The Insider translates that as Kotick saying "Housers, come work for us."

Kotick says that Activision knows how to "appropriately incentivize" development studios, a thinly veiled "$$$$$ comin' your way!", but wouldn't go on record saying they'll take part in the speculated upcoming bidding war for the Grand Theft Auto talent.

While some may bemoan companies like Activision swallowing up dev teams, at least we know we'll get a Grand Theft Auto-a-like out of the publisher every year, if they properly "incentivize" Rockstar talent. Maybe six! Maybe Grand Theft Auto: Aerosmith, if we're really lucky.

Activision CEO Kotick: We Can’t Say That We'd Like To Hire Take-Two's "Grand Theft Auto" Guys (But Come Work For Us, Guys!) [Silicon Alley Insider]

Come February 2009, Pachter writes, Wedbush Morgan analysts "remain convinced that Take-Two faces two equally unpalatable options: either lose the Housers to another bidder, or pay more to retain them."

Pachter believes that, if Take-Two fails to keep the Housers on board, future GTA games could suffer, as the two are "instrumental in determining the final shape of the ultimate games released." We suppose the question Take-Two execs are asking themselves is "Will the game buying public notice the difference?"

Bidding War Over GTA Talent Looming? [Edge Online]

Meanwhile Take-Two is taking a huge beating as everyone and their mother tries desperately to sell the shares the figured EA was going to to buy. At $21.89 as of the previous close, shares are as of right now trading for $16.43, or nearly 25% lower than they were before talks were officially halted.

I'd say that Take-Two's faithful stockholders are getting shafted here, but I doubt there are very many faithful stockholders left out there at this point.

Take-Two Falls After Electronic Arts Ends Merger Bid [Bloomberg]

According to the press release issued by the interested buyer, following a "management presentation and review of other due diligence materials provided by Take-Two," EA says it has opted not to make a new proposal to acquire Take-Two and has ended talks. It was rumored to have done so last week.

Take-Two issued comment on the news immediately following EA's announcement, writing “We remain focused on creating value for our stockholders and our consumers. This has been our goal since EA launched its conditional and unsolicited bid six months ago, a bid which was repeatedly rejected by our stockholders."

Strauss Zelnick, Chairman of the Board of Take-Two is quoted as saying that the publisher is "actively engaged in discussions with other parties in the context of our formal process to consider strategic alternatives."

Both parties' statements are after the jump.

Electronic Arts Terminates Discussions with Take-Two

REDWOOD CITY, Calif.—(BUSINESS WIRE)—Electronic Arts Inc. (“EA”) (NASDAQ:ERTS) today announced that while EA continues to have a high regard for Take-Two’s creative teams and products, after careful consideration, including a management presentation and review of other due diligence materials provided by Take-Two Interactive Software Inc. (“Take-Two”) (NASDAQ:TTWO), EA has decided not to make a proposal to acquire Take-Two and has terminated discussions with Take-Two.

John Riccitiello, Chief Executive Officer of EA, said: “EA is tracking toward a record breaking year. We’re launching 15 new games including award-winners like SPORE, Dead Space and Mirror’s Edge, great new titles from the Sims, new family titles with Hasbro, and the highest quality slate of EA SPORTS titles on this generation of consoles. We’re also expanding beyond our core business with a series of direct-to-consumer launches including Warhammer Online.”

About Electronic Arts

Electronic Arts Inc. (EA), headquartered in Redwood City, California, is the world's leading interactive entertainment software company.

Founded in 1982, the Company develops, publishes, and distributes interactive software worldwide for video game systems, personal computers, cellular handsets and the Internet. Electronic Arts markets its products under four brand names: EA SPORTS(TM), EA(TM), EA SPORTS Freestyle(TM) and POGO(TM). In fiscal 2008, EA posted GAAP net revenue of $3.67 billion and had 27 titles that sold more than one million copies. EA's homepage and online game site is www.ea.com. More information about EA's products and full text of press releases can be found on the Internet at http://info.ea.com.

Take-Two Interactive Software, Inc. Comments on EA Announcement

NEW YORK—(BUSINESS WIRE)—Take-Two Interactive Software, Inc. (NASDAQ:TTWO) today responded to Electronic Arts Inc.’s (NASDAQ:ERTS) announcement that it does not intend to pursue an acquisition of Take-Two at this time.

Strauss Zelnick, Chairman of the Board of Take-Two, commented, “We remain focused on creating value for our stockholders and our consumers. This has been our goal since EA launched its conditional and unsolicited bid six months ago, a bid which was repeatedly rejected by our stockholders. As part of that commitment, we remain actively engaged in discussions with other parties in the context of our formal process to consider strategic alternatives. We’re especially proud of the success we’ve enjoyed over the past eighteen months and we remain confident in our ability to generate value for stockholders.”

“Take-Two’s business has continued to strengthen since the time EA first made its offer. We have delivered terrific products to our consumers and we’ve been rewarded with very strong financial performance. We have an exciting future ahead of us, powered by our profitability, a significant cash position, the absence of debt, an undrawn credit facility and a terrific lineup of games. We are confident in the unique value of our business given our strong position in what is a growing and dynamic industry,” said Ben Feder, Chief Executive Officer of Take-Two.

