February 25, 2008 -
Forget Grand Theft Auto.According to Wedbush-Morgan analyst Michael Pachter (left), Take Two Interactive's 2K Sports unit alone makes acquiring the company a winning deal for Electronic Arts. Pachter told GamePolitics:
This [$26 offer] is a very fair price. I do not think there's another bidder. I don't think there's any prayer of a bidding war.
Only EA can can make sense of [Take Two's] sports assets. It doesn't makes sense for anybody else to buy Take Two to engage in a battle to the death with EA for sports games, whereas EA can consolidate all the sports games and make a profit from it.
GP: Currently, EA has an exclusive on NFL-licensed games with its Madden series. T2 tried to challenge that last year with All-Pro Football 2K8, but the unlicensed game was a retail dud and garnered poor reviews. Take Two has a third-party exclusive on Major League baseball.
For EA, sports is enough to pay for the whole [$2 billion] thing. If you get rid of sports competition, you suddenly add Take Two's $200 million per year in sports revenue and EA doesn't compete on price anymore. So, theoretically, they could grow that business by $100 million [per year].
Currently [EA and Take Two] compete in pro basketball, college basketball and hockey. So by taking out all of that, EA has a monopoly in sports. If these guys have a monopoly, they're not going to cut pricing on sports games as quickly. We've been seeing sports games come down [in price] before Christmas the last couple of years. That'll never happen again.
That's worth a lot [to EA]. Everything else is gravy. GTA is just gravy...
Comments
Re: Pachter: Sports Drives T2 Deal for EA; GTA is "Gravy"
Its funny now reading all this about EA. Shame now they are getting sued. Ah oh well. Be a good corporation and play by the rules. Try something different!
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GTA 5
And to Pixelantes...you're right about NHL....but if you think NBA Live was better than 2K8 last year....you're delusional. NBA Live was improved...but it still sucked.
And to everyone who says they don't care because it's just sports games. The overall picture is so much bigger than sports games that it's not even funny. Do you really want EA to have that much power....sports genre or not? Their only competition in sports will be Sony....does this not scare you? Wake up! It may start with sports, but pretty soon you will see many other genre's affected because of the lingering waterfall effect that will soon follow.
This is not good people!
Besides don't the anti-monopoly laws apply to game making companies???
Worst part is idiots would still buy it.
They don't care one bit about what's good for the consumer. EA cares about what's good for EA. See, for a lot of these really big companies the consumer and the free market is an impediment to making money.
I know. Thing is, people COULD vote with their wallets and force change and let EA know it won't be stood for, however that is more likely to not work as there are couch jock die hard football fans who would still pay the outrageous price thinking it's a special edition or something
I mean come on, they're EA...
2K Sports is in its death throws anyway. EA could just as well continue on their own and destroy 2K Sports on its own merits.
2K Sports had a HORRIBLE year last year compared to EA. It was the first year, for example, when both the NHL and NBA games from 2K were clearly inferior to EA's. That hasn't happened in years, if ever.
2K Sports isn't even on the same page on MBA or NFL games. I'm sure everyone remembers the debacle that was MLB 2K7. And Madden, of course, is in its own stratosphere.
Take Two's other properties (Bioshock and Rockstar) are much more valuable than the clusterf*** that is 2K Sports.
*sigh*
I'm very glad I've never really liked sports games, cos if I did this wud prolly annoy me a lot more
Yeah, I know, it's a pipe dream. But I've been playing Pipe Dreams since '89. (And Blades of Steel for almost as long.)
Fangamer
Also, 2k Sports and EA are about to compete in boxing titles, as well. Fight Night Round 4 was just announced by EA (the last version of that game stunk), and 2k has been working on Don King's Prizefighter.
EA will make a new Madden instead of crossing out the 07 and writing 08 and upping the price back up to 60 dollars. but this time there will be absolutely no competition instead of just a little bit.
monopolies are bad for consumers.
plus EA will just drive the IP's into the ground. i'm calling it now
Bioshock 7 by 2011.
@Dog_Welder...that's what I'm guessing, but then shouldn't the reverse be true too? 2K Sports' games have been in the decline, a serious decline for about two years now. If I were to guess why that is, I'd guess they have serious problems attracting talent to work on those titles. You can see that from the production values on the 2K titles compared to EA's. The user interface and the "glitch" isn't anywhere close to the quality of EA's. 2K got the game engine and online play usually pretty solid (MLB 2K7 was a notable exception), but everything else in their games have always been sub-standard compated to EA.
Regardless it doesn't really matter as far as this business dispute goes. I think EA could crush 2K Sports without expensive hostile takeover. I think it'd be cheaper, and the end result (total monopoly on AAA sports titles) would be the same.
Some of the 2K Sports fanboys, and I've been one of the most rabid ones...but I'm getting better, thanks to 2K Sports worsening quality, would never, ever, ever buy an EA sports game. They'd rather have tooth picks stuck under their nails.
Obviously that's not 100% of the 2K sports games fans, but nevertheless, the revenue "switch" wouldn't be at 100% from 2K to EA once 2K is finished (or owned by EA).
I know I would NOT buy an EA owned 2K Sports title, even if they paid me to do it, assuming EA would keep the 2K Sports franchises, which I seriously doubt.
"Meh" to Pachter. I never understood industry analysts, because it's not very often that I see them say something that's actually right. Maybe I only happen to be paying attention at the wrong times or something.
Think, if EA Games was able to gain a monopoly in sports games (I personally don't care much for sports), what's gonna stop them from trying to monopolize other genres? I can imagine them trying to gain a foothold in FPS titles next. I can see it now...
"EA buys gaming licenses for Heckler & Koch"
Bastards.
Sad thing is, EA owns enough of System shock to send cecse and desists.
By the way, congrats on moving into a pro hockey career -- you were great in "Revenge of the Nerds!"
Fangamer
Though I don't think that the sports deal is the only thing driving the T2 deal. I think the merge and formation of Activision Blizzard is what's driving this whole mess. According to their own statements, AB stands to become the largest company in the biz after the merger. Apparently EA believes them. I can't blame them for wanting to acquire T2 to keep up with their competition.
Though that doesn't mean I'm rooting for them. I'm as excited about this merger attempt as I was when Bill Gates claimed he wanted to purchase Nintendo... not at all.
Thank you. This is the exact point I try to bring up whenever some brings up the term "monopoly" as regards NFL's exclusive license with EA.
A monopoly is the state that exists when only one company controls the sale of a commodity.
NFL video games are not a commodity. Football video games are not a commodity. Sports video games are not a commodity. Video games, arguably, are.
But, in no way shape or form does EA have a monopoly over video games as a whole.
And even with the idea of a Take Two/EA merger, there could still be competition even for football games. Midway's Blitz: The League is just one example. Of course, they have to be GOOD games, but that's up to those other companies.
If the merger did happen, I really wouldn't mind if a lot of the innovation in NFL 2K were pumped into Madden... 2K was a great game, and 2K5 still has features that Madden 08 doesn't (such as my roommate and I often complain about Madden's inability to challenge a play based on our choice of aspects rather than the aspect Madden chooses for us. Some plays we can't challenge at all.)