April 17, 2008
A press release issued by Electronic Arts this morning says that the Federal Trade Commission (FTC) has issued a second request for data concerning EA's proposed hostile acquisition of Grand Theft Auto publisher Take Two Interactive.The type of information sought by the FTC is not specified.
The government inquiry reminds us that Newsweek's N'Gai Croal reported recently the FTC might have anti-trust (i.e., monopoly) concerns. Croal's report was generated in part by comments previously made to GamePolitics by Wedbush-Morgan analyst Michael Pachter, who said that T2's sports game properties are the key to the deal and GTA is just gravy. Here's what Pachter told GP in February:
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…
AND, DON'T FORGET DEPT: Take Two's shareholder meeting will be webcast this evening at 6:30 Eastern Time...
Comments
not convinced myself....
On topic, I think I'd rather EA didn't buy Take Two. EA might not be as bad as the robber barons of old, but damned if it isn't trying.
As I said the last time this came up, the sport correlation doesn't seem unlikely; GTA4 will be a big shot in the arm, but selling the big sports games year after year is an ongoing investment that'll pay off huge in the long run.
Fangamer
Yeah, I never really liked gravy either, with the exception of the stuff that was served with my mashed potatoes at a local restauraunt. That actually had FLAVOUR.
All metaphors aside, I'mma listen to that webcast and try to figure out which voice belongs to JT again.
Probably not.
http://www.gamespot.com/news/6189491.html?tag=latestnews;title;0
THE DEAL FELL THROUGH!! REJOICE! STRAUSS ZELNICK IS GOD!!
I really hate platitudinous games
I'm talking about dry Thanksgiving turkey, I'm fine with the kind you eat sandwiches with.
@Ben
Not quite, Take-Two only restated that they wouldn't cave in to EA.
Most of the regulars at NeoGAF would make better analysts than Michael Pachter. I wish I was joking...