@PownerOfNewbs: There tends not to be so much anti trust on single software. Though I'm wondering really when the SEC is going to stand up and say " whoa whoa whoa" you guys are consolidating way too much. I think this is all happening this year because there will most likely be a democrat in the office next year, and the SEC will get some bigger regulatory thighs when that happens. It also reflects how desparate companies are getting for profitability too. EA realizes that having in house development, with strict rules on what they can produce and how long it takes them to produce it isn't working. What's coming out of it is now they're trying to buy out their biggest competitor in sports, while also potentially taking in another fantastic developer 2k Boston. So really all sports games will come from EA. Sadly the only way companies will be able to compete now will be to try something out of the box to compete with EA.

High School Sports sounds like a fantastic way to break out of the mold, as wel as professionial martial arts games. I love to see someone try something in this space.

@Rendon: Oh man if I was a shareholder I'd be totally pissed too especially if they were going to get a 26 dollar per share price, I think at least in that train of thought Take 2 really could get more money if GTA 4 has some real legs this quarter when it premieres.

@PrivateJ0ker: Yeah I always hated that about the way corporations work. You basically have to destroy stockholder equity to get rid of a CEO, making the company worth a little bit less than what you paid for it.

Lets not kid ourselves everyone, the only company that could save Take Two at this point would be Activision or Microsoft and I don't think they're willing to fight EA for something so big. So ultimately EA will buy out Take two, the only question is what kind of a deal will they get for it it. It will be interesting to see.

Hey Kotaku lets start calling this story Riccitiello's Ambition. Since he seems ready to downright consolidate the North American video game market. This guy has made some smart moves, some neccessary ones, and some that darn right feel unforgiviable.

Kounji

Let me get this straight: Take-Two rejected the EA offer because one sleazebag suit doesn't want to raise eyebrows while making another boatload of cash? That's what the fabric of sports games and our industry's biggest franchise are being held together by? Oh, that's reassuring... ::shakes head:: Whatever keeps EA away from the GOOD basketball series, I guess.

ViolentLee

As a TTWO shareholder, this really pisses me off. They had better work out a much better deal that involves cash and EA shares (or preferably another company, just because I own a tiny bit of the industry doesn't mean I lost my heart). I mean, TTWO stock is already above $26 ($26.73 right now). Surely they could get $30-34 in cash and stock.

But if they end up working out a huge payout for themselves and then selling for $26 a share... there will be reckoning. Or at least a ranting.

Rendon

Money ruins the industry while also being the only thing that sustains it. Such is Capitalism.

Demaar

@NutManIV: Yeah, an average score of 72 and dropping is really something to applaud... The company is entirely too large to blanket under statements like that - especially when they're releasing the same mediocre games year after year.

Instead of improving their own franchises' models, or competing with others', they'd just rather buyout competition and reap the rewards.

-----

@Grive: No reason? That makes absolutely no sense.

The entire drive behind a capitalistic economy is to encourage competition between companies. Each company's motives should be to create better games for cheaper prices to win over market share. The power is supposed to be in the consumers' hands.

EA purchasing EXCLUSIVE rights for years at a time for an entire market section defies that principle in the most disgusting manner; it's now illegal for there to even be competition in this field.
This is particularly true when you take into account EA CEO John Riccitiello's own admission of EA's mistakes by purchasing its competition. How he tries to justify this action by "giving keys" to the developer is complete nonsense - this act of placing as much as possible under one umbrella is still killing the drive for improvement when there's less of a need to compete.
EA receives the benefits and loses incentive to evolve their existing titles, or create new ones.

-----

@Hori: EA would own the most popular sports game franchises, but there is nothing preventing another publisher from starting their own sports franchises.

...Nothing... except the despicable fact that they've bought exclusive rights for the NFL. Of course, that's not the only football league that could be created, but it shows to me that EA is clearly not one for spending their monetary resources on improvement, but shortcuts instead.

-----

These changes won't have an immediate effect on the industry - aside from perhaps unexpected multiplatorm version of exclusives, and rushed release dates. The problem will come once the next wave of IPs are on the horizon. The companies won't have the same drive for creativity.
Hopefully, unique ideas will still come in the form of independent designers, and they won't overshadowed by the ridiculously funded ad-campaigns of larger corporations.

