EA and Take-Two Stock Falls Fast

It’s official, EA has given up their talks with Take-Two and, as a result, the stock of both companies is falling like a stone. While gamers may cheer knowing the Grand Theft Auto and 2K Sports product lines will continue to compete with EA products, share holders are doing a WTF?

Take-Two has had its share of financial difficulties, but nothing shakes up a stock more than a break in discussions when the words acquisition have been spoken. It causes uncertainty and lack of understanding on the part of the game industry and share holders. EA’s stock dropped 2.7% upon opening this morning but has begun to stablize as it’s clear EA isn’t in any financial peril from this breakup in discussion.

Take-Two’s stock, however, is in epic free fall with a 25% decline since the discussions ended. One theory is that, “is taking a huge beating as everyone and their mother tries desperately to sell the shares the figured EA was going to to buy.” (kotaku)

As the game industry gets more competitive, builds bigger bank-roll and becomes a staple entertainment icon there is always more business savvy people getting into the game trying to make a fast buck. In this case, the shareholders obviously aren’t pushing for Take-Two’s future decisions or product launches — this is the reaction of business folks trying to make money.

There is huge risk with block buster 100-million dollar titles and all the crazy hype involved with some of the biggest games in history. They break sales records, smoke box-office numbers and bring new gamers into the industry but it’s all at risk when money gets involved. One bad move and a company making a title like GTA can find themselves in financial peril.

With risk comes reward, but failure is always sneaking up around the corner so watch out!

Leave a Reply

Your email address will not be published. Required fields are marked *

Related Post

Episode 467: Reunion ExtravanganzaEpisode 467: Reunion Extravanganza

The landmark episode was recorded two weeks ago, but the audio was absolutely terrible, with over a half-an-hour having to be excised. It’s a pity, because it featured both Videogame Roundtable originals Paul Nowak and Jordan Lund guest-hosting for a massive (for this podcast) five-man crew.

To make up for it, Jonah and T.J. recorded a half-hour discussion of upcoming games that they might check out at E3.

There won’t be a podcast for another 3 weeks, until E3 is over, so for now. Enjoy the podcast, and sorry for the middle hour — the audio cleans up in the last part.

Yet Another PSP Re-Design?Yet Another PSP Re-Design?

It seems as if this is the third time, but SCEE has announced a new PSP design with eight different bundles being offered. This fall we should see the PSP-3000, which sounds much like a fake Acme cartoon toy, but it’s for reals.

This version will have a built-in microphone, a redesigned (brighter) LCD screen with out-of-the-box Skype abilities. The Swiss Army knife of hand-helds will keep the current outward design with inner tweaks and each bundle will cause 199 Euro.

Is the market really looking for a re-design with these features or is this Sony’s way of competing with “color DS lite” designs. Nintendo re-releases the same product with brighter colors a few years after its release while Sony seems to push a few new hardware features or enhancements.

The end result, DS still beats all expectations in unit sales month after month.

(Thanks, Kotaku)