In an SEC filing, Icahn declared his ownership of more than nine million shares, worth $70.6 million, and included his opinion that Take-Two's shares are "undervalued," which means he wants to talk to the company's leadership about turning that around, and 11 percent is clout enough to have that conversation.

Michael Pachter, the Wedbush analyst frequently quoted by the gaming press, told Gamasutra his firm thinks Icahn "intends to force the company to consider a sale." Pachter also pointed out that Icahn and Take-Two CEO Strauss Zelnick are on the Blockbuster board of directors.

From the filing, it appears Icahn's stake in Take-Two appeared to jump significantly in the past two weeks, when the publisher first announced it would fall short of its own guidance on fiscal earnings.
Activist Investor Icahn Boosts Take-Two Stake [Gamasutra]

"In any non-GTA year, should we just assume you're not going to make money?" an investment analyst asked Take-Two CEO Ben Feder and chairman Strauss Zelnick during an investor call today.

"We're certainly not saying we can't be profitable in a non-GTA year," Zelnick responded. "We don't feel that GTA ought to be an annualized franchise."

Take-Two published Grand Theft Auto IV last year, following that with two downloadable expansions, The Lost and Damned and The Ballad of Gay Tony in 2009. It also shipped Grand Theft Auto: Chinatown Wars for the DS and PSP this year and a collection of the two downloadable episodes as Grand Theft Auto: Episodes from Liberty City. Just don't count on a new GTA next fiscal year.

Zelnick argued that there's "a balance between how long it takes to develop such an incredible title and meet consumer expectations and how long you need to make sure that an appetite has been both satisfied and whetted for the next franchise."

"That's something I think the company has historically done rather well and I think the high profitability and resiliency of the franchise reflects that," he added. "I wouldn't see that changing."

Take-Two chairman Strauss Zelnick said during today's quarterly earnings update that the role-playing shooter, which had a "successful launch," shows signs of "becoming an important long-term franchise" for the company. That's not official confirmation of a Borderlands 2, but it's about as close as we're going to get.

Given Borderlands development delays and Take-Two's increasing inability to ship many of its "AAA" caliber titles on time, just don't expect that Borderlands 2 to show up any time soon.

Take-Two chairman Strauss Zelnick said during an earnings call today that Mafia II, Red Dead Redemption, BioShock 2 and Max Payne 3 would all be shipping sometime between February and June of 2010. That's a pretty packed schedule, but it's not like Take-Two has much choice.

Some of those games were pushed back from originally planned 2009 releases, joining the ever crowded Q1 and Q2 of next year. Take-Two gave a looser release window for some of those games back in July. At the time, Take-Two execs blamed a softer economy and development issues.

But Zelnick sounded confident that all four heavy hitters would ship in that five month window.

Rockstar Games, developer of two of the slipped titles that now have more firm sounding release plans, has had a little trouble making its dates this generation, with similar slips on Midnight Club Los Angeles and Grand Theft Auto IV.

Keep in mind that the story is written by someone with a personal and financial interest in the company. With that in mind the piece is worth reading not only because it's highly entertaining, but also because it does a great job of placing the last 18 months of Take-Two's business dealings in context.

If you're keeping score, in a two year period, Mr Zelnick managed to, on three occasions, make vital statements that were within a matter of weeks proven to be either fabricated or just incredibly incompetent (or worse). Mr. Zelnick managed to resist and reject a buyout offer that was triple the company's current share price while claiming other interested parties who never emerged. And Mr. Zelnick, meanwhile, tripled his management company's compensation for these efforts because, after all, he does not engage in regrets and does not "take responsibility for the market."

These statements and others strongly suggest that investors should proceed with extreme caution with any investment that involves Strauss Zelnick. His performance so far as an executive manager of a publicly traded company is one of the worst I have ever seen in my professional investment experience.

Granted, not many of you will be Take-Two shareholders, but still, that's not the kind of picture you like to see painted about the guy (and board) responsible for publishing Grand Theft Auto and BioShock.

No Regrets, No Responsibility: Strauss Zelnick, Take Two Interactive's Chairman [Market Rap, via GamePolitics]

It happened partly because Take-Two spent a ton of money to keep EA's hungry wolves at bay. How much money?

According to a Securities and Exchange Comission filing from last week, it was in the region of $11.1 million dollars, which was spent on things like a "strategic review process" and...getting boss Strauss Zelnick on the cover of Men's Fitness.

Would you try and takeover a company whose boss had body that ripped? No, no you would not.

