Federal Trade Commission Digging Deeper into EA's T2 Takeover Bid

Federal Trade Commission Digging Deeper into EA's T2 Takeover Bid

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

If GTA is just gravy, then what is up with the timing of the takeover? If GTA didn't matter then why were all the deadlines to sell only a few weeks before GTA? Everyone knows that GTA is going to be a huge success.
Monopolies are bad for consumers, no two ways about it, and no matter how EA tries to paint it
GTA may only be gravy... but it's tasty gravy.
Gravy's the only reason I'll eat turkey.
just gravy.

not convinced myself....
GTA4 will be $400 million in gravy. And that should just be the first week. EA is a lot of things, but they ain't stupid. The dollar signs can be seen from space.
I never liked gravy. That stuff is gross. I never found GTA to be particularly interesting, either. Funny how the two should be linked in a metaphor.

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.
Sean: you're crazy. Turkey is always good, be it gravied, sandwiched, or just plain torn from the bone. Dangit, now I'm hungry.

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.
@ OrangeSoda:
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.
[...] The Federal Trade Commission is taking a good long look into the bid (hostile in most regards) from EA for Take2. [...]
I wonder if EA would be willing to abandon NFL exclusivicity to make this merger happen? Would the NFL be willing to do the same?
@Zerodash

Probably not.
Have you seen the story on GameSpot today?
http://www.gamespot.com/news/6189491.html?tag=latestnews;title;0

THE DEAL FELL THROUGH!! REJOICE! STRAUSS ZELNICK IS GOD!!
I'll wait until someone other than gamespot posts news...
EA needs to be broken up we don't need the Rockefeller of the Video Game Industry
I really hate platitudinous games
@Simon Roberts

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.
Analysts talking out of their arses? SHOCK, HORROR!

Most of the regulars at NeoGAF would make better analysts than Michael Pachter. I wish I was joking...
Just more proof that EA is evil. Good thing I don't play sports games anymore. Once you have one, you have them all.

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