Take-Two reveals EA bid cost, earnings breakdown

By Tor Thorsen, GameSpotPosted Dec 19, 2008 2:51 pm PT

SEC filing reveals publisher spent $11.1 million blocking takeover; 82% of earnings from current-gen consoles, with PS3 the top earner; ZelnickMedia paid $2.5 million management fee.

On Wednesday, Take-Two Interactive reported a record $1.5 billion in annual revenues and $97 million in annual profit, but saw its stock slide due to lower-than-expected quarterly earnings. Today, the New York-based publisher revealed the details of its 2008 fiscal year, which ended October 31, via a filing with the Securities and Exchange Commission (SEC).

Buried among the facts and figures were a series of interesting bits of information about the company. First, Take-Two spent a not-so-small fortune staving off the advances of Electronic Arts, which gave up its seven-month-long takeover bid in September. "We incurred $11.1 million of costs in 2008 related to the EA Offer and our strategic review process," the publisher reported.

Spearheading the defense against EA's bid was Take-Two chairman and Men's Fitness cover athlete Strauss Zelnick (pictured), who presided over the company's roller-coaster ride on the NASDAQ stock market. When EA first offered $26 for each of its rival's shares, the Grand Theft Auto IV-maker's stock price went from $17 to a 52-week high of $27.95 on June 2. Once EA walked away, though, the bottom dropped out of Take-Two's share price, which was below $8.50 as of press time.

Although some executives would be fired over such a dramatic devaluation, Zelnick is instead being handsomely rewarded. Though his official annual salary is just $1, his company, ZelnickMedia, was paid $2.5 million in "management fees" by Take-Two during its last fiscal year. It also received a restricted stock grant of 600,000 shares that will vest over the next three years. Additionally, if Take-Two meets certain performance requirements, ZelnickMedia stands to receive an extra $2.5 million, and a 900,000-share, four-year vested stock grant.

Speaking of earnings, Take-Two's SEC filing also dissected its sources of revenue. Some 82.3 percent of its net publishing revenues comes from current-generation platforms. Of that, the company took in $347.0 million from PlayStation 3 games, $281.5 million from the Xbox 360, and $112.0 million in Wii sales. The former two figures were driven by GTAIV, whereas the latter owes its success to Top Spin 3, Major League Baseball 2K8, and the Carnival Games casual series. Interestingly, Take-Two considers the DS a previous-generation system along with the PlayStation 2.

Territory-wise, 43.5 percent of Take-Two's annual take came from outside North America, up from 34.7 percent the year prior. The company made $33.2 million from its deal with Capcom to localize and sell Grand Theft Auto games in Japan. Annual earnings rose by $20.4 million thanks to the strength of foreign currencies, with Take-Two crediting the surging Canadian dollar as a major factor.

93 Comments

  • 00Rambol00

    Posted Jan 4, 2009 4:35 pm PT

    Havent EA got enough money?

    EA obviously want more if they wanted to buyout TakeTwo, GTA IV sold quite well

  • tyzwain

    Posted Jan 4, 2009 6:23 am PT

    Lol well if they're really hitting it with the costs of the EA take-over, I'm sure microsoft payed a pretty price ti get exlucisve DLC for GTAIV. Only thing that annoys me is that its free for PC users.

  • campbell1874

    Posted Dec 30, 2008 8:56 am PT

    Gamer1729 what are you talking about. The PS3 had more games released last year from Take-Two meaning some of the other games had to make up some of the total.

  • Gamer1729

    Posted Dec 28, 2008 6:57 pm PT

    "$347.0 million from PlayStation 3 games, $281.5 million from the Xbox 360, and $112.0 million in Wii sales" to me implies there is something really worng with GTAIV exlusive content on the Xbox 360.

  • Mr_Versipellis

    Posted Dec 28, 2008 7:31 am PT

    Yay! Take that, EA! Oh, if only they hadn't taken over BioWare... You know thae scary thing is that if EA had succeeded The Elder Scrolls V could have come out with an EA badge... AHHHHHHHHHHHHH!

