactive, the company announced earlier today. Following over half a year of hostile buyout offers by EA, the pair went into talks under a confidentiality agreement in late August. From the official announcement: 'EA continues to have a high regard for Take-Two's creative teams and products, [but] after careful consideration, including a management presentation and review of other due diligence materials provided by Take-Two Interactive Software Inc., EA has decided not to make a proposal to acquire Take-Two and has terminated discussions with Take-Two.' The announcement caused Take-Two's stock to drop by 30%, and analysts expect a bidding war to ensue for employment of the GTA creators."

Comments

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[renegadesx]

Good move, you know EA would have populated the market with yearey (or twice yearley) low quality GTA's and Bioshock's with Spore DRM (SecuROM).

They would figure most would just buy them anyways = more profit for them.

One thing that is really good for the industry out of all this, is this prevents EA Sports from monopolizing the sports genre.

EA recently spoke about trying to win back our hearts and shed this negative image people have about EA. However I must say that they are not doing it right. Yes they are introducing new interesting IP's such as Spore, Mirror's Edge and Dead Space. However they wont win any heats with hostile takeovers and horrible DRM!

Baffling: Market Response

[Bob9113]

The market responded by punishing the stock price of both companies. There could be little more clear evidence that the market is not efficient. How stupid does one need to be to think that EA + Take Two would be better than the two independently? Or, perhaps, how broken must our "free" market be for that combination to make sense?

EA pumps out extremely polished, but hopelessly formulaic titles. They treat their employees like interchangeable cogs. And they count every bean as if it were their last. It's not everyone's style, but it works for the products they create.

Take Two creates lavish works that are expressions of a borderline mental artistic genius. They treat their employees like, well, Rock Stars. They blow through cash like a 1999 dot-com. They are constantly bouncing from rags to riches and back again, but when they hit they move the industry.

The idiot investment analyst looks at that and thinks, "Imagine Take Two's brilliant artistry with EA's money management and product-focus." But, that is why you are called an "idiot" investment analyst, idiot. These are not compatible business models. EA is no more capable of nurturing artistry than Take Two is of being efficient. They are specialized, and they excel because they are specialized. Their flaws are facets of the strengths that make them great.