Take-Two bulks up on baseball; adds MLBP, MLBAM to partner lineup

The executives at Take-Two Interactive have been eating their Wheaties.

After enduring an onslaught of news in the past month that has seen two major licenses, the NFL and ESPN, pulled from its grips, the publisher has a few sports highlights of its own to dazzle the game industry with.

Now, exactly a week after a near-exclusive deal with the Major League Baseball Players Association was publicized by the league itself--with no word coming from Take-Two on deal points or other specifics--executives at Take-Two are ready to break their silence.

Take-Two Interactive Software, Inc. will announce on Monday that the company has entered into a long-term licensing agreement with Major League Baseball Properties (MLBP), the Major League Baseball Players Association (MLBPA), and Major League Baseball Advanced Media (MLBAM).

The deal, which goes into effect spring 2006, gives the GTA publisher exclusive rights to publish and distribute officially licensed games for consoles, PC, and handheld platforms. Take-Two says it plans to offer "multiple titles based on traditional baseball simulation, arcade and manager-style games."

Executives declined to specify the length of the agreements, but industry sources said depending on the specific partner, terms were for either seven or eight years. Likewise, no mention of what Take-Two paid for the rights was announced (although media reports last week put the value of the MLBPA deal alone at a low of $80 million and a high of $150 million).

While many key elements of the deal have already been disclosed by the MLBPA, a couple of updates lend additional drama to an already complicated and ferociously competitive sports-licensing landscape.

The sweeping deal will give Take-Two "exclusives, include rights to the marks of all 30 Major League Baseball Clubs, MLB players, Major League ballparks and Minor League Baseball Clubs, as well as MLB.com online content, for use in Take-Two's baseball games," according to the groups.

In addition, Take-Two and MLB have put all other third-party publishers on notice that no wiggle room exists for their entry into the MLB-licensed space. The deal allows only the major console manufacturers, Nintendo, Sony, and Microsoft, the "right to enter into development agreements for MLB games specific to their particular platforms."

Earlier, many industry observers saw an opportunity for publishers, such as Electronic Arts, to collaborate with the manufacturers, possibly to cobrand MLB-licensed games. The agreement effectively closes that opening.

"All other third-party publishers and developers are precluded from publishing officially licensed MLB simulation, arcade, and manager-style games, either directly or in affiliation with a hardware manufacturer, during the length of the exclusives," the groups said.

In a statement, Take-Two execs call that move "consistent with Take-Two's desire for continued consumer choice."

Hoping to bring added sizzle to the baseball space, Take-Two says it will introduce more games and will distribute them with greater frequency than the industry is used to. While it seems likely a flight of games timed with the start of baseball season in the spring is a given, Take-Two says it will focus additional strategic energy on the "key, the holiday-selling season." The company has plans to release licensed baseball games "year-round."

For some additional details on the alliance, GameSpot spoke with Take-Two president Paul Eibeler over the weekend.

GameSpot: It's hard not to view the divvying up of sports and sports-related licenses over the past few weeks without thinking about it in terms of a huge rivalry between the two publishing heavyweights, Take-Two and Electronic Arts. Would you concur that that's an accurate filter?

Paul Eibeler: I think it's a great compliment to us, because a year ago we weren't in sports.

GS: How much of what Take-Two does, strategically, is driven by the competition, and specifically, by EA?

PE: Well, its driven by a competitive marketplace and EA is one part of that competitive marketplace--certainly a big part and a very big part in sports. We're finding the marketplace very competitive, but we're also finding a lot of opportunities, given our size, our marketing muscle, and our distribution strength, to get more opportunities.

GS: Your move into sports is fairly dramatic. What's behind that?

PE: It's just part of our diversification program, or plan. We have some really big brands in the Rockstar area and we're looking to complement those plans with some products with 2K Games, which will encompass 2K Sports.

GS: A lot of people don't see a huge upside in the area of baseball when they look at sports. What sort of potential do you see with baseball?

PE: I probably disagree with you, as there were a lot of companies in the [baseball] marketplace in the past, so they all thought there was a great market--it is the American pastime.

GS: You mention you intend to release baseball products throughout the year…

PE: The one thing that's hard to change is that the start of the season is in the spring. So we view it as an opportunity to try and find ways, from a marketing standpoint, to expand the season. Certainly in October there's a lot of excitement about baseball and it doesn't have to drop off. We also think with online connectivity, baseball has a lot of potential that hasn't been exploited in the past. We're excited--and we have some real diehard baseball fans in our organization that are equally as excited.

