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!

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Sony, Next Big Software Company?Sony, Next Big Software Company?

Every day we’re hearing of a company running through a round of layoffs or going out of business, it’s really not a happy time. Sony is not immune to the economic troubles either. Sony is talking restructuring and that involves a potential head count reduction of 16,000 jobs due to plant closings.

floppyThis leaves Sony with some hard decisions. Restructuring can mean drastic changes that effect all their product lines. The PlayStation 3 isn’t currently a shining example of high profit margins. The console needs time to reduce its overall cost, chip sizes and bring profitability. Is it in danger?

“Sony’s not in a position to halt all domestic production but it has to do something that drastic,” said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management. “If it announces plans to move production overseas while keeping only planning and development functions in Japan, that would be a positive.” (gamestooge)

The yen is losing value in our global economy making it more difficult to export the product and build any type of profitability plan. “A source said this month the company will likely suffer an annual operating loss of about $1.1 billion, its first such loss in 14 years” (news.yahoo.com) All this noise is making CEO Howard Stringer contemplate Sony’s involvement as a “software only” company, making us recall the changes at SEGA to this same result.

The Financial Times reported Sony will unveil details of its restructuring steps on Wednesday or Thursday. It said Chief Executive Howard Stringer was meeting with resistance from some executives to shifting the company’s focus to software from hardware and cutting jobs in Japan. (news.yahoo.com)

Is this just a case of a fearful executive trying to lay plans for a more stable future? Software is easier to develop, pays for itself quickly and becomes pure profit as it ages. Hardware requires constant upkeep at manufacturing facilities, chip reductions and a boat load of quality planning for first shipment. Would Sony go full software?

Let’s face it, Sony isn’t SEGA, they’ve been developing hardware for consumers since anyone can remember and they’ve been doing it with quality and market penetration. It seems absurd to think they’d forgo hardware designs in replacement of a full software solution to the problem. In addition, Sony has already invested a large amount of cash into seeing PS3 through it’s 10-year plan and letting that die now is realizing a huge loss on investment.

If Sony pushes through the economic and maintenance course, the PS3 will become highly profitable, much like the PS2 last generation (with a slower ramp up for sales). Even if they break even after ten years it seems a lot better than throwing all the effort away.

Perhaps Howard Stringer is talking “software” for the next generation home console? You think Sony will create a PlayStation 4?

Diablo III: Confirmed and IsometricDiablo III: Confirmed and Isometric

We’ve talked about it on the podcast before, we’ve made speculations and we’ve come up with theories. Blizzard has now cleared up much of the fuzzy details and theories by announcing their next title: Diablo III.

Some of us thought it was too early to announce the game, right on the heals of a StarCraft III announcement but Blizzards marketing team must consider this the perfect time, as it’s official. Not only did they announce the title, but they’ve got a cinematic and a good five minutes of game play footage.

We’re not talking about vaporware, this is a real game with really sweet features, hot new graphics and sound and enemies that make prior diablo look like childs play. The worlds are destructable, you can drop walls upon your enemies, toss them over cliffs (on fire no less) and rescue people whom help you do battle.

The game play footage covers barbarian (fighter) class and the witch doctor (sorta a necromancer archtype) with both male and female varients. They explain some of the great powers of the warrior style class and show off a few of the neat spells for the witch doctor. From electric axes to walls of zombies this game is packed with stylish battle techniques unique to Diablo 3.

Diablo 3 utilizes their standard isometric view, familiar to Diablo gamers with a bit more ease to the control scheme (that’s possible) and health now drops from enemies much like Zelda, you won’t have to pack yourself with potions anymore. Quite possibly the best upgrade in the third revision of Diablo.

Release date? No clue. I’m sure they’re going on the “when it’s ready” methodology, which is expected from Blizzard and their games; there is a reason they’re always of the highest quality. You may want to camp on their FAQ for a few months and perhaps you’ll have the answer. Today, however, their site seems to be a bit slow with all the announcements going out on the Net.

Now that Diablo 3 is confirmed, it’s time for us to buy some thc leans from Fresh Bros and start speculating what’s going to be included. Make sure you checkout their game play video!

(Thanks, Nukoda)