Gamasutra's report on that OTX Gameplan Insight research shows that, for at least two titles, Xbox 360 owners are planning to invest in the PS3 versions of holiday sequels more so than the other way around. Both Assassin's Creed II and Modern Warfare 2 are seeing a shift in platform choice that favors the PS3, according to OTX.

Why defect? Gamasutra's report doesn't speculate on that, but one might assume the reasons are two-fold. In the case of Modern Warfare 2, the option to play the game's multiplayer portions without the need for an Xbox Live Gold account may be a factor.

The other may simply be the expanded PS3 console ownership following the system's recent price drop. Both titles appear to be feature equal, but the allure of buying games for the new console you just invested in, well, that might be enough to make the switch. Any other theories?

Analysis: Xbox 360 Gamers Defecting To PS3 For Holiday Sequels? [Gamasutra]

What analysts and strategists are calling "unsubstantiated chatter" had a profound effect on EA stock today, rising 8.1 percent to $20.01 during Nasdaq trading this afternoon.

"There's talk that Microsoft might be interested in acquiring Electronic Arts. It's unsubstantiated chatter, but it's out there," said Frederic Ruffy, an options strategist at WhatsTrading.com in New York.

And sometimes being out there is more than enough. Microsoft shares also rose during the day, gaining 1.1 percent to $26.05, despite analysts claiming that such a move makes no sense whatsoever.

But Trip Chowdhry, an analyst at Global Equities Research, said Electronic Arts was not on Microsoft's "radar screen" based on his industry contacts. "Our contacts just don't see Microsoft buying Electronic Arts, no synergies whatsoever, and also not Microsoft's corporate primary focus right now," Chowdhry wrote in an e-mailed note.

A quick glance about the internet finds that analysts largely agree - this doesn't seem like a likely move. Still, we've reached out to Microsoft and EA alike, and will update the story once we receive any response.

UPDATE: We just received a comment from Microsoft. "Microsoft has no plans to purchase Electronic Arts." Clears that right up, now doesn't it?

Electronic Arts stock up on takeover talk-traders [Reuters - Thanks David!]

Tap Tap Revenge is only 1 of 122 games to make internet information provider Comscore's list of the 25 most popular iPhone applications, with a penetration of 32% among Apple app users. This basically means that 32% of iPhone and iPod Touch owners who have used the App Store have purchased Tap Tap Revenge, 5% more than the second place application, Stylem Media's Backgrounds. Venture Beat takes this 32% and multiplies it by Admob's estimate of a 15 million strong Apple mobile user base, determining that Tap Tap Revenge has an install base of nearly 4.8 million users. That's rather insane.

Other games making the list include old favorites like Pac-Man, Hangman, and Soduku, interspersed with newer titles like Lightsaber Unleashed and Touch Hockey FS5.

Behold, marketers - some iPhone numbers you can work with, finally [Venture Beat via Gamasutra]

One analyst, Piers Harding-Rolls from Screen Digest says that his firm thinks that next year could be Sony's year. "We always felt that 2008 was the year that PS3 kicked off - but we think that will now be 2009," he says.

Yes, this is the same Screen Digest that projected that the PlayStation 3 would dominate, with the Wii slipping to third by 2010. That was extremely early in this console generation and, obviously, things have changed.

"When we looked at the 360 at the beginning of the year we didn't think it was going to do as well as it has done," Harding-Rolls tells the BBC. The analyst firm probably also hadn't taken into account Sony's reluctance to embrace price drops in favor of breaking even on hardware.

Crowning the king of the consoles [BBC]

The problem is in the 'Casual' bit. The scores of newly minted gamers attracted to shorter, shallower games are more likely to ditch them when the going gets expensive, says Piers Harding-Rolls of Screen Digest, "We are not sure how the recession will affect the buying habits of these new, more casual mainstream consumers. [They] are more likely to view gaming as a discretionary luxury."

Equally, though, once they are hooked on videogames might we expect the casual crowd to seek out games with a bit more depth and longevity, just in terms of bangs per buck? Maybe a shift from Solitaire to Final Fantasy will be the downturn's lasting legacy for gaming.

Analysts Fear For Nintendo [Escapist]

"Currently, we expect unit sales to decline by more than 50 percent series-over-series for November," said EEDAR's Jesse Divnich, "This is coming off the October month where series-over-series units declined by more than 60 percent."

Despite this, EEDAR believe that Guitar Hero, Rock Band and maybe even Guitar Praise are around for the long haul.