  • CY4N1D3_625

    Posted Dec 28, 2008 2:37 am PT

    I agree with VenomRitual; EA ain't a bad publisher, it's just with them trying to swallow up some really good developers (T2, Bioware), just goes to show that EA couldn't make a good game for themselves if they tried. They used to be alright....

  • auspicious12345

    Posted Dec 27, 2008 2:51 pm PT

    hahahaha, not profitable to publish on ps3 eh? what now brown cow?

  • killzone_gamer

    Posted Dec 27, 2008 8:57 am PT

    Hoo-ray for teh moneyz!

  • Myzz617

    Posted Dec 26, 2008 9:41 pm PT

    PS3 FTW??? Lmaoo oo boy let me hear it? NAU ftw as out dollar will suck for years to come.

  • VenomRitual

    Posted Dec 26, 2008 4:25 pm PT

    11.1 million cost that they didn't plan for. ugh EA. great publisher, but this defenitely cost you karma

  • donscrillinger

    Posted Dec 26, 2008 1:31 pm PT

    the 360 is an very nice system and i have every game 2k and rockstar makes on it .. thx you for making games i LOVE 2K .Now only if they could get that NFL deal on the Table Agian ...

  • jimbob_1977

    Posted Dec 26, 2008 12:30 pm PT

    @angelcage-2: ps3 have exclusive dlc for bioshock - what more do you want?

  • AngelCage-2

    Posted Dec 26, 2008 12:04 pm PT

    So, PS3 gives them more money that 360, but Still, ps3 orners don't have any sign of DLC.... way to go Take Two.

  • Wings_008

    Posted Dec 26, 2008 3:53 am PT

    actually this is a good thing (for us of course) because it will mean more games and much more refined material over the next year

  • gerardlindsay

    Posted Dec 25, 2008 10:59 am PT

    Guys, keep in mind the operating year of interest. The higher PS3 revenues may very well be explained by titles such as BioShock (by 2K games, a subsidiary of T2 as is Rockstar). BioShock on X360 (and PC) released more than a year prior to the (recent) release on the PS3. In other words, BioShock's sales in this period may predominantly accrue from the PS3 and consequently boost T2's earnings attributed to that platform. All in all, further digging must be done before firm conclusions can be drawn about the data on T2's revenues. (Hmmm........At the same time no other BioShock-like examples come to mind........Anyone?)

  • mark_unix

    Posted Dec 24, 2008 10:38 pm PT

    their profits only prove microsofts numbers aren't right, and goes to point there are actually more PS3's in use.

    i suspect microsoft has been upping it's sales numbers thanks to the red-ring-of-death, and microsoft is stuck with 5million defect consoles they add as being in use (while not only take2's sales show there are already more PS3 actually in the hands of users)

  • Mike_Labeckio

    Posted Dec 24, 2008 6:04 pm PT

    I'd like to see a story about EA's stand on maintaining League and player licences. As stated in another artical about EA looking to change the way the consumer views them as a company, EA seemed to be disheartened by the rising cost of Sport licences. I wonder if there might be a change to the way they do buisness to include or maybe adapt a partner ship in owning these licences. Split the cost and bust their butts to get the consumer dollar, while maintaining a matching price point as to not create annomosity with a prospective licence partner.

  • Locuzt

    Posted Dec 24, 2008 6:00 pm PT

    Why is it ok for Blizzard to monopolise the game industry but not EA? seriuosly, Take-two will prop be bought at some point, only question is by whom? Blizz or EA?

  • hugociss

    Posted Dec 24, 2008 12:07 am PT

    it is better for us (costumers) if take-2 continues to work independatly, it encourages both rivals to make their games better than the other, furthermore, we would get the both of sides if they do not merge.

  • eortlieb

    Posted Dec 23, 2008 10:46 pm PT

    CMakaCreative,
    And if it goes down to $4.25, you've just lost half of your money.
    Don't bet on this stock unless you've got some extra Christmas cash that you wouldn't mind losing if worse comes to worse.

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