Are Nico Bellic and Liberty City coming to the Wii?

Take-Two CEO Ben Feder (left) wouldn't say yes and wouldn't say no during yesterday's conference call to discuss T2's third quarter financial results. As reported by MCVUK, here are Feder's comments:

With respect to GTA Chinatown I will tell you that we’ve spent an enormous amount of time and effort working with Nintendo and developing that partnership. We’re very proud of the partnership that we have to date.

 

We continue to build that relationship. We think we have significant value to add to that partnership and that’s not a one-way relationship in any way. GTA Chinatown Wars is not even the first step but certainly an important step in continuing to develop that relationship.

 

So without commenting on whether GTA specifically whether it is coming to the Wii or not, I will say that Nintendo and Take-Two work very well together. Nintendo and Rockstar are beginning to work well together and we intend to continue to grow that relationship.

GTA Chinatown, of course, is the DS title revealed by Nintendo at E3. No release date has been specified.

Any decision to move GTA to the Wii would likely be based on technology as opposed to residual queasiness over Nintendo's "family friendly" image. After all, the Wii has already been graced with Manhunt 2. The controversial Madworld is in the pipeline.

From a tech perspective, it would seem quite the challenged to get, say, GTA IV on the Wii, given the system's limited storage capacity. So perhaps if the GTA franchise does make it to the Wii, it will be a system-specific title.

Full transcript of T2 conference call graciously provided by Seeking Alpha.

Following a volatile Wednesday for Take-Two stock, investment site Seeking Alpha mentions that a rumor floating around Wall Street had EA walking out on its secret merger negotiations with T2:

Yesterday's session featured some strange exchanging of Take-Two Interactive Software Inc. (TTWO) shares, just one day before the company is set to release earnings.

 

There was no news released, though Barron's later said that the price decline was due to rumors about Electronic Arts Inc. (ERTS) walking away from merger talks.  ERTS had an executive speak at a conference right around noon.

T2 opened yesterday at 24.51 but dropped as low as 21.34 on the rumor. (note the big dip in the TTWO share price chart for Wednesday afternoon). 

While Seeking Alpha ultimately discounts the rumor, it's known that EA management is not especially fond of the Strauss Zelnick team at T2. That has a lot to do with the rich deal Zelnick put in place for himself and his crew in the event of an acquisition. Given that atmosphere, hardball tactics (such as a walkout) would seem to be in the realm of possibility.

Don Reisinger, who pens The Digital Home column for Cnet, takes a dim view of video game publisher mergers - especially the proposed deal between Electronic Arts and Take-Two Interactive.

Reisinger believes consolidation results in high profits for pubishers and low-risk, lackluster titles for gamers:

Since the age of consolidation hit the video game industry, it has changed drastically... In fact, consolidation has spawned an industry that's dominated by sequel after sequel and enough first-person shooters and sports games that barely differ from year to year...

 

A quick glance at EA's upcoming lineup of games tells you everything you need to know about consolidation. Aside from Spore, it's dominated by sequels and titles that will do little but provide the same basic experience...

 

And if EA and Take-Two -- two of the biggest culprits of derivative gaming -- combine to form one major developer, this will only get worse.

Now that the Federal Trade Commission has opted not to place any regulatory hurdles in the way of a potential EA-T2 merger, the two publishers will begin meeting behind closed doors.

An filing made by Electronic Arts with the Securities & Exchange Commission late yesterday reads in part:

On August 25, 2008, [EA] and [T2] entered into the confidentiality agreement contemplated by the letter of August 17, 2008 from Strauss Zelnick, Executive Chairman of the Board of Directors of Take-Two to John Riccitiello, Chief Executive Officer of EA, and the letter of August 18 from Mr. Riccitiello to Mr. Zelnick.

 

The terms of the confidentiality agreement prohibit each of EA and Take-Two from, among other things, publicly disclosing the status or terms of any discussions or negotiations between EA and Take-Two unless EA or Take-Two notifies the other that it is terminating discussions. As a result, EA does not intend to make any further announcements regarding the status of any discussions or negotiations with Take-Two unless and until discussions between EA and Take-Two have been terminated or such parties have entered into a transaction. As previously disclosed, EA now requires due diligence to support any proposal to acquire Take-Two and there can be no assurance that any proposal, negotiations or transaction will result.

