EA bullish on Take-Two plans

"We delayed until we were certain we weren't screwing with GTA," says Riccitiello; stresses that Take-Two's value is only going to go down.


Grand Theft Auto IV

In a conference call today with investors, Electronic Arts' senior management team made it abundantly clear that they thought that not only was their offer for Take-Two full and fair--despite the latter publisher's protestations--but that now was the best time for both companies' developers, shareholders, and customers.

Regarding the impending GTA IV release, EA CEO John Riccitiello said that he felt that at this stage the only things left to do in the release process for GTA IV were "mechanical," given the nature of the run-up to such a big title. Advertising, retail space, and manufacturing across both Xbox 360 and PlayStation 3 would need to have been locked down already, according to Riccitiello, and as such he felt now was the perfect time to go public with EA's offer.

"We delayed until we were certain we weren't screwing with GTA," Riccitiello explained in light of the back-and-forth between the two firms yesterday.

Timing was a recurring theme throughout the call as EA stressed that the total value of the acquisition, which formed the basis for its $26-a-share offer, was predicated on a rapid completion of the deal. Take-Two's directors, and Strauss Zelnick in particular, were urged to come to the table promptly in order to maximise value for their own shareholders.

EA was not slow to point out the problems it perceived in Take-Two's management structure, and cast doubt on its long-term viability as a publisher due to "financial, legal, and operational issues," making the point that in the current gaming market only the biggest fish would survive. Pointing out repeatedly that Take-Two lacked the resources to maximise the potential of its intellectual property, Riccitiello said that EA would provide the best possible home for Take-Two's studios, suggesting his firm would do "a better job for them than anyone else."

When asked about how development of recent titles at Take-Two might have differed had EA been in charge, and pressed on the subject of BioShock in particular, Riccitiello said: "I wouldn't change a line of code; nor would I in GTA or Max Payne. What we'd do is sell more of it--very cost-efficiently." EA also made it clear that it would try to make more money off Take-Two's franchises by not only pushing them harder in smaller markets where Take-Two might not have been able to operate efficiently by itself--South America and Eastern Europe, for example--but also by providing the resources to bring titles to more platforms than would be possible given Take-Two's comparatively limited resources.

EA also shrugged off talk of corporate culture issues hampering the effectiveness of the potential combined company going forward. The megapublisher's label model was "in some way inspired by Rockstar," according to Riccitiello, who went on to say that the cultural differences between EA and Take-Two were no greater than those among EA's existing studios.

Concerns about the 2K Sports brands, and the damage that the acquisition might do to competition were generally skirted. When the matter was pressed EA made it clear that it felt there was still lots of competition in the sports space, with the likes of Wii Sports, the Tony Hawk franchise, Virtua Tennis and Hot Shots Golf likely to keep EA Sports on its toes for some time.

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