Pachter: 'Progressive Weakening' Of Take-Two Led To EA Takeover Attempt

Author: by Staff

Talking as part of a new Gamasutra feature on consolidation in the game biz, Wedbush Morgan's Michael Pachter has criticized Take-Two's "progressive weakening" as the main reason for the Electronic Arts take-over attempt. While answering the question on why there has been such a strong "urge to merge", the analyst weighed in on Take-Two's performance over the past few years, leveling specific criticisms on why the publisher has left itself vulnerable to takeover: "As far as EA/Take-Two are concerned, Take-Two has progressively weakened over the last seven years, in spite of the phenomenal success of the Grand Theft Auto franchise. The company has had six CEOs in seven years, and the frequent change at the top has cost it a lot of continuity. It made several bad decisions (several failed licenses: 24, The Da Vinci Code) made a disastrous foray into sports, and has continued to chase cool new franchises (BioShock, Borderlands, LA Noire) while letting older franchises (Max Payne, Red Dead Revolver) fade into oblivion. The company also made really poor choices on sequels (Manhunt and Bully), instead of focusing resources on properties that had worked in the past. So EA sees a company in trouble, and is seizing the opportunity to capture GTA." Elsewhere in the piece, Screen Digest's Ed Barton notes of the potential deal between Electronic Arts and Take-Two, which is still in play, but is being strenuously resisted by Take-Two: "With EA and Take-Two, the story is more about domination of the U.S. market and combining some of the most exciting gaming IP around today. There is another significant quick win in the overlap between their sports games publishing operations with immediate savings to be realized, as well as market share gains, by eliminating duplication." You can now read the full Gamasutra feature on the subject, including lots more analyst discussion of what other companies might be acquired or merged together in the near future.