About Take-Two Interactive Software

Headquartered in New York City, Take-Two Interactive Software, Inc. is a global developer, marketer, distributor and publisher of interactive entertainment software games for the PC, PLAYSTATION®3 and PlayStation®2 computer entertainment systems, PSP® (PlayStation®Portable) system, Xbox 360® and Xbox® video game and entertainment systems from Microsoft, Wii™, Nintendo GameCube™, Nintendo DS™ and Game Boy® Advance. The Company publishes and develops products through its wholly owned labels Rockstar Games, 2K Games, 2K Sports and 2K Play, and distributes software, hardware and accessories in North America through its Jack of All Games subsidiary. Take-Two's common stock is publicly traded on NASDAQ under the symbol TTWO. For more corporate and product information please visit our website at www.take2games.com. All trademarks and copyrights contained herein are the property of their respective holders.

All trademarks and copyrights contained herein are the property of their respective holders.

Take-Two CEO Ben Feder was asked that very question during today's quarterly earnings conference call to which he responded that Chinatown Wars was an important step in its relationship with Nintendo.

"Without commenting specifically on whether GTA is coming to the Wii or not, I will say that Nintendo and Take-Two work very very well together," Feder explained. "Rockstar and Nintendo work very well together. We intend to continue to grow that relationship.”

Feder also noted that the company has invested "an enormous amount of time and effort working with Nintendo" and while he fell short of announcing a major product during an investor call, it certainly sounds like the door is open.

With over two million Carnival Games shipped on Nintendo platforms, it just makes sense.

While Rockstar has traditionally stuck with PlayStation, Xbox and PC platforms, it has brought Smugglers Run to the Gamecube and Grand Theft Auto to the Game Boy Advance. We'd say think that, given the hooker beating simulating properties of the Wii nunchuk, it's a no-brainer.

Feder wouldn't confirm that the title would hit before the holidays, despite requests from callers to clarify.

If rumors are right, Chinatown Wars will hit in the same three month window — November 1 to January 31 — as GTA IV's Xbox 360 exclusive downloadable episodes. If that GTA three-way does happen, it could make for a very happy group of shareholders. And a lot of virtual bystander corpses.

With the PC release and the localized Japanese version still to come, it's looking more and more likely that GTA IV can hit that 15 million mark in 2008, as Hudson Square Research analyst Daniel Ernst predicted.

A cheaper Xbox 360 and forthcoming episodic content sure won't hurt GTA IV's chances this holiday season.

It's time for the Take-Two Interactive E3 2008 press conference! What mysteries lie beyond the jump? Will they talk about GTA DS? Will they concede and hand over the company to EA right then and there? Will they...I dunno...talk about an upcoming movie for an hour?

God I hope not.

Today, Ernst upped his estimate to 15 million on word from Take-Two that the publisher had already sold through 8.5 million copies of GTA IV, with 11 million shipped to retailers. Ernst noted that "We expect GTA IV sales to re-accelerate in the latter part of year in conjunction with the seasonal holiday period."

As for Final Fantasy XIII shipping 7 million in 2008?

Ernst said that "Initially we had hoped it would make it in for the end of the year" but that FFXIII "definitely appears off the table" according to Square Enix guidance. Frankly, we'll be thrilled (and maybe even a bit flabbergasted) if it hits North America before 2010.

The Hudson Square Research analyst updated us on a handful of other key figures, noting that Gran Turismo 5 is also expected to be a "no show" this year and that next week's release of Metal Gear Solid 4 "won't be enough to materially accelerate the PS3 this year."

"For the PS3, that’s definitely a set back," Ernst told us about titles that the firm expects to hit next year, "And I think is why their 10M unit guidance for the [fiscal year] was lower than most had expected."

Why, then, is the bid lower? Well, it's not because EA docked it. Last night, about an hour after Take-Two's annual meeting, the results of the vote that took place were announced, and as it turns out, Take-Two shareholders approved the extra cash and the 780,000 shares that the management team was seeking. The approval of that compensation package dilutes EA's offer - more stock equals less value per share - but many current shareholders were not allowed to vote last night. Only those who bought Take-Two stock prior to February 19th got a say - even if they don't own any stock anymore. In other words, Take-Two itself reduced the per-share value of EA's bid, even though the aggregate amount of the offer hasn't changed.

We'd heard some rumors out of Asia that this deal was already sealed behind the scenes, but when we spoke to Owen Mahoney, EA's senior VP of Corporate Development, he stated, "It's not in the bag." We also heard from Take-Two this morning that only 8.3 percent of total shares had been sold to EA.

Where does EA stand, then? Mahoney tells us the clock is ticking for this deal. Hit the jump for our full interview, plus comments from Strauss Zelnick on his side of things.

Yesterday it was announced that the Federal Trade Commission wanted to further investigate the deal to evaluate potential antitrust issues. Like Take-Two, Mahoney says EA is cooperating fully, and extended the deadline of its bid in order to allow plenty of time.

However, said Mahoney, "The thing for us is that further delays... could affect the value of our offer."

EA continues to believe that the longer this fight drags on, the less the deal will be worth. We asked Mahoney directly whether he'd increase the offer — while he declined to speculate on possible future decisions, he stressed, "I'd say that our offer... is very full and fair. We think it's a great opportunity for [Take-Two's] shareholders, for the employees, and for our shareholders. It was a huge premium on the unaffected price of the company."

After all, EA's got investors to answer to also, and must be careful about volunteering more money without good negotiation taking place first. "Our board expects us to be very price-disciplined," said Mahoney.