"In fact, we expect Guitar Hero and Rock Band releases for the next 10 years as they will always have a large and loyal market base, just as [Dance Dance Revolution] is still today a very profitable franchise for Konami, even though that series reached its peak a long time ago."

Guitar Hero "Reaching its Peak" - Analyst [Edge]

I love my little Eee - it is incredibly handy for a blogging from the sofa or carrying about to events - but a games machine it is definitely not. It does do Flash though, and I have certainly enjoyed a spot of Tower Defence on the little fella. Market pundit iStockAnalyst, however, reckons things could get even bigger for the small.

"They cannot store and run big and complex games internally. They make up for this by having brilliant connectivity. So they are the perfect tool for playing online games such as MMOs and the contents of all the casual gaming portals."

Netbook boom bodes well for casual gaming [CasualGaming.Biz]

Wedbush Morgan's Michael Pachter predicts that some titles, like Tomb Raider Underworld and Shaun White Snowboarding simply don't have the buzz surrounding them. (Pachter calls the PlayStation 3 and Xbox 360 versions of Shaun White "not positioned well" which I would absolutely agree with — I thought it was a Wii-only title for longer than I'd like to admit.)

Were they to be released during a less crowded time of the year, I could see them doing well, but game budgets get a little tighter this time of year and the list of must haves is typically bloated.

Jesse Divnich of EEDAR points to other titles, things like Banjo Kazooie: Nuts & Bolts and Spider-Man: Web of Shadows as destined to be ignored. "Any other title that squeaks by with quality scores below 80 percent" is also due to suffer, Divnich adds.

Analysts Predict Misses Of 2008 Holiday Season [Gamasutra]

Pachter's reasoning, in comments to GamePro, is that the next-gen consoles are not truly mass-market items yet, and won't be until their price point dips to $199.

"Around 90% of last-generation console sales were made at the $199 price point or below," he says. "Only wealthy or hardcore gamers have purchased consoles so far, given that the PS3 is still $399, the 360 is still $349, and the Wii is still $249. When prices drop below $200 (probably in 2010), the mass market [for 360 and PS3] will emerge."

Pachter's been on the warpath for console price cuts, predicting a $50 drop this holiday season for the PS3 and 360 as the console makers try in vain to duplicate last year's stellar sales figures. He's also said the current next-gen line is going to drop below 10 percent growth by 2010 unless they lop $150 off current prices.

The Wii below $200, that's a solid bet. But good gosh, considering Sony's lost more than $3 billion so far, pricing the PS3 below its production cost, can anyone really think we'll see that unit below $200? Or the 360, for that matter? And if makers did follow his predictions, there would be about a one-year mass market for these consoles before market forces dictated the next next-gen console for us wealthy hardcore gamers, around 2011. If that's when these consoles finally enter the mass market, and how long they'll stay, how many good games will we really see in that span?

Price, not GTAIV to Blame for Slow PS3, 360 Sales Analyst Says [GamePro]

"We believe the transaction is set to create a formidable new digital media powerhouse and the most valuable interactive entertainment company worldwide, unlocking the value of industry juggernaut World of Warcraft, and possibly also setting a new benchmark for profit margins among publicly traded video game pure-plays"

Along with the rosy outlook, Sebastian is raising the company's target price (the price at which buyers will purchase the stock) from $33 to $40.

Activision Blizzard formation set for July 8 [GamesIndustry.biz]

Janco Partners analyst Mike Hickey said that going toe-to-toe with GTA IV on content is "an unusually pompous position... considering GTA IV is estimated to be the highest grossing 1st week entertainment release of all time."

Hickey also nodded to GTA IV's Metacritic-leading score, and maintained his "conservative" estimate for Saints Row 2 sales, "in light of mediocre game previews and a delayed release in-part from quality concerns."

In general, it seems a bit of a risky strategy for any title to compare itself, even jokingly, to a sales record-smasher like GTA IV. When I spoke to THQ during their preview event, though, a rep told me the aim was to show what was different about Saints Row, not necessarily to make superiority claims.

Hickey: Saint's Row 2 'Pompous' To Attack GTA IV [Gamasutra]

You may recall our Very Special Kotaku Feature earlier this year titled "Analyzing the Analysts," in which tireless former Kotaku intern Tori Floyd weighed game industry analysts against one another. The result? Wedbush Morgan's Michael Pachter scored the highest among his peers in terms of how often he was correct. Yeah, we totally called it.