Among other things, EA will be looking at T2's three-year game release schedule. Not a tough one to figure out: GTA V, Bioshock 2. A GTA MMO would be a nice surprise...

The Federal Trade Commission has posted letters on its website which indicate that it will not oppose a proposed merger between Electronic Arts and Take-Two Interactive.

The letters, written in government bureaucrat-speak, are dated August 18th and read as follows:

The Federal Trade Commission’s Bureau of Competition has conducted a non-public investigation to determine whether the acquisition by Electronic Arts Inc. of Take-Two Interactive Software, Inc. may violate Section 7 of the Clayton Act or Section 5 of the Federal Trade Commission Act.

 

Upon further review of this matter, it now appears that no additional action by the Commission is warranted at this time. Accordingly, the investigation has been closed. This action is not to be construed as a determination that a violation may not have occurred, just as the pendency of an investigation should not be construed as a determination that a violation has occurred. The Commission reserves the right to take further action as the public interest may require.

With the FTC hurdle apparently out of the way, EA and Take-Two are free to attempt to reach agreement on a takeover.

Via: Reuters

Yesterday we noted a New York Post report on the proposed EA takeover of Take-Two which claimed that the Federal Trade Commission, scheduled to rule on the merger by tomorrow, might require that T2 spin off one or more of its sports franchises so as not to hand EA a stranglehold on the sports segment of the market.

Heidi Moore of the Wall Street Journal digs a little deeper, interviewing Jeff Anderson, CEO of startup online sports gaming service Play Hard Sports (and former Turbine CEO) concerning his view of potential monopoly issues:

It’s in the best interests of consumers to have a choice. I’m always in favor of having more choice in the marketplace. Look at the ESPN football product when it came out. There was no [NFL] exclusivity agreement then. When Take Two changed its price point, people moved toward the Take-Two product and forced EA to reduce its price. You saw how competition can work in the advantage of the consumer.

 

The question we’re looking at, and what the FTC should be looking at, is whether this will reduce competition. If Take-Two’s sports franchise becomes part of EA, will that influence competition for the better or not? And will it influence prices positively or negatively?

 

Generally I’m not a fan of monopolies in the gaming world. We’re interested in providing a new choice to consumers. As a gameplayer, we’d love to see great games produced by these studios. And we’d love to see them compete.

As GamePolitics reported yesterday, EA may have called a cease-fire in its hostile bid to absorb Take-Two Interactive. That development, however, does not mean that the two game publishers are ready to share a hug.

The New York Post reports on snarky (and anonymous) barbs traded between EA and T2:

"To say that EA blinked is a huge understatement," said one source close to the Take-Two camp. "They finally came to their senses and realized this wasn't going to be done their way."

 

A source close to EA countered by suggesting that the company was miffed that it had to make the first overture to Take-Two. The source added that EA officials don't want to negotiate with Take-Two's current management team.

The Post also reports that, while the FTC is expected to bless the proposed merger, it will insist that Take-Two spin off some of its sports franchises, so as not to give EA a complete monopoly on sports games:

Though a deal would combine two of the world's largest video-game publishers, the Federal Trade Commission is expected to give the go-ahead to a potential combination by Thursday on the condition that it divest one or more of its sports gaming franchises, with basketball or hockey being the most likely.

GP: Great mashup (left) of GTA and T2 boss Strauss Zelnick accompanies the NY Post article...

As we mentioned in the previous story, EA released some surprising info today:

• it will not renew its tender offer (expiring at midnight) to buy T2 shares at $25.74
• EA and T2 have been talking, with T2 preparing a secret presentation for EX execs

For expert analysis we turned to Michael Pachter (left) of Wedbush-Morgan who told GP:

It appears that EA is proceeding with a friendly deal.  The two companies exchanged letters over the weekend, with EA saying the offer price would require review (meaning they are inclined to go lower) because the deal cannot be completed before the holidays.  Take-Two's response was an offer of due diligence, including the presentation of non-public information under a non-disclosure agreement, intended to support a higher value.

 

EA accepted the offer of a presentation, and intends to allow its hostile tender offer to expire.  This merely changes the proposal from hostile to friendly, and keeps the pressure on the FTC to rule by Thursday, as previously expected.