Analysts have told Kotaku that most investors already believe in the potential of GTA IV, and that their anticipation for a huge first week of sales is already reflected in the current share price, and EA agrees. However, what if the unexpected occurs, and Take-Two's stock does rise after the release of GTA IV? Said Mahoney, "I'd say that's a short-term event, if that does happen. All I can speak to is what we think is appropriate for our sholders. $26 is a very full and fair price and... we intend to be price-disciplined because [our] board has made that clear."

Moreover, EA says this offer isn't predicated on the value of one launch, or even one franchise. Said Mahoney, "We're talking about people... all of the thousands of developers all over the world who are creating great franchises, several wonderful studios and.. they've got some fantastic IP. But [GTA is] only one in a whole, broad range of wonderful assets."

Speaking of wonderful assets, we asked EA directly to respond to some of the gaming community's fears that EA might repeat some past mistakes and quash this studio talent, in the event that the takeover is successful.

"That was ten years ago," said Corporate Communications VP Jeff Brown. "Granted, since then, we've done Pandemic, BioWare, we've done DICE, Criterion and Mythic and I would encourage you to call those guys. They're pretty happy. If you want to go back to Westwood back in nineteen-ninety-frickin'-seven, then yeah. We blew it. The point is, we've done Maxis and we've just celebrated 100 million units sold of The Sims. Ask those guys if they're happy working for EA."

The bottom line, said both executives, is that it's the talent that's vital to them in any deal, and that ultimately when they invest in a studio, they invest more than just money. Added Mahoney, "When we're looking at companies, one of the things that really factors heavily into our thinking is the quality of management and the teams creating IP. We have to believe... they can run some larger portfolio than they're currently running."

As an example of the company's broader approach to acqusitions, he mentioned Patrick Söderlund, CEO of Battlefield series developer Digital Illusions before that studio was acquired by EA. "Since coming to EA, he's taken on a larger and larger portfolio, and we've invested many millions in the Battlefield franchise. We believe that... people who are the creative leaders and who are leaders of those studios... what we're looking for is people who are going to be doing larger things than they're currently doing. We feel strongly about those people, we felt strongly about them when we approached them to acquire them and our objective is to invest behind them and make them bigger than before we bought them."

So what about the Take-Two deal? We asked EA what they were ready to do next. Though Mahoney could not comment on future plans, he stressed, "One of the things we're here for is we feel these are some of the best studios in the world."

So will the company keep going for Take-Two and try to get this deal done? Yes, says Mahoney — but with a caveat. "Any delay that we get, whether that's from regulatory or management [issues], is going to affect the value in the certainty of our offer."

This morning, just after Electronic Arts extended its deadline for its bid to acquire Take-Two, Take-Two confirmed just how many of its shareholders had sold to EA. 6,432,787 shares total were tendered, which may sound like a big number, but it's only 8.3 percent of the total of outstanding shares.

Said Board chairman Strauss Zelnick in a public statement, "The minuscule number of shares tendered, as well as the strong vote in favor of the proposals presented at our annual meeting, offer indisputable evidence that our stockholders regard our efforts to enhance Take-Two's stockholder value as superior to the EA offer."

Zelnick reiterated the same statements he made during the annual meeting, that EA's proposal undervalues Take-Two, adding, "It undervalued the company at $26 per share, and it certainly undervalues Take-Two at $25.74." He again urged shareholders not to tender shares to EA, and promised the company is exploring all of its options to maximize shareholder value, including either remaining independent or considering purchase by another third-party.

Finally, he stressed once more that he would enter discussions with interested parties — including EA — after April 30th and the launch of GTA IV. Concluded Zelnick, "The Board continues to believe that we will be best positioned, from the perspective of both value and timing, to move forward at that time. We are confident in the significant growth potential of Take-Two and in the unique value of our business given our strong position in this dynamic industry."

Also, as a result of Take-Two issuing additional stock following the approval of the company's incentive stock plan, the price per share EA is offering has dropped to $25.74 from $26.

EA reveals that as of 5PM yesterday, 6,423,787 shares of Take-Two common stock had been tendered in and not withdrawn from the offer.

For more on how all this works, be sure to check out Leigh's feature on the takeover.

EA Extends Take-Two Tender Offer Expiration Date to May 16, 2008

Offer Price is $25.74 per Share, Reflecting Additional Shares to be Issued by Take-Two

REDWOOD CITY, Calif.—(BUSINESS WIRE)—Electronic Arts Inc. ("EA") (NASDAQ:ERTS) today announced that it has extended its tender offer for all of the currently outstanding shares of common stock (including the associated preferred stock purchase rights) of Take-Two Interactive Software, Inc. ("Take-Two") (NASDAQ:TTWO) to 11:59 p.m., EDT on May 16, 2008. The tender offer was previously set to expire at 11:59 p.m., EDT, on April 18, 2008. EA also amended its offer to reflect a price of $25.74 per share. The price takes into consideration additional shares to be issued to Zelnick Media following stockholder approval of the amendment to Take-Two's incentive stock plan at its 2008 annual stockholders meeting on April 17.

Valued at approximately $2 billion in cash, EA's aggregate consideration for Take-Two shares remains unchanged.

EA continues to believe that the offer price is full and fair, and that a transaction between Take-Two and EA is the most compelling combination financially, strategically and operationally for all parties.