In an email sent to the press titled "Some Tireless Self-Promotion," Pachter discussed the award:

"I take more than my fair share of criticism for being 'the worst analyst in the industry, bar none'(paraphrased from a quote last week)," Pachter said.

"Sell-side analysts are paid to understand the earnings potential of the companies they cover, so our earnings accuracy is quite important. The closer we are to the mark, the more credible we are to buy-side clients. Notwithstanding many of my outlandish (and often wrong) predictions, I take a great deal of pride in my ability to forecast the earnings of the companies I cover."

"I’m happy to continue to take shots on the many occasions when I’m wrong; just thought you would be interested in seeing that I am recognized as being competent in the one area most important in justifying my compensation ... Thanks to all of you for your continued indulgence."

Congrats Michael!

What does this mean for EA's ongoing bid for Take-Two? Cowen and Co. analyst Doug Creutz said this morning that even the GTA IV launch couldn't have elevated the share price from January's 17 dollars per share to its current 26-dollar range, and that right now the elevated price is due to investor eagerness for the sale.

"Take-Two's self-imposed moratorium [on negotiations] is over," said Creutz. "We haven't heard anything out of either company in the last week. They could be talking... I still think the odds that the deal happens that are very high... I don't think GTA changes that at all."

Just how high are those odds? EA continues to point to the ticking clock, and just recently told GamesIndustry.biz that the chances of a deal happening are "now 50/50 at best."

"I think it's more like 80/20," said Creutz.

To understand the likelihood, Creutz cites an example from elsewhere in the market. Adjacent to this ongoing battle, we've seen Microsoft launch a similarly aggressive bid to acquire Yahoo! — and fail. But according to Creutz, the EA-Take-Two bid is an opposite scenario in every way. "EA's shareholders want this deal to happen; they understand how potentially accretive this deal is," he said.

"If you compare this to Microsoft and Yahoo!... Microsoft shareholders didn't really want the deal, and Yahoo!'s management wanted to stay in charge. EA shareholders do want this, and Take-Two management have a lot of incentive to cash out so they can move onto the next project."

A Take-Two spokesperson said today that the Board will do "the right thing" for its stockholders: "Toward that end, we are committed to a process of considering all strategic alternatives to maximize stockholder value, including remaining independent. We have said that we were willing to begin formal discussions with interested parties on April 30th, after the launch of GTA IV, and we have continued to observe that timetable."

The spokesperson also reiterated it had received interest from "various parties" since the EA bid went public, but analysts have repeatedly noted a so-called "white knight" has yet to appear.

Creutz is of the opinion that EA will have to bid a little higher to make the deal happen. "EA can cut a lot of costs [in the event of an acquisition]," he said. "They don't have to have Strauss [Zelnick] and Ben [Feder] around; they can get rid of the corporate overhead. There's a lot of cost synergy with sales and marketing reorganizations and probably on the R & D side. A deal has the potential to add a lot to EA's earnings power; because of that, they can afford to pay more."

So why hasn't EA raised its bid? "You don't go public with your best offer; it's negotiating 101," said Creutz. "I think EA's willing to raise the bid once to get it done, but they have to take a hard line, otherwise Zelnick is going to walk all over them. Zelnick has to play it the same way."

"It's a game of chicken. Neither of them really wants to lose here, and neither of them wants this to blow up."

Are the parties talking? What does Take-Two consider an adequate offer? "We are not going to comment on specific conversations with third parties, nor will we speculate about the 'right' stock price," said the spokesperson.

Creutz also suspects bravado has a big role to play in this "game of chicken" — "If this deal doesn't happen, it's because egos got in the way, and both sides are going to walk away feeling a little stupid that they let this slip through their fingers," he said.

EA's Jeff Brown was unavailable for comment.

THQ's survived a series of hard knocks in the market thanks to the strength of its kid-friendly titles based on licenses from the likes of Nickelodeon and Pixar, even while its stock has taken a serious dive since January of this year. The company's about to announce its fiscal fourth quarter results tomorrow - as a new year begins for THQ, is it on track for smoother sailing?

It's been somewhat of a mixed bag for THQ over the last few months - the company saw a studio acquisition (Big Huge Games) at the beginning of 2008, while on the other hand, its Sandblast and Rainbow studios just recently saw layoffs, according to reports. While it's canned a couple of its former key franchises, Stuntman and Juiced, it saw a boost in sales last quarter thanks largely to its WWE SmackDown vs. Raw 2008 and MX vs. ATV Untamed.