 

My guess is that the parties reach an accommodation shortly at a $1 - 2 premium to EA's current $25.74 offer.  We have said this consistently since February 25, and continue to believe a deal gets done this month.  If Take-Two management holds out for a price in the $30s, EA will go hostile again, likely at a price closer to $20.  If Take-Two management negotiates a price below $27.50, I think a deal gets done.

 

The only surprise to me is that EA agreed to go friendly.  I suppose that they figured it was magnanimous to make the attempt, and Take-Two management recognized that this was its last and only opportunity to affect the outcome.  I really expect the parties to reach an agreement close to the $25.74 price (slightly above).

 

I do not expect EA to be impressed with the presentation, which will include a 3-year release schedule and a list of cost control initiatives, but believe that it will allow TTWO management to save face.  EA is unconcerned about cost control, since it will eliminate most operating expense once Take-Two is integrated, and should not be particularly surprised to learn that GTA 5 and BioShock 2 are planned.
 

With its most recent tender offer for Take-Two stock expiring at midnight, EA says that it will not renew the offer. 

It seems, however, that the two companies have been talking. As per a just-issued press release, EA CEO John Riccitiello telephoned T2 chairman Strauss Zelnick on Friday. Zelnick apparently offered to provide EA execs with a secret presentation concerning T2's game schedule for through 2011.

It's unclear what EA's decision not to renew its offer portends. It could be that EA has acquired sufficient T2 stock to seize control. Or, perhaps a new offer with a revised (i.e., lower) price structure is coming. Take-Two stock (TTWO) closed at $24.84 on Friday, nearly a dollar below EA's $25.74 tender offer. As Riccitiello points out, the proposed takeover has dragged past the point where an acquisition of T2 will provide a positive impact for EA's holiday sales, so perhaps the deal is less attractive at this point.

EA also mentioned that the Federal Trade Commission will complete its anti-trust review of the proposed merger by Thursday, August 21st. The press release also included a letter dated today from Riccitiello to Zelnick as well as one Zelnick to Riccitiello dated last Friday:

Here's Riccitiello to Zelnick:

Dear Strauss:

Thank you for taking my call on Friday and for your response letter  on August 17, 2008.

 

As discussed on Friday, given the passage of time, we have to validate the assumptions used in the model to support our offer price of $25.74 per share in cash. In addition, we no longer believe we can integrate Take-Two ahead of the important holiday season. 

 

Accordingly, we require due diligence to support a transaction and are therefore letting the tender offer expire tonight. However, we are pleased to accept your offer to review your management presentation as outlined in your letter.

 

We continue to have great respect for Take-Two's creative teams and products and are hopeful that we can work together to reach a mutually agreed transaction.

And here's Zelnick to Riccitiello, dated yesterday:

Develop has a terrific interview with Rockstar Games' co-founder Sam Houser who dishes about the direction of the company and offers his reaction to critics:

I think we probably read most of [the criticism] – if you turn on a computer this stuff reaches you, usually forwarded by an old friend laughing at you. 

 

No [I don't pay attention to critics] – I think [he and brother Dan] are both depressed at how boring we really are and how unexciting even the worse fabrications and exaggerations are when you read about them. None of it seems very rock and roll...

 

Most of the people who hate us are people it is truly an honor to be hated by – reactionary creeps with strange agendas – and the Daily Mail.  Most people who know about modern pop culture know about GTA and like or dislike it on its own merits.
 

GameDaily reports on data released by Nielsen which holds that 17% of Grand Theft Auto IV buyers were under 17.

But in 39% of those cases someone else - typically a parent - actually purchased the game, which means that the actual number of unassisted underage buyers was about 10%.

While GameDaily and other outlets are finding alarm in these numbers, the 10% figure is actually twice as good as might have been expected.

Why?

In April the FTC released data showing that 20% of its underage secret shoppers successfully purchased M-rated content, the game industry's best result ever. The Nielsen data effectively doubles the game industry's ratings enforcement effectiveness. From the Nielsen report:

61% of these younger gamers indicated that they purchased the M-rated game themselves, with 39% of the young gamers responding that someone else bought the game for them," Nielsen said. "Interestingly enough, parents/guardians were pegged as the biggest facilitators for getting the controversial game into the hands of these young respondents, garnering 80% of the response. Friends, siblings and other relatives rounded out the other 20% of the response.

