Take-Two May be Shopping for a Buyer
by Keith Sadler, posted on 22 July 2011 / 1,928 Views
It’s been a long-standing rumor that Duke Nukem Forever developer Take-Two has been shopping for an acquisition partner. Take-Two COO Karl Slatoff hasn’t exactly confirmed the rumor (during an interview with IndustryGamers) he did say they’d be an attractive investment opportunity.
I would agree with the analysts that you’re referring to [Wedbush Morgan], that our IP obviously makes us a very attractive investment for anybody, whether it’s a separate company or an individual investor, an institutional investor or a retail investor. I do think we have the best IP out there and we’re continuing to invest in it. And that’s our strategy.
The relevant quote from a Wedbush Morgan investor note: "Take-Two’s share price has stalled due to numerous game delays and disappointing reviews of Duke Nukem Forever , but we expect Take-Two’s commitment to high quality games to translate into consistent profits and share price appreciation."
In 2008 Take-Two was singing a different tune. Electronic Arts were desperately trying to buy them out prior to the release of Grand Theft Auto IV, and Take-Two firmly believed that staying independent was the way to go.
At the core of it, we believe that the most value that you can create in an organization - an entertainment organization - is to build franchise value. And the way to build franchise value - at least our approach to building franchise value - is to go for quality in “triple A” development versus quantity. And I think we’ve proven that we’ve been able to create these franchises and they go from generation to generation... But in terms of remaining independent or not independent, I think we’re a fantastic company as an independent company and we’ve shown our ability to thrive in that environment. But, like I said before, we’re a great investment for any kind of investor, in my opinion.
Ironically, Activision may be one of the only companies capable of buying Take-Two, and you’d be hard-pressed to find a more ideologically divergent set of companies. Activision is well known among fans for “franchise fatigue” putting out a new sequel for a game simply because it has been a year since they last did so.
At the end of the day, you always want a balance of sequels and new IP because you keep the pipeline going. If you have franchises, by definition, you want to have sequels. And you’re building an audience. The trick is - and I think this speaks to our strategy - making sure that every time you release something (it may be a sequel within a franchise), you make sure it’s fresh and it’s something new, which is one of the reasons why you don’t see us releasing something every year... we don’t come out with a BioShock every year or a Grand Theft Auto every year. We don’t do that. Sports [are] different because sports [are] going to be a yearly thing. But every time we do something we need to make sure that it’s building value for that franchise, and not just releasing it because we can.
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