GS: What plans are in place, in terms of frequency of product?

PE: Well, the first plans are to take advantage of all the console systems and the new portable systems. Baseball in the past has not had a big presence on the portables, and we think, particularly with the PSP and DS, there's a big opportunity. And we think that the market is growing from an international standpoint. So we don't want to talk about everything we're doing, but we think there are ways to position the product differently at different times of the year, not just at the start of the season.

GS: What are the downstream possibilities for working with MLB.com and seeing some of what you do in the gamespace surface online?

PE: It's too early to tell how it will come out, but we'll work real closely with them.

GS: Why specify the preclusion of third-party publishers?

PE: We just never felt it was our position to cut out the hardware companies. We look forward to working with the hardware companies and we think that it's beneficial for us to be a partner with them, not the one that cuts them out of the business.

From day one, in all our conversations, starting with football, we said that we don't believe in the exclusive marketplace. We believe that there should be a competitive marketplace, and this is just a way of that falling into that presentation.

GS: And the league's perspective?

PE: When the leagues came to us, they said: give us proposals for nonexclusive and exclusive scenarios. And they came to us with all different types of proposals.

GS: What do you say to shareholders who might feel differently, who might say: "Hey guys, why don't you get an exclusive? There's more control of pricing, there's more control of the release schedule. There's just a greater ability to drive more revenue out of the deal."

PE: First, our shareholders have to be pleased, because a year ago we weren't in sports, and this shows major steps towards diversifying our product line.

Second, and to generalize, we would say that we are an exclusive third-party company with the American pastime. We did that in a very short period of time, where we were recognized by Major League Baseball as the partner to be with.

Third, we work very, very closely with Sony, and that relationship is extremely important to us. So, we have to make some real smart management decisions to protect [and] keep that relationship strong. This was just one way of doing that.

GS: Have you worked with Jeter before?

PE: In my prior life [at Acclaim] I worked with him. Jeter is the one superstar recognized, not just in the baseball world, but really as a totally classy individual. He's just a guy that everyone identifies with, who has really risen above even superstar status.

We're excited because of what he stands for, and the people that he reaches. Everyone knows Jeter. Everyone loves him.

GS: How are you going to split the work between the two studios, Visual Concepts and Kush?

PE: Kush is the one working on the baseball game, and is really devoted towards baseball; they also do the hockey products. Visual Concepts has just done an unbelievable job on the basketball product, so they will stay in the basketball market. And we have a great football team there of very talented guys. We're exploring different opportunities of what to do with that team.

GS: People talk about the NBA license as the next one that will come under scrutiny, and probably go to just one publisher…

PE: No, it's under scrutiny already.

GS: Will you have news on that topic?

PE: We have a great relationship with them. They, in the past, have been very open to the non-exclusive category. There really hasn't been one dominant player there. We have a very, very strong working relationship with them; they're very pleased with the business this year.

We'll let you know when they make those decisions, but we feel very good about our relationship with them. We have in basketball a product that we view as very, very strong and we're excited about the future with them.

GS: Does the diversification of the Take-Two Interactive software library address any sort of diminishing in the future of the GTA brand?

PE: No. I would say to anyone that Grand Theft Auto is the biggest brand in the industry. Our Rockstar guys have set the world apart with Grand Theft Auto 3, then beating expectations on Vice City, and then San Andreas.

I clearly think that we beat expectations in the marketplace from a gaming standpoint, and now that it's starting to result in sales information that's out there…it's a wholly owned, internally developed product, so we have nothing but great expectations and plans for that brand and that game.

Even last year, with Red Dead Revolver and Manhunt [selling] 2 million units a year--in a year that people said it was tough to introduce new brands--we're totally committed [to Grand Theft Auto].

What we just have to do as a public company, and also strategically, is to take advantage of our strength in the marketplace [and] to complement Rockstar with other additional strong products, and sports is one part of our diversification.

You look at what we did last week with the announcement on Civilization...and what we did in purchasing Indie Built. That studio brought us Top Spin and Links and Amped technology. I think it's all positive.

If anything, it's the opposite. The Rockstar brand continues to grow and products like Grand Theft Auto continue to get even bigger. And we'll continue to support them. So it's really quite the opposite.