As of 5:00 p.m., EDT, on April 17, 2008, 6,432,787 shares of Take-Two had been tendered in and not withdrawn from the tender offer.

On the table? In addition to a reinstatement of the board, that controversial compensation package to executives, through which Strauss Zelnick's ZelnickMedia stood to see their monthly pay go up from $62,500 to $208,333. The compensation package also includes a bumped up annual bonus, from $750,000 to $2,500,000 per year, and 600,000 shares of common stock that the management also gets as part of the same compensation boost. Only investors who bought shares before February 19th were able to submit ballots on these issues.

Even chairman Strauss Zelnick acknowledged, though, that what most of the stockholders really wanted to hear about was EA. And he held little back in a spirited attempt to convince shareholders that, at least for the moment, they were better off not selling.

Hit the jump for Kotaku's full coverage of what went down in the meeting.

Take -Two opened with a video presentation that chairman Strauss Zelnick said would demonstrate the breadth and quality of Take Two's products, the depth of its portfolio and the strength of its staff. Given that Take-Two aims to convince its shareholders it can maintain a share price over the $26 they've been offered by EA, it's not surprising that he'd open with a focus on the positives. We couldn't see exactly what the presentation contained, listening in on an audio-only feed — all we could hear was some amped-up guitar music, the kind you'd expect to hear overlaying a montage.

Following the video, CEO Ben Feder continued on the upbeat note. "We've made significant progress over the past year on all fronts," he began, praising the progress of the company's turnaround initiatives announced this time last year. Federer said the reorganization in place, including a $25 million cost reduction initiative, is going well, and reminded attendees that the company's now backed with a credit facility to ensure stability.

"We're very pleased that we've broadened our product lineup across all genres, platforms and demographics," Feder said, and expressed confidence at the company's "robust" lineup for the coming years. On GTA's upcoming launch, Feder confirmed the game is complete and in production. "GTA... is our most profitable and biggest-selling franchise. Retail preorders for GTA IV are ahead of our initial expectations, which suggests that the launch of GTA could be defining for our company and for the entertainment industry."

Federer also promised releases beyond GTA held strong potential. He mentioned the upcoming Midnight Club, which as a franchise has sold 12 million units to date, Sid Meier's Civilizations Revolution, the 8 million-selling franchise's console debut, and the follow-up to BioShock slated to release in 2009.

In addition to praising the performance of Carnival Games, Feder called Take-Two's stable of sports titles one of its highest achievements, and expects, based on all these strengths, for Take-Two to turn a profit this year, rounding out the positive tone by expressing confidence in the Asian expansion initiative announced earlier this week.

Zelnick reclaimed the floor, reiterating what he's been saying all along regarding EA's offer: "The Board and management of Take-Two strongly believe.. that EA's offer is still at the wrong place, and still at the wrong time."

He cited "one of the strongest porfolios of intellectual properties in the business," Take-Two's suite of 17 development houses including Rockstar, 2k, 2k Sports and 2k Play, and a staff of 1400 developers altogether, and said Take-Two has 30 titles with sales of 1 million units or better — and, claimed the highest-rated titles of all third-party publishers including EA.

He called EA's bid "highly opportunistic," stating, "We believe EA's decision to pursue a hostile process instead of a cooperative one is strong evidence they're trying to lock in value at the expense of [stockholders]."

Added Zelnick, "The offer also fails to take note of... positive results we're seeing from turnaround initiatives that are well underway. EA's timing was specifically designed to capture the benefit of those initiatives before they became apparent and reflected in our stock price. We've become a much more efficient company. We believe we're a much better-managed company. We're a rational company; we make rational decisions. We have a lot of hard-working, dedicated, talented people."

Specifically, he focused on 2K Sports, saying that head-to-head, 2k beats EA on every metric for sports titles. "EA's offer doesn't remotely compensate stockholders for the value of the sports business to EA," Zelnick stressed.

Zelnick's voice took on a tone of urgency, and the audio picked up what sounded like him striking the table to punctuate his speech. "Take-Two is worth more than $26 per share — and I'm being moderate because I have lawyers in here. The board believes it's worth more than $26 a share. I urge stockholders not to tender shares at this price."

However, he made it clear the door is open to negotiations in the future: "That said, I want to emphasize — this is crucial. The board of Take-Two, the management of Take-Two is one hundred percent, absolutely committed to doing the right thing by stockholders and to create value at this company. The results... are only going to get better."

He said the board would consider all its options — including remaining independent — but that the company is prepared to begin formal discussions with interested parties on April 30th. He again said that Take-Two has received "numerous indications of interest from third parties," and that they continue to receive inquiries — though when asked, Zelnick would not disclose whether he'd entered into any kind of confidentiality agreement that would protect such discussions.

Finally, Zelnick noted that both Take-Two and EA are cooperating with the FTC on its investigation of possible antitrust violations surrounding the proposed transactions, and he refused to speculate on what areas in specific the FTC might be scrutinizing the most closely.

Yesterday, we discussed the strategies Take-Two undertook to try and stall or thwart EA's bid. They've been refusing to talk with EA or explore offers, and they're doing their best to entrench the current Board of Directors with that compensation boost that features stock that takes three years to fully vest. They also implemented that stockholder's rights plan — the so-called "poison pill." As it turns out, someone who is allegedly one of Take-Two's stockholders is none too happy with these tactics — and he's ticked enough that he's taking the company to court.