Thanks mainly to its family portfolio, though, THQ's hung in there, and most analysts seem to believe the worst is behind the company, seeing them poised to climb in the year ahead thanks to more attractive license opportunities for 2009 — for example, analysts frequently comment that they expect THQ's upcoming game based on Wall-E to perform better than did the Ratatouille game, because robots are more likable than rats.

Both Cowan Group analyst Doug Creutz and Wedbush Morgan's Michael Pachter expect THQ to remain a little conservative on its 2009 estimates, since it turned out to disappoint on last year. Still, Creutz says the publisher can outperform the overall market by 20 percent, while Pachter thinks it'll stay in line with overall market growth of 10-15 percent.

So with games based on more Nick properties including The Naked Brothers Band: The Video Game, Tak and the Power of Juju, Avatar: The Last Airbender, SpongeBob Squarepants and Back at the Barnyard, THQ may turn a cautiously optimistic eye to the future — we'll see when results and future guidance are revealed tomorrow.

For more details on THQ's upcoming Nickelodeon portfolio, check out our earlier story. Note the "parkour-inspired" gameplay for the Tak and the Power of Juju game — everyone's catching the parkour trend train, it seems.

There are very few people in this world who know how to create hits...multiple hits. Those creative minds should be recognized and remunerated in the video game industry for their contribution as much as other forms of media. From a business perspective, that might be more expensive, but if the reward is better selling games the trade-off is worth it.

But tomorrow, Take-Two is set to hold its regularly-scheduled annual meeting for its shareholders, where they can hear from the executives and vote on internal matters. And although this may look like just another routine affair, it might become clear on Thursday night whether EA's bid is likely to succeed— or whether it will end up dead in the water.

Not so clear on what's going on? Hit the jump for the whole story, including the anatomy of a takeover, possible outcomes, the reasons behind Take-Two's resistance, and more.

Neither Take-Two nor EA were immediately available for comment, so to understand what's going on here, let's recap the story so far. On February 19th, EA CEO John Riccitiello sent a letter to Take-Two board chairman Strauss Zelnick, proposing to acquire the company at a price of $26 per share. Almost immediately, Zelnick rejected the bid, claiming it "substantially undervalued" Take-Two, and said he wouldn't be willing to discuss a merger between the two companies until after the release of Grand Theft Auto IV.

At that time, Riccitiello urged Zelnck to discuss the matter with him privately — promising he'd take the bid public unless Zelnick agreed. Zelnick did not, and EA's acquisition bid went public on February 25th. Again, Zelnick refused to enter discussions with Riccitiello, promising he'd do so on or after April 30th, claiming he didn't want to jeopardize GTA IV's release with any major transactions — and suggesting that the release would add greater value to Take-Two's stock than EA was giving it credit for.

But analyst Michael Pachter is just one of many in his field who believe that investors are already aware of the value of GTA, and that Take-Two's share price reflects that. "I've put in print a dozen times that I think this game will sell 9 million [units] this fiscal year, and 9 million next fiscal year," he explained to Kotaku. "And I say it, and guys like [Janco Partners analyst] Mike Hickey say it... there are some 30 analysts who cover Take-Two. And I don't think anybody has an estimate below 14 million."

In other words, the release of GTA IV wouldn't change a thing for Take-Two — and yet the board continued to hold out. Faced with Zelnick's resistance, the next step for EA was to go hostile. In this type of scenario, the bidding partner bypasses the board to try and buy shares directly from the company's investors. Any share can be sold — and if EA gets more than 50 percent of the existing shares in Take-Two, they gain control of the company. On March 13th, EA formally announced that offer to the investors. And Take-Two, of course, urged its shareholders not to sell, warning that EA's offer just wasn't good enough. They stressed this again on the 26th.

Pachter doesn't see much merit in Take-Two's unhappiness with the offer value. "The point is that last year, and the year before, they didn't have GTA and they lost a buttload of money," he says. "Take Two loves to brag about all their franchises, but the fact is they have 3 Christmases in a row — '06, '07, and '08 — where they lost money. No other video game company lost money in 3 Christmas quarters in a row in history... If you can't make money at Christmas, you are not the 'best video game company in the world.'"

