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The never-ending saga between Take-Two and Electronic Arts hit another checkpoint today as EA came to an agreement with the Federal Trade Commission, and now will not purchase Take-Two until regulators finish their probe of the possible agreement, or 45 days pass. These probes tend to last 30 days, so 45 days lapsing probably won't be an issue. However, if the probe lingers on, it could indicate that there is concern about the possibility of the sports game market being cornered (see monopoly).

This is just the latest road block EA has come face to face with while pursuing Take-Two, and all the while Take-Two has seemingly been looking stronger and stronger. Certainly this narrative has some more chapters left to be told.

For reference, via Reuters:

"Take-Two shares rose 1 percent to $27.37, and EA shares were 1.4 percent higher at $49.25 on Nasdaq in late morning trading."

EA has made a deal with the FTC, agreeing to hold off on buying Take-Two until after the Commission can finish a probe. [GameDaily via Reuters]

Member Comments
# 1 Stumbleweed @ 06/04/08 03:29 PM
Good news. There is a legitimate concern about a near-monopoly on sports games with the number of licenses that EA has bought up and the number of other games that have basically failed due to it (APF, Blitz, etc.)... Sony is really the only other competitor (thanks to The Show) aside from Take-Two, but they're first-party, so it's a whole different thing.

I'm glad that the FTC is checking into this and that it's delaying any buyout until NBA 2K9 can get mostly developed... From the looks of it, I'd say that they won't be selling any time soon.
 
# 2 MMChrisS @ 06/04/08 04:10 PM
Quote:
Originally Posted by Jon22
So, when do they have to pay that loan back? HA!!!
I think the loan has been granted on the sole basis of EA buying Take Two...so if the deal isn't done, the loan isn't granted.

However, what a blunder that would be
 
# 3 bkfount @ 06/04/08 04:35 PM
Quote:
Originally Posted by Stumbleweed
Good news. There is a legitimate concern about a near-monopoly on sports games with the number of licenses that EA has bought up and the number of other games that have basically failed due to it (APF, Blitz, etc.)... Sony is really the only other competitor (thanks to The Show) aside from Take-Two, but they're first-party, so it's a whole different thing.
People here are only focused on the sports games, which is fine, but I doubt the FTC is even highly concerned about the sports genre and anti-competitive moves within. EA getting 2k doesn't do that much more harm than what they already did by hoarding exclusive licenses.

However, Take Two also deals with publishing and distribution of various games for other developers. The outcome of a buyout wouldn't just affect one specific genre of gaming, but actually the relevant options of other companies to get their games out on a large scale efficiently.

Even so, Take Two was ranked last year as the 6th largest game punblisher in the industry. There's still Ubisoft, THQ, Activision, EA, and Nintendo ahead of them. Sega, Sony, Capcom, MS are others.
 
# 4 ChaseB @ 06/04/08 05:30 PM
Quote:
Originally Posted by bkfount
People here are only focused on the sports games, which is fine, but I doubt the FTC is even highly concerned about the sports genre and anti-competitive moves within. EA getting 2k doesn't do that much more harm than what they already did by hoarding exclusive licenses.

However, Take Two also deals with publishing and distribution of various games for other developers. The outcome of a buyout wouldn't just affect one specific genre of gaming, but actually the relevant options of other companies to get their games out on a large scale efficiently.

Even so, Take Two was ranked last year as the 6th largest game punblisher in the industry. There's still Ubisoft, THQ, Activision, EA, and Nintendo ahead of them. Sega, Sony, Capcom, MS are others.
If you read the N'Gai Croal piece I linked to I'd say the FTC definitely cares somewhat -- or has reason to care.
 
# 5 spit_bubble @ 06/04/08 07:43 PM
Quote:
Originally Posted by Slizeezyc
If you read the N'Gai Croal piece I linked to I'd say the FTC definitely cares somewhat -- or has reason to care.
Too lazy to read. Someone give it to me in a nutshell... As to why the FTC might have problems with the deal.
 
# 6 spit_bubble @ 06/05/08 04:37 AM
Quote:
Originally Posted by koshi
Too lazy to read. Someone give it to me in a nutshell... As to why the FTC might have problems with the deal.
Okay, just read it...