Take-Two disclosed this morning in a filing to the SEC that the alleged stockholder, one Michael Maulano, filed a class action complaint on April 11th against Take-Two and it's eight-member directorial board in the Supreme Court of the State of New York, where the company's headquartered. Maulano calls Take-Two's tactics a breach of fiduciary duty, and the suit also alleges that Take-Two's responses to EA's offer contained "misleading and incomplete" information.

Maulano wants "declaratory relief, preliminary and permanent injunctive relief, damages, and reasonable attorneys' fees and litigation expenses," and it is unclear how many other shareholders, if any, are part of Maulano's class action suit. Take-Two was not immediately available for comment on the suit, but said in its disclosure: "The Company and its Board of Directors believe these claims lack merit, and intend vigorously to defend against them."

This is a different lawsuit from one filed last month by Prickett, Jones & Elliott on behalf of Take-Two shareholder Patrick Solomon. Solomon aims to sue Take-Two management over the controversial compensation boost.

Bonus info: Why take Take-Two to court rather than simply make a proposal for a vote in the annual meeting? As we learned yesterday, only shareholders who bought Take-Two stock before the cut-off deadline can submit proposals or vote at the meeting — and those that bought stock after EA's bid aren't eligible to vote. It's unclear how long Maulano has been a shareholder, but even if he is one of those able to vote, it may be that there wouldn't be enough people on his side of things at tonight's meeting.

Later this evening — 6:00 PM Eastern Time, to be exact — Take-Two will hold its annual meeting for investors. When Kotaku spoke to some analysts yesterday to help lay out exactly what's been going on regarding EA's aggressive bid to buy the company, and we learned that today might turn out be a very big day for progress in that arena.

EA also revealed this morning that the Federal Trade Commission has filed a second request for information on the proposed transaction, so that it can investigate possible anti-competition issues — though the FTC has drawn no conclusions yet, and requires more time to investigate.

We'll follow this story as it develops throughout the day and keep you posted.

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.]

"Hubert Larenaudie is an experienced senior executive who has successfully built or expanded Asia Pacific operations for prominent interactive entertainment and consumer goods companies," said Gary Dale. "His in-depth knowledge of the region; his skill in creating the right product development, distribution and marketing strategy for each local market; and his track record of driving growth will help Take-Two realize the tremendous opportunities in APAC."

Along with EA, Larenaudie's previous employers also include Vivendi Universal, with whom he helped establish World of Warcraft's foothold in the region.

This is Take-Two's way of showing their shareholders that they mean business. They aren't selling to anybody, dammit! This train is barreling at full-speed and no EA is going to bar their path! Don't bail on us please, okay? We'll see how this whole strategy pays off during Take-Two's annual stockholder meeting this Thursday.

Take-Two Interactive Software, Inc. Announces Asia Expansion Strategy; Adds Senior Market Leader Hubert Larenaudie to Head Asia Pacific

Focus on Broadening Distribution and Launching Online Game Offerings in High Growth Asia Pacific Markets

New York, NY - April 14, 2008 - Take-Two Interactive Software, Inc. (NASDAQ:TTWO) today announced that Hubert Larenaudie, an accomplished senior executive with more than 15 years' experience in building successful Asia Pacific businesses, has joined the Company to spearhead its expansion initiatives in this rapidly growing region. Mr. Larenaudie, who previously served in senior roles with Electronic Arts and Vivendi Universal Games, holds the newly created position of President for Asia and is establishing an office in Singapore as the focal point for Take-Two's Asia Pacific operations. He will report to Gary Dale, Executive Vice President of Take-Two.

The top priorities for Take-Two in the region include: expanding distribution in the Asia Pacific (APAC) for the Company's interactive entertainment products; developing a strong presence in Japan; and establishing a meaningful online game operation, especially in China and Korea.

"Hubert Larenaudie is an experienced senior executive who has successfully built or expanded Asia Pacific operations for prominent interactive entertainment and consumer goods companies," said Gary Dale. "His in-depth knowledge of the region; his skill in creating the right product development, distribution and marketing strategy for each local market; and his track record of driving growth will help Take-Two realize the tremendous opportunities in APAC."

Mr. Larenaudie added, "Many of Take-Two's franchises, such as Grand Theft Auto, Midnight Club, Sid Meier's Civilization, and BioShock are international hits, and already have attracted large and enthusiastic fan bases in markets such as Japan, South Korea and China. With the Company's portfolio of leading brands, growing sports business, extraordinary creative talent and global appeal, I see exciting potential to build a significant Asia Pacific business for Take-Two, with a particular emphasis on the online game segment of the market."

Before joining Take-Two, Mr. Larenaudie was President of Asia Online for Electronic Arts. While there, he established leadership positions in the South Korea, China, Japan, Taiwan and Southeast Asia markets and oversaw product development, licensing and studio acquisitions in the region. Previously, he was President-Asia Pacific of Vivendi Universal Games (VUG). Under his supervision, VUG became one of the most successful interactive entertainment companies in the Asia Pacific region, with extensive market penetration for its World of Warcraft brand. Prior to that, Mr. Larenaudie held a variety of management positions in Asia, Latin America and Europe in high growth consumer goods companies.