/end rant.

Arttemis

omg, it's the gman o_o

Zodduska

Well its going to be a while until EA merges with Take Two. I doubt it will happen anytime soon unless the CEO wants to be in a jail cell.

HurricaneDave

@Burguois: Sadly, your words will fall in deaf ears (blind eyes?). EA is too big not to be hated, and it's too cool to hate on them for no real reason, it's impossible to change with a single link of mighty truth.

Too bad.

Grive

Luke, honey, CEOs do this all the time! Why do you think we mere mortals sneer at their ethics?

Chilly Hollow

Time to seriously invest in Take-Two stocks...

Mico Mico Nurse

How about he does the right thing and redistributes some of those bonuses to the devs who work their asses off so that anyone can give a shit that he exists?

Oh, wait a minute, that would be too idealistic for a capitalist society. Oh well. Wee! This handbasket feels just like a roller coaster!

BtownDesignGuy

@tme2nsb: Um ... he didn't want to get his ass hauled into court?

brent_w

My god CEOs are money grubbing. What is one person going to do with all that money?

gamadaya

Does this affect anyones daily way of life until they die? If not, why are you bothered?

joeblundell

@4dSwissCheese: If EA continues to buy everything, then yes Kotaku will be worthless... *You* can get all your gaming news from EA.com.

I understand they're all out to make a buck, and maybe "destroy" was a bit far, but the fact remains their product is constantly shoddy and remains vastly unimproved or innovative year in and year out. I haven't bought any EA product since the days when they snubbed the Dreamcast. I still play their games. I just don't buy or rent them. Nor will I ever.

Sambadeamigo

@Sinnbox: play NHL08, waaaaaaaaay better than anything 2k has ever done. sports game of the year, easy

baccardi84

@PownerOfNewbs: it doesnt stop anyone from competing with their own sports game, so its not a monopoly

baccardi84

@meltyman: :/, 3 days worth of work and my 4 years of college would be paid off.

I would imagine he would wait till GTAIV hits planet earth. Stock rises maybe a dollar or two, demands higher price buyout, Mr. Z gets even more benefits.

Why sell the company now if you have a guaranteed couple million seller product in two months?.

Of course, if the speculation holds up.

Fyren

@4dSwissCheese:

I play the game each year one way or another. Just because it got better ratings does not mean anything. These people reviewing the game often know little about hockey or little about video-games. Every friend that likes NHL hasn't played NHL 2K, when they do they quickly switch over because they didn't know their was a true sim out in market. NHL EA is fine if you do not play hockey much, but 2K's gameplay cannot be beat for realism, or at least by any title EA has released.

Muisee

@NutManIV: BUT THEY ARE EVEEEL OMG

Seriously, what the hell is with the EA hate?

They make pretty good games and they're doing a lot to shake off the whole Evil Overlord image they've got going. Is it so hard to accept that maybe, just maybe, they're actually trying to do what they say they are?

[www.mobygames.com]

(I'd wager most people here have played many games on this list and enjoyed them and are heavily anticipating quite a few of them aswell)

Burguois

This is... Depressing.

Not just the article, the merger, everything.

All of this is so reminiscent of comics and movies in their early days, the migration from small independent producers to being manipulated by greedy opportunists of business with no love for the craft consolidated into huge studios mass producing huge budgeted hits... With a small independent section remaining to eke out a meager sideline.

Yah, it happens to everyone, we're just here the fastest and forgot our history lessons.

Note: Ugh, it looks extremely paranoid what I just wrote, but reading about the early days of Marvel has it kind of fresh in my mind. That, and every time I read something like this I ponder why I'm not pursuing a role as a producer and not a designer.

art_zombie

@Muisee: You really should give NHL another try. I really liked the '08 version. And it reviewed considerably better than 2k8 fwiw, so EA's doing something right in that regards.

4dSwissCheese

NHL 2K is the only real hockey game out there, without it I do not know where I would turn. I know it would not be to NHL by EA, that doesn't even count as hockey. I hate EA so much.

Muisee

@tme2nsb: Essentially, if they had accepted the first offer Zelnick would be in a lot of trouble over what essentially boils down to insider trading because he recieved his stocks after the first offer was made.