But Take-Two's been sticking to its guns. Kotaku also got input from Lazard Capital Markets analyst Colin Sebastian, who explained, "When analysts tell you that on one hand [EA's offer] undervalues the company, they're looking at just this year's number, which looks very strong just given that GTA is in the year, because that's a very profitable title. It's a very big year for Rockstar and Take-Two. But if you were to normalize over the past few years, they were losing money. There's another method of valuing the company that's looking at it over a period of time — and it doesn't look like an inexpensive acquisition, if you will."

Added Sebastian, "I would agree with Michael; I personally think that... aside from GTA, I think Take-Two has yet to demonstrate a consistent track record for generating profits, although some of the moves they've made... appear [to be] on the right track. But from the point of of EA it's certainly a risk, because Take-Two has been losing money. The problem is, the longer you wait, the less GTA revenue a potential acquirer could get. EA obviously wants as much GTA in their fiscal year as they can get, and as time goes by, they get less."

So time is of the essence. Why then, doesn't EA just offer more money for Take-Two to try and seal this deal quickly? Pachter explains that EA doesn't need to — they've already offered "substantially more" than the company is worth. Moreover, Zelnick won't negotiate with Riccitiello right now. In fact, Zelnick said that, since EA went public with the bid against his wishes, he'll no longer cooperate with EA by allowing them access to any of the company's information that might help generate a different dollar value.

Pachter compares it to demanding more money for your house without letting potential buyers inside to look at it — and he's baffled by the situation. "I don't get why Take-Two management was not willing to privately meet with EA and discuss a possible combination at a price that is in everybody's best interest. Take-Two management... have repeatedly said that $26 is an unfair, inadequate price. Then why aren't they willing to go sit down with EA, explain why $26 is not a fair price and why some number above that is a more fair price, and at least hear EA explain about whether they're willing to go higher or not? If you don't explain to EA why they should pay more... they're not just going to volunteer to pay more... Riccitiello tried for a couple months to be friendly, and Strauss is the one who was hostile."

In fact, Take-Two has tried to explain, in the information it's released to its investors, but the explanation seems to contain a little bit of fuzzy math. When we talked to Pachter, he helped us parse out what it all meant: "First of all, all analyst estimates on Take-Two are before tax . Because Take-Two lost so much money they don't pay taxes — they pay, like, 3 percent. When you don't make profits to offset losses, you don't pay taxes. But Take-Two is using analyst estimates.... to compare [themselves] to Activision, Ubisoft, THQ and EA... and their analyst estimates are all after-tax. If you're EA and you buy Take-Two — you suddenly pay tax on all Take Two's income, because EA doesn't have big losses... So now is it an inadequate offer?"

Moreover, Pachter points out that Take-Two's stock rose after the EA offer went public — and it's only thanks to that that Take-Two might compare, value-wise, to THQ, who is in "turnaround mode," but not to Activision or Ubisoft, who Pachter says are "kicking ass."

So all signs suggest that the excuses Take-Two have made for why they aren't dealing with EA don't really hold water. So could it be that Take-Two management has a completely different reason for rejecting the offer? Not because it's too cheap, and not because of GTA IV, but because the management might have something else to lose?

Not an offer from another buyer; though Take-Two has said it was entertaining other discussions, no one has stepped up. "If Take-Two was waiting for a white knight... we haven't seen evidence of that happening," Sebastian notes.

Take-Two's SEC filings reveal something interesting. On February 14th, the company management effectively tripled the management fee that Strauss Zelnick's ZelnickMedia receives from $62,500 to $208,333 — that's per month. Zelnick's management company is also getting a bumped up annual bonus: from $750,000 to $2,500,000 per year. The real big deal here, though, is the 600,000 shares of common stock that the management also gets as part of the same compensation boost.

Executives often get large stock packages that are supposed to help motivate them to raise the value of the company's stock through their management decisions. But if ZelnickMedia loses control of the company, there's no point in him having such a package. And the filing on the compensation boost makes it plain: In the event of a "change of control" — in other words, if EA's bid succeeds — ZelnickMedia won't get those shares.

So it sure looks like this isn't necessarily about GTA, the value of the stock, or the timing of the offer — except as it inconveniences ZelnickMedia's attempt to make itself a little richer."That's obviously a cynical interpretation of events," says Sebastian. "Not to say it's not true... it's hard to think that it's a pure coincidence."