"The actions of the Take-Two Board may increase the risk for their stockholders by delaying a potential transaction," said Owen Mahoney, Senior Vice President of Corporate Development at EA. "We continue to believe that our $26.00 per share offer price is full and fair, and that a transaction between Take-Two and EA is the most compelling combination financially, strategically and operationally for all parties."

In response to Take-Two's actions, which include moving the annual stockholder meeting to April 17th, EA has amended its tender offer, extending the offer from April 11th to April 18th, under condition that T2's board either redeem the stock purchase rights issued with the stockholder rights plan, or they are assured the rights have been invalidated, at least in regards to their takeover bid.

I layman's terms? Take-Two laced their stock with poison. EA modified their offer to eliminate said poison. Take-Two moved their stockholder meeting past the offer deadline, and EA extended the offer deadline to compensate. It's very much like watching a chess game - you care about the outcome, but the match itself is boring and a bit confusing unless you understand exactly how the game works.

EA Amends Take-Two Tender Offer and Extends Expiration Date to April 18, 2008

REDWOOD CITY, Calif.—(BUSINESS WIRE)—Electronic Arts Inc. ("EA") (NASDAQ:ERTS) today announced that it is amending its tender offer for all of the currently outstanding shares of common stock of Take-Two Interactive Software, Inc. ("Take-Two") (NASDAQ:TTWO). The amendments are in light of the actions publicly disclosed by Take-Two on March 26, 2008, including its adoption of a poison pill and change to the date of its 2008 annual meeting of stockholders to April 17.

The principal amendments to the offer include:

* EA has added a condition to its offer requiring either (1) that Take-Two's Board of Directors redeem the preferred stock purchase rights issued as a result of Take-Two's adoption on March 24, 2008 of the stockholder rights plan, or (2) that EA be satisfied that such rights have been invalidated or are otherwise inapplicable to its acquisition of Take-Two.
* EA has extended its tender offer for all of the common stock of Take-Two until 11:59 p.m., New York City time on Wednesday, April 18, 2008, unless further extended. The offer was previously set to expire at midnight, New York City time, on April 11, 2008.

"The actions of the Take-Two Board may increase the risk for their stockholders by delaying a potential transaction," said Owen Mahoney, Senior Vice President of Corporate Development at EA. "We continue to believe that our $26.00 per share offer price is full and fair, and that a transaction between Take-Two and EA is the most compelling combination financially, strategically and operationally for all parties."

EA commenced on March 13, 2008 its all-cash tender offer to purchase Take-Two shares for $26.00 per share, which represents a 64% premium over Take-Two's closing stock price on February 15, the last trading day before EA sent its revised proposal to Take-Two.

As of 5:00 p.m., New York City time, on Thursday, March 27, 2008, approximately 5,000 shares of Take-Two had been tendered in and not withdrawn from the tender offer.

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]

"The timing of (the offer) was really driving off of what we think is best for the company," Mahoney said. "The offer has been open for two weeks now, the longer it is out there the less valuable it is."

On Tuesday Take-Two reiterated their position during their earnings report conference call that they would not be selling to Electronic Arts.

"We wanted to learn what they had to say and once we learned that we decieded the right thing to do was to bring it right to shareholders," Mahoney said.

Early this morning EA announced their tender offer which would buy up shareholders' Take-Two stock at the same $26 a share offered to the company, provided that they can land at least 51 percent of the company.

Come the midnight deadline on April 11 Electronic Arts will either have the shares needed to vote out the board and install their own, buy-out friendly, folks, or they could extend the deadline. They could also, Mahoney points out, decide it's time to walk-away from Take-Two.

"I do not know," Mahoney said, when asked if Take-Two is a done deal. "I don't know if it's a done deal or not, all I know is what we are offering is a fair price.

"Our shareholders expect us to be very price disciplined."

Mahoney added that EA would still love to come to an agreement directly with the company, but said there really aren't any formal negotiations going on. John Riccitello did call Take-Two management yesterday to let them know about the upcoming tender offer.

You know what they say EA? No? Well take my advice, you've got to hold her, don't squeeze her, never leave her... you've got to try a little tenderness...

Now Take-Two is "recommending" that stockholders give the offer a pass.

The Board of Directors of Take-Two Interactive Software, Inc. (NASDAQ:TTWO) today recommended that Take-Two stockholders take no action at this time in response to the announcement by Electronic Arts Inc. (NASDAQ:ERTS) that it has made an unsolicited conditional tender offer to acquire all of Take-Two's outstanding shares of common stock for $26 per share in cash.

Consistent with its fiduciary duties, and in consultation with its independent financial and legal advisors, Take-Two's Board will review and consider EA's offer, and within 10 business days, will advise Take-Two's stockholders of the Board's position regarding the offer as well as its reasons for that position.

This coming from the board that just voted itself big fat raises? Big fat chance Take-Two.

"We expect that in order to save face, Take-Two management will withdraw its demand that any discussions wait until after the launch of GTA IV, and we think that management will engage in discussions with EA,"

GTA IV to sell 9m units, ship 6m in first week [GamesIndustry.biz]

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]

While most of the development duties sound like they'll be undertaken by the Marin studio, Take-Two's Strauss Zelnick echoed Feder's praise, saying that Levine is "critical to BioShock." 2K Boston is said to be working on a separate intellectual property for 2K Games, but hopefully Ken will be at the very least creatively consulting on BioShock 2.

