Take-Two reveals acquisition prices, hints at future lawsuits

SEC filing reveals cost of Irrational, Firaxis, Visual Concepts; hints at two states' investigations of Hot Coffee.


After much hand-wringing and executive-level drama, Take-Two Interactive's annual report for the year of the Hot Coffee scandal has finally been filed with the Securities and Exchange Commission. And while the company's financials are essentially unchanged from the preliminary figures given earlier, there were a few revelations to be found within the crevices of the company's 10-K filing.

First and foremost, the company laid out the legal web in which it now finds itself entwined. In addition to the ongoing investigation by the Federal Trade Commission Division of Advertising Practices, a lawsuit brought against the company by the families of slain police officers, and a recently filed suit from the city attorney of Los Angeles, Hot Coffee has led to three class-action complaints against the publisher in New York and Pennsylvania, and a similar complaint in Illinois. The annual filing also sheds light on another action in Delaware Chancery Court looking to compel the company to turn over books and records regarding Grand Theft Auto: San Andreas.

Perhaps most interesting among the legal proceedings listed in the filing is that the attorneys general from North Carolina and Connecticut have also asked Take-Two for documents relating to San Andreas, perhaps foreshadowing the arrival of more litigation in the company's future.

When it wasn't combating legal woes in 2005, Take-Two was purchasing developers at a steady clip, snatching up Irrational Studios, Gaia Capitol Group, and Visual Concepts before the October 31 end of its fiscal year.

While it wasn't announced until earlier this month, Take-Two purchased BioShock developer Irrational Games last August. And while financial terms weren't disclosed at the time, the company's annual report puts the total cost of acquisition at nearly $11.8 million in a mix of cash, stock, development advances, incentives, and deferred consideration.

Two months earlier, the company acquired Gaia Capital Group (which it currently has working on the next Top Spin title) for a sum of $11.4 million. That payout was a mix of cash, development advances, and deferred consideration.

However, the big-ticket item for the year was the first one the company picked up. Back in January, the company purchased Visual Concepts from Sega for a reported $24 million, but in its annual filing, the total cost of the studio adds up to roughly $32.2 million.

Despite missing the close of Take-Two's fiscal year (albeit by less than a week), Take-Two's acquisition of Firaxis Games was also detailed in the company's annual report. The publisher picked up the developer of PC hits like Civilization and Sid Meier's Pirates for $26.7 million in cash, stock, and development advances, with almost $11.3 million of that figure coming in the form of possible considerations based on future product sales.

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