Kotaku wasn't the only outlet to note the odd, potentially unethical timing of the rejection, either — MarketWatch's Herb Greene is generally credited with exposing the information. Additionally, EA's Jeff Brown disapproved to the LA Times, "If Strauss Zelnick keeps telling people he's a Boy Scout, someone should ask him what merit badge he expects to get for this."

Moreover, Take-Two has taken an extreme measure to try and block the hostile takeover by implementing what's called a "poison pill." The board adopted a measure that says that anybody who buys more than 20 percent of the company's shares after April 7th — in other words, EA — is limited in the number of votes they get in the company. In other words, if EA wins the company, they wouldn't be able to control it.

At the time, Take-Two also moved their annual meeting ahead to April 17th so that it would take place after the April 11th deadline for EA's bid. EA responded by simply revising the offer, extending it until April 18th — and also adding a condition for the offer that would effectively invalidate the poison pill.

We asked Pachter about the poison pill, and he told us that it's a normal thing that happens in hostile takeover situations — but it might not be a major obstacle. "In the history of the U.S., there's never been a poison pill that's actually been implemented," he says. "They're just a pain in the ass obstacle that exists to force EA to sit down and meet with the management of the target company."

Take-Two's investors could vote down the poison pill by deciding that it doesn't apply to this transaction. So right now, the fate of the EA-Take-Two merger is in the investors' hands.

And who are Take-Two's investors? Since its largest investors, Fidelity and Oppenheimer, sold big chunks of their ownership, Pachter doesn't believe that any one person owns more than 5 percent of the company at the moment. Sebastian also believes that interpretation is consistent with the public filings. Instead, Take-Two investors are likely a large group of arbitrageurs: people who buy a stock and then flip it quickly when its value increases. Instead of investors who hold stock for the long-term, these guys make their money through frequent, small gains.

There's a chance that the arbitrageurs may ask EA to raise their offer before they agree to vote down the poison pill — in that way, the pill acts as an inconvenience that could squeeze more money out of EA. But Pachter's almost certain that, if that's the case, then the arbitrageurs have already spoken to EA on their demands — and that EA has probably already agreed to them. Pachter suggests that might be the reason for all the silence on EA's end since the hostile bid was announced: they don't need to say anything. They don't need to brag; they've already won.

Predicts Pachter, "My guess is somebody.... will float a shareholder proposal, a resolution, that the poison pill not apply to this transaction. If that passes — which means more than 50 percent vote — then that tells you the next day, more than 50 percent will tender their shares to EA." And if fewer than 50 percent support a work-around for the poison pill? EA walks.

Take-Two announced today, though, that nobody had submitted any shareholder proposals. And because of the time period that proposals were allowed to be collected, none of the people who have bought Take-Two stock since the bid was announced have a say in the meeting — even though current patterns suggest this could be 50 percent or more of the company's shareholders.

So how might those latecomers — those who might have bought in in anticipation of a sale to EA — get their way, if they can't vote in the meeting? They could convene their own shareholder meeting, explains Pachter, after Take-Two's. As of right now, though, Take-Two's stock is trading just above the almighty $26 number — and Pachter surmises this could mean that the arbitrageurs holding the stock have faith that the EA deal will be accomplished.

Lazard's Sebastian has a more moderate view of what might go down at Thursday's meeting: "I think we'll find out how many shares have been tendered, and as of the last... I think there were 500 shares that have been tendered to EA. So it's almost nil — and probably because people want to know what the alternatives are. If you're Take-Two management, your options are to sell to EA — or go back to where you were, [a share price of] $15-17." According to Sebastian, Take-Two must convince its shareholders it has a plan to raise the stock price over $26. "It'll be up to shareholders to decide," he says.

What about that Asian expansion Take-Two just announced? "It doesn't hurt the valuation," says Sebastian. "A long-term strategic plan for building out [into] Asia is important. But I think it's too transparent... you can't just hire somebody and suddenly your company is worth 20 percent more. That's a little too transparent."

Pachter believes the merger would be in the best interest of both game developers and gamers, resulting in "more games, less crap." Games like Midnight Club, for example, would join a rotation with games like Burnout, meaning more selection and more frequent releases of high-quality titles. And the Rockstar mainstays wouldn't suffer, Pachter suggests. "GTA is not ever going to be different. EA's not going to mess up the formula. And I think, internally at Take-Two, a lot of those people are going to breathe a sigh of relief," Pachter says of the possible merger. "Sid Meier, Ken Levine — those guys are gonna love EA, because EA's gonna pump out more copies of their game."