Since they rejected the first offer and approved the second, if shareholders make enough money from the buy he'll be ok.

At least, that's what I gathered from the reports, and I'm no expert.

Either way, it all sounds a little suspect.

Bacardi151

Damn the way this reads it's like EA acquiring Take 2 is pretty immenient. Damn EA will be MEGA large if they acquire this company and it's properties.

*runs to purchase EA stock*

FunKrusher

If EA starts publishing Grand Theft Auto... well the industry may just be screwed.

A few years and they come out with their own console killing off Sony completely and edging away Microsoft eating away at chunks of the Xbox, splitting it open and licking away that cream of faulty hardware and mashmallow cream. The only hope will be the pure hatred that EA enjoys so much of.

And Nintendo fans because one Nintendo fan can support the company if it releases Mario Party daily with a new hat for mario everyday.
----
What has it been the last year before this, the Ubisoft deal and the buyout of Bioware..

You know what... the EA moon idea... seeming kinda...

SaanZ

@Sambadeamigo: Oh...so the videogame industry is destroyed, is it? Well then I guess we don't need this site anymore.

All the publishers are out to make a buck. EA's just been doing it longer, so it's accrued more ire from the public.

4dSwissCheese

Hello, I've been reading this website for many months now and feel like I would add my own input to this discussion, since I have a background in this.

Companies boardmen will draft policies in order to influence, stop or interfere with take-overs, as it in many cases can impact their position, or eliminate it. By putting in place large compensation packages for themselves in the case of a successfully executed take-over, they have created a defense barrier, or an anti-take-over mechanism. This strategy is actually similar to what is called a "Golden Parachute", whereby a group offers the boardmen excessive compensation packages during the take-over procedure in order to make the take-over efficient, and with minimal problems. A scorned boardmen can destroy the equity that a take-over company was hoping to gain. The threat of their expertise is one of the main reasons executives, and board officers are frequently paid so much. Its not that they deserve it, its that they HAVE to be over-paid to leave, they have too much leverage.

PrivateJ0ker

PrivateJ0ker

@JohnnyLA: Treating your employees poorly is almost the norm for big companies these days. Destroying an entire industry w/ greed and laziness isn't even on the same level.

Sambadeamigo

@JohnnyLA: I'm right there with you. The crap that Rockstar pulled with Manhunt 2, not to mention Bully and Hot Coffee really made me lose patience with them. They're like petulant children. And maybe EA is just who's needed to slap some sense into them.

And with regards to Take Two, did they really need to force Irrational to change its name right on the eve of Bioshock coming out. Ken Levine already sold them his company to get the game made, they had to strip the name away too?

4dSwissCheese

Well, maybe Madden wouldn't suck anymore....plus this might explain why WA let the head of the Madden Dev team go....EA knew all along that they'd make Take Two an offer they couldn't refuse.

Knoxximus (360/PSN)

Man, people don't understand that Take Two and in some instances, Rockstar, are as evil as EA or worse. I've heard many horror stories about devs getting burned out, producers being complete d-bags and the like so this doesn't come to me as a surprise at all.

JohnnyLA

Buy GTA4 and enjoy it with all your heart. It may be the last GTA with a soul.

nullterm

The payrise is opportunistic - they must also be able to convince shareholders/the market that the offer really wasn't good enough.

If EA later sweetens the deal, shareholders win, executives win. It's how the rich get richer.

Infinitum

@meltyman: A poison pill is not an uncommon tactic. However, usually a poison pill is set up to enrich all the shareholders of a company - here, it's set up purely to enrich the executives - and in particular, they set it up in a way that tried to intimidate EA into keeping it's offer private, and thus out of the purview of TTWO's shareholders until their increased compensation had passed.

@tme2nsb: Take Two's actions here aren't even remotely monopolistic. In fact, they're the opposite of monopolistic. Don't use words unless you know what they mean.

4dSwissCheese

@Rockwallaby:

That's not fair, Kotaku is a free site. It NEEDS sponsors to keep the site up, even if it is part of a bigger network. It's not like they're getting the payout from the Turning Point ads.