The GTA IV numbers also look pretty good when stacked up against a new Dartmouth study which says that 48% of minors have been exposed to R-rated movies.

GP: Obviously, you'd like to see zero sales to underage buyers, but we don't live in a perfect world. These results are a significant improvement over the 2008 FTC numbers, which were deemed extremely impressive when released.

It is great to see Nielsen providing this kind of data, as it gives context to the ratings enforcement issue. It's the kind of the data the industry ought to be providing on its own, however.

Could executves of Take-Two and Rockstar Games be prosecuted for an alleged copycat killing in Thailand?

Following local police assertions that the murder of a Bangkok cab driver was prompted by the killer's play of Grand Theft Auto, a Thai government official has called for prosecution of game publishers for instances of copycat violence.

AsiaOne Digtal quotes Somchai Jaroen-amnuaysuk of the Welfare Promotion, Protection and Empowerment of Vulnerable Groups Office:

When a player copycats a crime he or she sees in the game, the game maker should be prosecuted. Prosecutions will automatically force game makers to act more responsibly.

Perhaps Ryan Brant just wanted to be closer to his old pal Jack Thompson.

After all, the $6.1 million Palm Beach fixer-upper (left) purchased by the disgraced former Take-Two CEO is just 90 minutes from Thompson's Coral Gables compound.

In any case, the Palm Beach Daily News details the sale, including a mention of Brant's legal difficulties. GamePolitics readers may recall that Brant pleaded guilty last year to committing massive stock option fraud while running Take-Two. He received a five-year probationary sentence and had to cough up $7 million to the government to put things right.

Why should console gamers be the only ones with the opportunity to be corrupted by Grand Theft Auto IV?

According to a just-issued press release, PC gamers will get their own version of the hugely popular - and hugely controversial - game in November. The PC version of GTA IV will be released in North America on November 18th and in Europe on November 21st.

Rockstar Games founder Sam Houser is quoted in the press release:

We are very excited to be releasing the PC version of Grand Theft Auto IV. The whole team is dedicated to bringing an amazing gaming experience to the PC. The game looks and plays beautifully on PC and we can't wait for people to play it.
 

Absent speculation that Grand Theft Auto somehow played a role, the murder of a Bangkok cab driver by a 19-year-old-man in some ways appears similar to the typical murder of a cab driver in the United States.

In the U.S., cabbie killings appear to have very little to do with violent video games, given that they peaked in 1990-1993, when crude first-person shooters like Doom were the bloodiest games available and the first Grand Theft Auto was years away.

Statistics on cab driver killings are maintained by Taxi-Library, which also profiles the typical cabbie murder.

• Two-thirds of such crimes are committed by men under 20. Accused Thai killer Polwat Chinno is 19.
• 82% of the assaults take place at night. News accounts describe the Bangkok killing as taking place "late on Saturday".
• nearly half of cabbie killers act alone, as Chinno is alleged to have done

You knew it was only a matter of time.

In the wake of reports that a 19-year-old Thai man murdered a cab driver after playing Grand Theft Auto, embattled Miami attorney Jack Thompson has written a menacing e-mail to the top executives of Take-Two Interactive, publisher of the controversial series.

In the e-mail to T2 chairman Strauss Zelnick and CEO Ben Feder (and copied to dozens of other people, including GamePolitics), Thompson writes:

I warned you both that copycat killings by teens would occur upon the release of Grand Theft Auto IV. Now my prediction has come true...

In addition to multiple written warnings, I told you of this coming mayhem in a face-to-face meeting with you, Mr. Zelnick, on Central Park West on May 15, 2007... I am working with authorities now...  as well as other remedies against Take-Two for its reckless worldwide distribution of its murder simulation training products...

 

This is just the latest killing incident prompted by your murder simulators. I aim to make it the last...

PS: The above latest copycat killing will help fuel federal legislation in the United States because of your company’s chronic marketing and sale of its mature-rated video games to minors. You are selling GTA IV, for example, to anyone of any age via the Internet.

So you handled all the killing and thuggery in GTA San Andreas but found yourself traumatized by the hidden, pixelated sex?

Don't spend your Hot Coffee lawsuit settlement money just yet.