Either way, we could see a turning point in this long battle as early as Friday morning, following decisions to be made at the Thursday evening meeting. At the very least, by EA's Friday deadline, it will have to revise its bid or let it go. Will it be a victory for EA, or will they walk? Let's see what the investors say.

[The full archive of the public disclosures by Take-Two and EA contained in this article can be found at Take-Two's investor relations site, at Electronic Arts' investor relations site, and at the SEC's public archive of filings on the matter.]

There are some interesting, if dry research results, as OTX profiles "Glutton Gamers"—the type that turns around new software fast enough to make a decent return on their investment when reselling—what games are generally considered "keepers"—sorry Carnival Games—and just how much of that trade-in cash gets funneled back into the industry. Worth looking at if only for the Glutton Gamer graphic. It's XTREME!

Analysis: 49 Million U.S. Gamers Buy Used Games [Gamasutra]

"I really don't know what the spend will be, but it could be 10 - 12% of projected sales. If we assume a retail price of $100, that's $10 million in marketing for each 1 million units sold. If they go mainstream (have Oprah demo the device), I could see them selling 3 - 4 million, maybe more. That suggests the potential for $30 - 40 million in marketing.]

Update: Pachter informed us that the New York Post writer never spoke to him and misquoted the article's original Game Daily source. Updated text accordingly.

Report: Nintendo Planning 'Biggest Ever' Marketing for Wii Fit Launch [GameDaily]

Games Market in China Grew 60% to $1.66 Billion in 2007, Expected to Exceed $3 Billion in 2010, According to Pearl Research

SAN FRANCISCO—(BUSINESS WIRE)—Pearl Research forecasts the online games market in China will exceed $3 billion in 2010. The market grew more than 60% to reach $1.66 billion in 2007. These findings are contained in Pearl Research's exclusive 130-page "Games Market in China" study.

Allison Luong, Managing Director of Pearl Research said, "The year 2007 exceeded expectations with the market growing more than 60%, driven by compelling and diverse content, free-to-play games, and rising demand for leisure and technology products. Chinese-themed and advanced casual games are expected to drive revenues in 2008 and beyond."

"A key trend to track in 2008 is rising average-revenue-per-user (ARPU). Certain online games are reaching $7 to $12 a month in average-revenue-per-user, significantly higher than past averages of $5 or less per month. I believe there is still room for average-revenue-per-user to grow, as game operators enhance monetization efforts from free-to-play games," said Allison Luong.

Pearl Research's key findings:

China's most popular online game, Netease's "Fantasy Westward Journey" has 1.66 million peak concurrent users, followed by Giant's "Zhengtu Online" with 1.52 million peak concurrent users. Successful MMORPGs can be highly profitable. Game operator Giant Interactive generated the majority of its $209 million revenues from one title, "Zhengtu Online."

Game operators in China experienced strong revenue growth in 2007. The biggest gainers were game operators Shanda (up 49% to $338 million), Giant (up 274% to $209 million), The9 (up 30% to $175 million) and Perfect World (up 593% to $95 million). Coinciding with this revenue growth was a wave of initial public offerings (IPOs) by game operators Giant, Perfect World, NetDragon and KingSoft.

The study also contains highlights from Pearl Research's Phoenix Generation research initiative, consisting of more than 200 one-on-one, personalized interviews conducted with Chinese youth. One key finding is that games are a social phenomenon, with gamers often playing casual games to connect with friends and flirt with others. Gamers cite cheating and account thefts as a top reason for abandoning a game and seek out game operators with a reliable reputation.

Pearl Research's "Games Market in China" study provides an in-depth analysis of the Chinese games market. The report contains 2006 to 2011 forecasts; inhibitors and drivers to growth; deep marketplace analysis; profiles of key market players; and strategic conclusions. Please call (+1) 415-738-7660 or email research (at) pearlresearch.com to inquire about this report.

Analysts, though? They think that EA's full of BS. Janco Partners' Mike Hickey told GameDaily.biz that "My belief is Rockstar would be perfectly happy if EA never put a bid in at all." Hickey called Riccitiello's perception as Rockstar savior "bullshit" not to mention disrespectful to Take-Two management and its developers.

Other analysts had their say, including Michael Pachter, who noted that Riccitiello's "white knight" analogy was "perhaps a misplaced attempt to sound clever." Yep. Fightin' words.

Analyst: EA's Riccitiello 'Disrespectful' Towards Rockstar, Take-Two [GameDaily.biz]