Also, what Luke is trying to show with this article from the obvious title that is a question, not a definite statement. Is that maybe Zelnick refused because his new payrise isn't official yet. And if GTA4 pushes Take Two's stock above $26 per share, then they won't have to sell.

CardJoker

@tme2nsb:

Waiting for stock price to go up higher and another better off from EA.

mpmaley

@Archaotic: This won't constitute a monopoly so the SEC won't be getting involved.

testmunky

@PownerOfNewbs: It wouldn't be a monopoly situation. EA would own the most popular sports game franchises, but there is nothing preventing another publisher from starting their own sports franchises.

And @ anyone confused by the article: The shady part of this deal isn't the fact that Take-Two might fetch a higher price after a delay. The real issue is that Zelnick might not be acting in the best interests of the shareholders. It's pretty shady if he:
- refuses the offer from EA
- sets up a sweeter payout for himself
- waits for that sweet payout to be finalized internally
- then makes the sale for a similar price as the one he initially refused

In that scenario, shareholders get no benefit from the delay, but Zelnick does.

Hori

reading level up yesterday about this, i was under the impression this is a common occurance, with this being an example of a poison pill in the contract should EA decide to buy Take 2, in essense, EA would end up paying their bonuses/pay bumps.
But that said, this is pretty shady on the part of the investment firm, i mean a pay increase from originally 60k a month is pretty amazing...

meltyman

Having worked in the industry for over ten years this doesnt come as a suprise. Almost every company I have worked for has corrupt or self-centered board memebers and CEO's. The consumer will always buy games. It doesnt matter where they come from or the quality. It would be nice though if EA finally came under some scrutiny from a monopoly standpoint, however Sony and Microsoft as game publishers keep EA out from that microscope.

Babygames

@tme2nsb:
Hopefully the US government sees it that way too.

Archaotic

I would definitely see this as monopolistic - and illegal.

tme2nsb

@Sinnbox:
That's what made buying Rock Band such a guilty action. I hate EA, but I hate Activision and their buyout of the Guitar Hero license just as much, if not more, so for once EA was the lesser of two evils there...

But Microsoft would be just as bad for Bioshock as EA would, that much is for sure. Just look at how much almost every major Microsoft Game Studios title underperforms compared to what the creators promise and that should be proof positive.

Archaotic

@Sinnbox:

EA has tons of good games. In fact they actually have the highest overall review average of all 3rd party publishers.

NutManIV

@Rockwallaby: HALO ot good? well Halo 3 was kinda lame for the wait. IMO Microsoft has some good games. EA...not so much, I can't think of a single EA game I have purchased for myself since Nightfire.

Sinnbox

Hopefully EA lets the 2K Devs work on their hockey game, IMO the 2K seres has been superior to any of EA's Sports games since the Dreamcast ERA.

Sinnbox

New tag on this post: GIANT STRAUSS ZELNICK FACE

Crippl3

@Archaotic: didn't think of Bioshock, does ubi have enough money? at least some good stuff slips through the cracks there or ActiBlizzard anyone even Sony just not EA (or microsoft).

Rockwallaby

Isn't this pretty much illegal? I always thought it was a legal requirement for companies to act in the best interests of their shareholders. Being bought out by a much more affluent company when your company is going down the shitter makes perfect sense, rejecting the offer for your own personal gain does not.

Burguois

@eastx: GREED.
_
This post brought to you by TURNING POINT - Fall of Liberty

Rockwallaby

@Rockwallaby:
How about EA owning the rights to Bioshock? That's what worries me. GTA is already needlessly commercial and EA would probably keep it the same.

They'd butcher Bioshock 2.

Archaotic

Yeah, the guy's a jerk. I'll never understand why the rich want to get so much richer...

eastx

So Take 2 is gone once he lines his pocket a bit more.

Rockstar should spin-off, the prospect of EA owning the rights to GTA is heartbreaking.

Rockwallaby

@PownerOfNewbs:
Well, it would be, but who knows if the government cares enough about the gaming industry to make a decision like that? That's what worries me. The government probably thinks this industry is too small and "for kids" to waste money trying to stop a deal like this.

Archaotic

Won't this be rejected by Antitrust? Seems like it would be a sports game monopoly.