You can pretty much skip most of the article, and look at the second paragraph for a summation:

Section 7 of the Clayton Act forbids the acquisition of stock or assets when "the effect of such acquisition may be substantially to lessen competition, or to tend to create a monopoly."

Not sure if the FTC has a case, based on:

1. The only remotely monopolistic thing EA would acquire is the MLB license, but that's not even fully exclusive.

2. Yeah they'd eliminate competition from 2K's NHL, NBA, and College Hoops (if 2K ever renewed it's College license), but that's hardly a monopoly. Other companies can come in and make competing NHL, NBA, or College Basketball games if they want.

3. I've read that some of the developing talent at Take Two has outs in their contracts if Take Two is ever bought out. So EA would potentially lose, or at least not acquire, certain studios and/or people... Though I'm not sure to what extent. So there is a question as to whether or not it lessens the competition.

4. Sports games have a short shelf life. So prices on sports games come down relatively quickly anyways, competition or not, just because they become dated. The same can pretty much be said for other genres as well, as you see prices eventually drop on all games. So no real harm is done to consumers.

I don't know... I don't really see anything that the FTC can call EA out on.

The bigger item of intrigue in this whole story is the as of yet named other interested parties supposedly talking with Take Two.
 
# 7 DC @ 06/05/08 09:17 AM
Leave us the hell alone EA damn man
 
# 8 NEW_ORLEANS @ 06/05/08 10:52 AM
lol
 
# 9 t216 @ 06/05/08 12:43 PM
Let's hope this deal doesn't go through.
 
# 10 mgoblue @ 06/06/08 02:59 AM
I just fail to see how this could be a monopoly. Pro leagues and Pro Player Associations have the right to sell exclusive rights to anyone. Reebok could be the only supplier of jerseys for all sports and it'd be legal. It's the same with sports games. Other people can still make football, baseball, hockey, whatever games, just not with the license. That's not a monopoly on sports games, it's just owning the licenses.

Sure, do I want competition, yeah. Just don't want people to get their hopes up when it's highly unlikely this would be a monopoly.
 
# 11 spit_bubble @ 06/06/08 03:27 PM
Quote:
Originally Posted by kcxiv
Its not a "real" monoply, but it is in every sports gamers best interest that this NEVER EVER happens. I think thats why the FTC is stepping in.


Yeah, the FTC... Looking out for sports gamer's interests. Even Ralph Nader is rolling his eyes at that one.
 
# 12 mgoblue @ 06/08/08 09:02 PM
Quote:
Originally Posted by koshi


Yeah, the FTC... Looking out for sports gamer's interests. Even Ralph Nader is rolling his eyes at that one.
Was out of town for a wedding so just seeing this, but I agree 100%. The FTC doesn't give a flying fark about sports gamers best interests...that's completely laughable. I don't know what you guys think the FTC does, but they aren't a mystical magical power who can do whatever they feel like....
 
# 13 ZB9 @ 06/08/08 09:55 PM
Quote:
Originally Posted by koshi

Section 7 of the Clayton Act forbids the acquisition of stock or assets when "the effect of such acquisition may be substantially to lessen competition, or to tend to create a monopoly."
seems pretty clear to me what EA's intention is...and it should not be allowed imo
 
# 14 Gotmadskillzson @ 06/09/08 02:52 AM
Keep in mind.......Take Two makes more then sports games. They also make a ton of PC games. Which to date, they have the majority of the PC gaming market.

If EA bought Take Two, EA would have a monopoly on the PC gaming market, because they are #2 in the PC market. It was that threat that really made the FTC step in.

EA would have had too much power in the gaming industry.

They would have had the following:

The Sims franchise- huge seller on the PC

Civilization franchise - the #1 franchise of all time for PC games.

GrandTheft Auto franchise

Guitar Hero franchise

Pogo - widely popular with over a million registered users

Sports games on lock.

Plus many more PC games that are million copy sellers. And EA would have had it all linked together under the EA Nation banner. With all those users EA Nation would have surpassed even Xbox Live when it came to registered users and in effect, could have broke off from Live.
 
# 15 spit_bubble @ 06/09/08 06:10 AM
Quote:
Originally Posted by ZB9
seems pretty clear to me what EA's intention is...and it should not be allowed imo
But by the word of the law, they aren't necessarily lessening the competition, nor would they have anything close to a monopoly.