Take-Two reveals EA bid cost, earnings breakdown [GameSpot]

Following on from news that the company's losses increased to $15 million, shares in Take-Two took a nosedive, plunging a whopping 21%. They seemed to have closed slightly higher since the original Reuters report, but still, it's clear the market does not approve.

Take-Two results disappoint, shares fall 21 percent [Reuters]

He tells Reuters that his company had a Black Friday that was "better than expectations" but didn't provide dirt on Grand Theft Auto IV sales. Like Microsoft's Shane Kim, Zelnick seems pleased with recent sales, but is concerned about post-holiday "momentum."

If Strauss is worried, he sure doesn't show it. Just look at that cool, comfortable corporate lean! It exudes cautious optimism!

Black Friday sales better than expected: Take Two [Reuters - Image Credit]

"Looking ahead, the biggest opportunity that we see for the industry as well as for us is downloadable content," he said. "With Grand Theft Auto IV we will be offering downloadable episodes that gamers can buy on Xbox Live after they've purchased the original title. We've also that next week we will be releasing add on content worldwide for Bioshock. And these are our first offerings for downloadable content. We're excited about the creative opportunity. We are very excited about the profit potential and we'll see how these things roll out. I think the entire industry is focused in this area."

Zelnick went on to talk about the importance of microtransactions and how multiplayer gaming could perhaps be the solution to the growing used game market. In other words, make your online mulitplayer good enough and people won't want to sell the game back.

And then he had to ruin it all by bringing up subscriptions and not, it seems, just for the typical massively multiplayer online PC game

"The holy grail is taking a business, already a very large and successful business that's focused on packaged goods that you sell once and then are occasionally resold by others with new benefit to us, and turning that into a subscription business or a semi subscription business where we have an ongoing relationship with consumers, giving them products that they want," he said. "Who's better positioned to do that than the company that has the top franchises."

But what games could you be thinking of doing that to Strauss?

"It's our view that you won't be able to apply a subscription model to mid-tier titles," he said. "The triple-a titles that people really want to have that are really must have are in the best position for this business model."

Please tell me he's not thinking of a subscription-based Grand Theft Auto or BioShock. Worse still, this makes two of them.

"Some of your are interested in our release schedule," he said. "To update that, our PC title will be released early next month. Downloadable content is a big undertaking. It's important that it be really special, really something unexpected by consumers. We're setting incredibly high standards for it. We have it planned for the end of the first quarter. It's close to be completed. That said, it may move into the second quarter depending on its completion date."

"Chinatown Wars we've decided to move out of the first quarter in order to fill out a better launch and marketing window. The title will ship in the first half of our fiscal year and we will provide more information on release dates by the time we report our earnings next month."

The comments came following a presentation by Zelnick that both highlighted the company's successes and stressed the concerns he and other developers have about the seemingly worsening economy.

"On the horizon we see a number of strategic growth opportunities including new channels of distribution, new markets, new products and new business models," he told the gathering. "We have a very strong publishing platform and an unrivaled development team."

But minutes later he described the current retail conditions as "extraordinarily challenging" and said that there has been a "softening of retail" that has had a negative impact on the industry.

So Take-Two's strategy is to "release a limited number of top tier titles" in the hope it will cushion the publisher in the short run.

Thanks to MTV Multiplayer for the heads-up.

The issue also features "the future of fitness" brought to you by video games. Fitness has changed.

The magazine's cover promises to clue Men's Fitness readers into Zelnick's fitness regiment, which helps Strauss stay "in the best shape of his life." We'll tell you straight up: the man bench presses overstock Big Daddy statues between protein shakes. True story!

Take-Two’s Strauss Zelnick, First Game Exec To Land A Fitness Mag Cover [Das Gamer]

In periods of high growth, like where we are now, B titles and C titles can do OK. But as soon as you get to the point where the platform penetration has reached its asymptote, then quality reins supreme. We think that if you focus on quality all along, regardless of where the market peak is, you will do better.

Explaining, perhaps, why T2's Wii catalogue isn't quite as robust as some other publisher's.

E3 perspective: Q&A with Chairman Strauss Zelnick on the future of Take-Two Interactive [VentureBeat]

When we go head-to-head with 'Brand X' we out-rate them significantly...We outsell them when we go head-to-head. It's sort of an unheralded achievement. This is a tough business.