PownerOfNewbs

@ABigSmall: Oops! heh... nevermind then!

Arttemis

@ABigSmall: Yes.
A "major increase in compensation" when it's done "shortly after receiving this offer, and before they told shareholders about it" simply so he and other executives could "vest (ie pay out) immediately should the company be bought" is dirty.
Shareholders are partial owners of corporations, and these decisions aren't meant to be done behind their back - and that move was an obvious insurance plan to cash out (while shareholders are ignorant of the situation) should he decide to sell.

Obviously he decided not to sell now, but to wait until post-GTA4 time in hopes that EA will pay more for the then-inflated share costs.
But that doesn't make his move any less slimy.

Arttemis

I just don't want to see TakeTwo get taken by EA. I mean how big does EA need to get really? After this it will basically just be EA versus Activision with each western developer gradually get picked up one by one untill they both fall under one of two houses

ArmyofJuan

Everyone knows EA will own Take 2 by the end of the year. It's as good as fact.

LittleBigPlaneteer

@ABigSmall: Oh. I just realized the entirety of what was being said.

don't mind me, please.

ABigSmall

The article seems a little open ended. Take-Two rejected the offer because the execs wanted a piece of the pie and 'delayed the deal' so they could raise the market price per share and profit... and are now coming under scrutiny?

Neer'mo

just "Take 2" billion and be done with it.

Dakobah

@tme2nsb: yes it does, the guy basicly gave himself more money with a stipulation being that the company gets bought out and then suddenly EA makes an offer.

@Nyxll: Its illegal so no we wouldnt have all done it. He's already rich, this is called GREED.

parad0x360

Damn it's been a good news week and it's only Tuesday.

Behaving_Well

Sigh. And any faith I had in Take Two crashes down through the floor and lands in the same opinion sub-basement that houses EA and Activision.

Rest in peace, NHL 2K, the one professional sports game I ever willingly paid for with my own money.

Archaotic

@Arttemis: What dirty tactics do you speak of? ZelnickMedia's approval of financial packages to some of Take-Two's executives? Is that really a dirty tactic?

ABigSmall

Ah, capitalism. Do you breath that fresh, industrial air? I know I do.

Darthvinder

Every single one of us would have done the same thing. Why? Because everyone is looking out for themselves.

No one cares about gamers, their clients or their stockholders, they are go after what will have the biggest pay off in the long run.

Nyxll

That's messed up in all sorts of ways -- read the Wall Street Journal article it came from ... I wouldn't be surprised if the SEC took a look at it.

jayntampa

@natiahs: I meant "they're" in that last line, not "their." Yeesh, sleepy.

JET

natiahs

Wow, and I thought Take-Two would resist EA's dirty tactics... instead of taking advantage of them for their own, equally dirty tactics.

Thankfully GTA4 will be released unhindered by EA's monopolistic reign that shattered the previous companies' lineup.

Hopefully Mass Effect 2 and 3 won't be hindered by EA's greedy buyout.

Arttemis

Take Two did not reject EA's offer. In their letter, T2 execs said the company needed to focus on meeting their 4/29 release date for GTA4. They offered to enter into a "quiet period" until after GTA4's release during which time they will not consider any other offers. Talks will resume after GTA4's release and, presumably, once their stock prices have improved. EA will have to shell out more money, but I imagine the deal will go through if their willing to pony up.

JET

natiahs

@tme2nsb: I'm confused as well. Was it rejected because of how goddamn shady Zelnick would look if he accepted the offer so close to renegotiating his pay situation? That's the only answer I can pull from what we've been given here.

Miksho

... Maybe the two companies are right for each other after all.

NitrousO

@tme2nsb:
i think they just want to wait till GTA is out and see if there shares go up or past EA's offer, if not then they will sell.

at least thats what i understand of it.

Dakobah

Man's just trying to get as much money for himself before his company becomes another producer of bland dreck and yearly sequels and just maybe the odd good game every blue moon.

Xideo

So the firm was basically trying to sell out Take Two?

I guess scum rises to the top.

Lackshmana

I too will shed a tear for NHL2K... we had some good times

withaneight

what a sleeze bag

AlexNC

This still doesn't answer why it was rejected.

tme2nsb

bye bye NHL 2K

globones