Quote:
Originally Posted by Gotmadskillzson
...EA would have had too much power in the gaming industry...

...Guitar Hero franchise...
Power doesn't equate to a monopoly, as a monopoly is exclusive control... And power doesn't equate to wrongdoing, as they are two separate things.

Guitar Hero?! Uh... Activision???
 
# 16 mgoblue @ 06/09/08 01:19 PM
Quote:
Originally Posted by Gotmadskillzson
Keep in mind.......Take Two makes more then sports games. They also make a ton of PC games. Which to date, they have the majority of the PC gaming market.

If EA bought Take Two, EA would have a monopoly on the PC gaming market, because they are #2 in the PC market. It was that threat that really made the FTC step in.

EA would have had too much power in the gaming industry.

They would have had the following:

The Sims franchise- huge seller on the PC

Civilization franchise - the #1 franchise of all time for PC games.

GrandTheft Auto franchise

Guitar Hero franchise

Pogo - widely popular with over a million registered users

Sports games on lock.

Plus many more PC games that are million copy sellers. And EA would have had it all linked together under the EA Nation banner. With all those users EA Nation would have surpassed even Xbox Live when it came to registered users and in effect, could have broke off from Live.
What people don't get are that exclusive franchises/licenses does not mean monopoly. It's good business practice to cultivate exclusive franchises and purchase exclusive licenses for various IP. Companies can still make FPS games, can still make football games, etc.

Sure, does the lack of sports game competition suck? I agree 100%. I just think that everyone screaming monopoly are wishing for something that isn't going to happen.
 
# 17 fistofrage @ 06/09/08 04:39 PM
Buying take 2 isn't creating a monopoly at all. A monopoly creates barriers to entry. Me and my cousin Vinny could bring any sports game to market that we want to. Can't use the league licenses for football or baseball or NCAA, but those were up for open bid and will be again. Yes it isn't good for the consumer, but it isn't a monopoly either.

You'll see what I mean when Tecmo hits the DS and its fully customizable. Having that NFL license won't mean as much if the other programmers push the envelope on the letter of the law.
 
# 18 ZB9 @ 06/09/08 09:03 PM
Quote:
Originally Posted by koshi
But by the word of the law, they aren't necessarily lessening the competition, nor would they have anything close to a monopoly.


actually they would lessen the competition quite a bit actually...and they would have a monopoly for many of their sports titles.

why else do you think the FTC is getting involved if EA's intentions do not threat to create "anything close to a monopoly"?

One of the reasons EA is trying so hard to acquire take two (besides GTA) is to corner the sports gaming market and eliminate their competition.
 
# 19 ZB9 @ 06/09/08 09:08 PM
Quote:
Originally Posted by fistofrage
Buying take 2 isn't creating a monopoly at all. A monopoly creates barriers to entry. Me and my cousin Vinny could bring any sports game to market that we want to. Can't use the league licenses for football or baseball or NCAA, but those were up for open bid and will be again. Yes it isn't good for the consumer, but it isn't a monopoly either.

You'll see what I mean when Tecmo hits the DS and its fully customizable. Having that NFL license won't mean as much if the other programmers push the envelope on the letter of the law.
yes, there was an open bid for all of the licenses...but that doesnt make it any less of a monopoly.
 
# 20 fistofrage @ 06/09/08 10:03 PM
Quote:
Originally Posted by ZB9
yes, there was an open bid for all of the licenses...but that doesnt make it any less of a monopoly.

But if you call having the rights to the NFL License for videogames a monopoly, then you are calling the NFL itself a monopoly and that simply isn't the case. Anyone can start up a professional football league, they just can't use the NFL License. Anyone can create a professional football videogame, they just can't use the NFL license. I agree it isn't good for the consumer, but would it really matter if everything was customizable? Maybe for the NBA where you need to see the players faces, but not in football where everyone is behind a mask.

Thats really the issue here, EA is doing nothing to prevent Tecmo from making a game thats fully customizable, 2k sports simply dropped the ball with All Pro football. EA has created no barriers to entry. Its really just the choice of the consumer if they want to play a licensed product or not. I don't like it, but thats the way it is.
 

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