According to Take-Two, the delay is due to the need "to allow additional development time for this highly anticipated game and provide a better balance in the release of Take-Two's triple-A titles."

Take-Two also noted that the original BioShock has 2 million unit sales under its belt since its August '07 release. No pressure, 2K Marin! No pressure at all.

Sure, comparing EA to the Galactic Empire has lost its shine, but seeing a Photoshopped John Riccitiello donning a Darth Vader helmet? That's gold, Jerry. Gold! The guest appearance from "Chatty" Mike Pachter makes it worth your page load.

EatTake2.com [via NeoGAF]

GameCyte points out that not only did EA register the EATake2 domain name through a proxy on February 22, two days before the buy out proposal went public, it also snapped up eaubisoft.com. While EA already has a 19.9% stake in Ubisoft, the French publisher is becoming a more expensive acquisition prospect, based on some of its recent successes.

Yes, the evidence is circumstantial and EA may simply be parking the domain in case any squatters get quick buck ideas, but interesting nonetheless.

EA and Ubisoft? [GameCyte]

Take-Two Interactive on Yahoo Finance [Yahoo]

What EA Would Gain

First, let's put things into perspective from a game standpoint. What games are we talking here? Well EA would of course get Rockstar, which means Grand Theft Auto would be theirs, along with Midnight Club and Manhunt - though at this point it's probably best to toss that one out the window. Then there's 2K Games, which would give them BioShock and the upcoming games Mafia 2 and Borderlands - not a bad haul. EA would also suddenly own Firaxis - and thus every game with a Sid Meier in front of it - Civilization, Pirates, etc. That's an awful lot of property there, isn't it, and that's not even considering the 2K Sports situation, which brings us to...

The Cons

2K Sports No More - EA certainly isn't going to compete with themselves, are they? I see no reason for their to be a 2K Sports label anymore when EA Sports would do so nicely. This means whatever is left of the 2K Sports games - NBA, NHL, MLB, and College Hoops - gone. Remember how we worried when EA announced they had signed an exclusive deal with NFL? This would wipe out their major competition in one fell swoop, while filling in a few holes with games like Top Spin. Not good.

Attack of the Sequels 2008 - A Grand Theft Auto game right now comes along every few years, completely knocks us on our asses and then goes back to the drawing board, lurking in the shadows until they are damn well ready to knock us on our asses again. Can you imagine what EA would do with this franchise? Maybe not a new one every year, but spin offs, alternate reality versions, etc. With the resources at their disposal, we'd see GTA everywhere - even moreso that we will this April - until we are completely sick of it. Then we'll see it some more. In our earlier interview with Riccitiello, the EA CEO addresses this concern by pointing out last year's reorganization, which placed greater emphasis on the developers over the EA brand, but I cannot honestly see how they could resist milking GTA for all it's worth.

Goodbye Free Downloadable Content - Remember that nice chunk of free DLC Take-Two released for BioShock at the end of last year? How much do you think EA would have charged for it? My guess? More than free. I'm imagining new car packs for Grand Theft Auto for 500 points a shot here. Maybe even some costly DLC that makes some of those EA Sports titles play like their often superior 2K counterparts! That would just be completely awesome.

Lower Quality Standards - Aside from some of the issues with BioShock, Take-Two developers generally take their time with their products, making sure everything is polished to a fine shine before passing it onto the consumer. EA isn't so bad when it comes to quality, though nowhere near Take-Two standards. A bigger company with strict deadlines makes for mistakes...it happens.

GTA: Brought To You By Axe Body Spray - Simply put, EA believes in in-game advertising. Not just signs, but product placement in every location possible. From road signs to the brand of cell phone your character uses, the clothing he or she wears and the cars he or she drives. Imagine Grand Theft Auto with all the cute, fictional radio ads replaced with advertisements for real-world products. Imagine stopping by Pizza Hut to replenish your health before heading off to Old Navy to pick up a fleece hoodie. Imagine hell. Eerily similar, yes?

That's plenty of negative points, but what about the positives?

The Pros

Console Exclusive No More - This might be a mark in the cons category for many of you who still believe having a game only on your console somehow empowers you to be a dick in forums and blog comment sections, but I see this as a good thing. I own all three consoles, but I know plenty of people who don't. People who sunk all their cash into a PS3 and then sit around reading all of our stories gushing over BioShock before curling up in the corner and crying themselves to sleep. EA doesn't like console exclusives. EA would launch the next GTA for all consoles, including the Wii, DS, PSP, and mobile phones.

Jack Thompson Versus EA - I would absolutely love for Jack to send a threatening letter to EA lawyers regarding a violent game release. They would devour him whole, and then make a game about it. Take-Two likes to play footsie with him because of the publicity he generates I'm sure, but EA don't play that.

BioShock and System Shock - Having both of these franchises under one company could prove to be incredibly awesome. Imagine a Victorian steampunk BioShock sequel with ties to a brand new System Shock title? I know, two different franchise, two different realities, but hell. I can dream. I just think it would be nifty to have the two universes click together somehow.

The Verdict

So, what did I miss? As far as I can see that's five cons to 3 pros, and honestly that last pro was a bit of a stretch. Do I think Take-Two should allow EA to purchase them? No. I believe that Take-Two has the strength to carry on without EA interference. With games like GTA IV, Mafia 2, and Borderlands coming soon, as well as the closest thing EA has to competition in the sports arena, I don't think this is necessary at all, and from a gamer standpoint I think it would hurt Take-Two's properties more than help.