On one hand, he's right! 2K's basketball and hockey games are normally top-shelf, and they've got baseball to themselves. But the "head-to-head" bit...yeah, it's dancing around that elephant in the room. 2K don't have an NFL game in the US. They don't have a football game in Europe/Asia. That's like saying my 92 Corolla can take on a Ferrari head-to-head, so long as we're...both sticking to the speed limit. And the speed limit's 30.

2K Sports unheralded against EA Sports, says Zelnick [GI.biz]

Zelnick's answer? "Possibly," but Zelnick said there's nothing currently in Take-Two's schedule that fits that bill. For his part, Zelnick is waiting to see how much staying power the trend has, and whether to define it as a "music genre" or a "rhythm genre."

Zelnick said such considerations are "terribly important when you invest in AAA properties that you expect people to play for over 20 hours."

Zelnick has good reason to demonstrate his restraint to his investors, of course - right now his mandate is to prove that they're better off sticking with his guiding hand than with EA's.

He answers CNBC's Michelle Caruso Cabrera's question about any post release GTA IV glitches very confidently—and incorrectly—saying "No, you know, no, none whatsoever. I'd say the only issue is that someone came up to me yesterday in a restaurant and said my thumbs were hurting from the weekend!"

Tee hee! Oh, Strauss! Are you the chairman of fun, too? At least I'm not the only one suffering from stabbing thumb pain born of constant sprinting.

We're not sure if Strauss is being shielded from technical issues or doesn't want the CNBC viewership to know about GTA IV's mysterious freezing problem, but with multi-thousand post forum threads continuing without an official working solution it's hard to swallow this from senior management. GTA IV's performance problems may be limited to a small minority of its owners, but to claim that it's free totally free from technical issues makes you either dishonest or woefully uninformed.

Take Two's Grand Theft Auto IV [CNBC via MaxConsole]

In a call to investors and analysts, Zelnick and crew chalked up the better than planned for quarter to sales of stuff like Carnival Games and Manhunt 2, plus portions of Take-Two's back catalog. I'm not much of a gambler, but I'd be willing to wager that next quarter, they'll do much, much better.

Take-Two Interactive Software, Inc. Reports First Quarter Fiscal 2008 Financial Results [Take-Two]

The timing of this move is more than a little suspect, and has understandably caught the attention of business analysts and corporate governance experts alike. While pay increases and stock deals for executives are common, negotiating a deal that will see you make big money if your company is bought while an offer to buy the company is on the table raises some ethical questions.

In his defence, Zelnick argues that since taking over the company, he's turned their fortunes around, as evidenced by EA's takeover interest. Also, it's worth remembering the pay deal's not final: while ZelnickMedia and Take-Two's board have approved it, shareholders need to agree to it as well before it's finalised.

Either way, the matter should be settled after April 30, the date Zelnick said he'd reopen discussions with EA: if he nets Take-Two shareholders an increase over the $26 per share EA originally offered, his new share deal will be just rewards. But if he signs off on the deal for what EA were originally offering before his shiny new pay package was drawn up...well, he might find himself in trouble.
Take-Two Raises Eyebrows [Wall Street Journal]
Zelnick's Take-Two compensation: a fair and balanced appraisal [Variety]

Hickey also points to "opportunities" in the GameDaily BIZ report, such as sequels to Red Dead Revolver, Max Payne and a theoretical Grand Theft Auto MMO as nice-to-haves. Maybe I'll just buy them and expense it.

Take-Two Acquisition Looming, Predicts Analyst [GameDaily.biz]

I'm much more interested in growing the business than in selling it, to be clear. I would say for the next five to seven years this is a terrific time to be in the video game business.

Asked whether one console in particular was the root of the problem, Zelnick diplomatically responded that "I know there have been rumors in the marketplace about frame rate and some other issues. We don't think it's helpful or beneficial to go into exact details of what the technological issues are. We're pushing the envelope on both the platforms." Crap. Now I don't know which torch to light!

Zelnick explained that "the final say" to delay GTA IV was with him, but that "This wasn't a decision we took lightly. This wasn't a decision [Rockstar] took lightly." Having reviewed a build just a day prior to the announcement Take-Two felt that there was no way it could meet the game's October 16th release date.

On the subject of the Xbox 360 exclusive episodic content—the first episode of which was due in March—Zelnick responded that it wouldn't affect the deal, telling analysts that "We're not gonna send money back to Microsoft. That's not part of the deal."

No time frame was provided during the call for Rockstar Games' other release, Manhunt 2, with executives claiming they'd erred on the side of caution and won't provide an updated release date until they have an M-rating.

Zelnick and Feder also noted that they hate your guts and don't want you to have any fun. Yes, you.