The New York Times reports that the Hot Coffee class-action lawsuit, which was nearing settlement, has been tossed by a federal judge:

...Judge Shirley Wohl Kram wrote that purchasers of the game could not be lumped together in a class action. The claims of members of the proposed class would be affected by the law in each purchaser’s home state, Judge Kram wrote, and therefore could not be resolved in a single proceeding in federal court in New York.

 

“Accordingly, the court decertifies the settlement class on the grounds that common issues do not predominate over individualized issues,” the judge wrote.

 

The judge’s latest decision undermines a settlement agreement reached between lawyers for purchasers of the game who contended they were offended by the hidden scenes, on the one hand, and lawyers for the game’s makers, Take-Two Interactive Software and Rockstar Games.

The NY Times notes that less than 3,000 GTA San Andreas buyers had applied to join the lawsuit. The paper had previously questioned the size of the plaintiffs' legal fees in the case. Meanwhile, attorney Ted Frank of Overlawyered writes:

Take Two spent millions negotiating and administering a settlement because the court refused to rule on its decertification motion last year; that wasted effort demonstrates why it is important for courts to resolve certification questions early in the case. But with no certified class, there can be no class settlement...

Frank, who joined the class and filed objections to the proposed settlement, wonders whether there will be an appeal.

The judge's ruling may be found here...

When last we visited the conservative-themed Townhall.com, blogger Kevin McCullough was claiming that Mass Effect featured customizable sodomy. McCullough's comments (since deleted) were apparently noticed by Fox News, which led to the even more memorable Cooper Lawrence debacle.

Townhall.com has jumped back into the game-bashing business with a post by blogger-author-movie critic Michael Medved who asserts that Grand Theft Auto IV is making war on middle-class values. Whatever they are...

From Medved:

Despite demagogic and alarmist claims that a relentless “War on the Middle Class” has left ordinary Americans pummeled and powerless, middle income people still manage to find enough money to secure most of life’s true necessities – like the grotesquely violent and anti-authoritarian video game Grand Theft Auto IV, which shattered all sales records in its first week of release...

 

The stunning success of a game that glorifies guerilla warfare, murder, irresponsible driving, prostitution, cop-killing, international conspiracies and, of course, car theft highlights the real threat to the American Way of Life: it’s not the war on the middle class; it’s the war on middle class values... the decision by so many consumers of every age and income group to invest countless hours of time in the dark world of Grand Theft Auto IV nonetheless demonstrates a threat to American values.

As Nate Ralph notes at Wired Game|Life, since when did "anti-authoritarian" become a bad thing? Ultimately, Medved relates GTA IV as a threat to, well, just about everything:

The vibrant economy gives working Americans more choices than ever before. The decline of middle class values – saving, deferred gratification, reliability, self-control, family loyalty, respectability – makes it somewhat less likely that they will make the right choices to promote their health, happiness and long-term prosperity.

Sega of America CEO  Simon Jeffrey (left) has issued a bit of a spanking to his counterparts at Electronic Arts over their handling of the never-ending Take-Two takeover bid.

In a wide-ranging interview with Forbes, Jeffrey said:

It feels like EA kind of needs [Take-Two], but it probably shouldn't have made it so public that it really needed it. I think that it's losing some investor confidence; the stock price is at a three-year low. And it seems like EA has been the petulant child instead of the professional market leader. However it's EA, and it's really good at coming back.

Jeffrey praised Activision in the same interview:

[Activision Chairman] Bobby Kotick is one of the smartest people in the business. The way he's constructed Activision is really admirable... Bobby has grown Activision in stages over a long number of years to get to this point. And it's very calculating and very clever the way he's done that. Activision has also managed to be the first company in this business to market games properly. Anyone who can turn a hardcore brand like "Call of Duty" into a 10 million unit seller … is outstanding.

GP: Alas, no talk of the return of the Dreamcast... (sigh)

Via:Virgin Media

A TV commerical for Grand Theft Auto 4 has dodged the censorship bullet in the U.K.

As reported by gamesindustry.biz, the Advertising Standards Authority declined to act on complaints about the spot, seen at left:

17 viewers took exception of the ad... Ten viewers complained about the violence, while seven took exception to the time of the broadcast...

 

"Although some viewers may object to the nature of the game, the ad itself did not feature sequences that were likely to have a direct harmful influence on children or young people," said the ASA.

GamePolitics readers may recall that the ASA similarly cleared a TV spot for Bully: Scholarship Edition in a ruling earlier this month.