Now on the other hand, were I a shareholder, the offer would sound mighty, mighty tempting to me right now...which is of course EA's plan. Here's hoping it doesn't pan out, and if it does...here's hoping I am wrong.

Trailers like this remind us that maybe the most overlooked talent at Rockstar is its video editing crew, and that love ain't always chocolates and perfume...unless chocolates have evolved to crack their own nuts...in which case we are all doomed.

"We have an excellent working relationship with 2K Games and the utmost respect for them," said Petr Vochozka, CEO of 2K Czech. "We are pleased to become a 2K studio and are confident that this new partnership will strengthen our current and future projects."

Take-Two Interactive Software, Inc. Acquires Illusion Softworks

New York, NY - January 7, 2008 - Take-Two Interactive Software, Inc. (NASDAQ:TTWO) today announced the acquisition of Illusion Softworks, a premier Central European-based game development studio with operations in Brno and Prague, the Czech Republic. Illusion Softworks has approximately 200 employees and will join Take-Two's 2K Games publishing label as its newest studio, 2K Czech.

Established in 1997, Illusion Softworks is the creator and owner of several hit video game franchises, including Mafia, Hidden & Dangerous and Vietcong. The studio is currently working with 2K Games on Mafia II, the sequel to the original Mafia, which helped establish the gangster genre and sold more than two million units.

"The acquisition of Illusion Softworks reflects our strategic focus on owning high-value intellectual property as we continue to expand our portfolio of triple-A titles," said Ben Feder, Chief Executive Officer of Take-Two.

Christoph Hartmann, President of 2K, said, "Adding 2K Czech to our network of development studios demonstrates our strong commitment to creating great franchises and building world-class creative teams. The 2K Czech team is responsible for several very innovative and highly-regarded franchises and we look forward to continuing to develop new and existing IP together."

"We have an excellent working relationship with 2K Games and the utmost respect for them," said Petr Vochozka, CEO of 2K Czech. "We are pleased to become a 2K studio and are confident that this new partnership will strengthen our current and future projects."

The BBFC was today given permission to judicially review the decision by the Video Appeals Committee to overturn the Board's rejection of the video game Manhunt 2. The Board has also been granted a stay on the classification of the game. It is expected that the case will be heard in January.

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]

"We are disappointed that the BBFC has decided to appeal its own Video Appeals Committee's judgment in favor of an 18-plus certificate for Manhunt 2," said Take-Two chairman Strauss Zelnick.

"We believe the VAC decision was correct and do not understand the BBFC's decision to expend further public resources to censor a game that contains content well within the bounds established by the BBFC's 18-plus ratings certification."

See? The news is always more interesting if you apply the vast power of the human imagination to it. Otherwise this would have just been a giant "Duh!" of a story, but now we have a gripping tale of tragedy for the ages. Were it a movie it would end with the sound of quiet tears as the camera slowly zooms in on a pile of forgotten pizza boxes.

Take-Two disappointed with BBFC decision [GamesIndustry.biz]

"We're focused on continuing to bring new brands and cutting-edge gameplay to market with the creation of the 2K Marin studio," said Christoph Hartmann, President of 2K. "2K Marin will build upon our success in creating and leveraging AAA franchises."

Take-Two Interactive Software, Inc. Announces Formation of 2K Marin

New Northern California Based Development Studio to Focus on Creating Original, Industry-Leading Intellectual Property

NEW YORK—(BUSINESS WIRE)—Take-Two Interactive Software, Inc. (NASDAQ: TTWO) today announced the formation of 2K Marin, a new development studio under its 2K publishing label. Located in Novato, California, 2K Marin will develop original intellectual property, as well as co-develop products with other 2K studios around the world.

"We're focused on continuing to bring new brands and cutting-edge gameplay to market with the creation of the 2K Marin studio," said Christoph Hartmann, President of 2K. "2K Marin will build upon our success in creating and leveraging AAA franchises."

2K Marin is the newest studio to join 2K's outstanding group of development studios located in Asia, Europe, Australia and North America.

For more information, visit the 2K Games website at www.2kgames.com.

"I don't think that this is an issue of dissatisfaction with Take-Two; rather, I think it is rational to believe that in the wake of the $850 million Pandemic/BioWare deal, high quality developers like Bungie and [Rockstar] North would look to test their market value"

Pachter: GTA Dev Rockstar North May Eventually 'Pull a Bungie,' Split from Take-Two [Shacknews]

Michael Pachter of Wedbush Morgan told GameDaily "EA has no interest in TTWO, too much to turnaround, and no guarantee of keeping the talent." He adds "EA has enough problems with their own turnaround, doesn't need the headache", pointing to a potential Rockstar Games split from its publisher in 14 months.

Mike Hickey of Janco Partners responds that if EA's going to be buying, they may very well snatch up Take-Two. "The most obvious potential acquisition in our view would be Take-Two Interactive", he says, as the acquisition of Take-Two could "eliminate their most powerful competitor in the sports market, improve their overall sports portfolio product quality, allow entry into sports categories currently protected by exclusive licensing agreements (MLB), and with essentially the same cost structure."

Having the Grand Theft Auto series under the umbrella wouldn't be so bad, either.

Majority consensus is that EA will still continue to expand, but may loo