So, EA's trying to buy Take 2/2K. Wait, WHAT THE ****?!

kcxiv · 02-25-2008, 06:21 PM

http://gamepolitics.com/2008/02/25/p...-gta-is-gravy/

Good article, i mean its mostly common sense, but its still a good read.

Pachter: Sports Drives T2 Deal for EA; GTA is “Gravy”

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…

02-25-2008, 02:33 PM	#1
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02-25-2008, 06:21 PM	#2
kcxiv In Search of a Life Join Date: Mar 2005 Location: Central Valley, Cali Casino cash: $8697996	http://gamepolitics.com/2008/02/25/p...-gta-is-gravy/ Good article, i mean its mostly common sense, but its still a good read. Pachter: Sports Drives T2 Deal for EA; GTA is “Gravy” 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…
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