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Your email address will not be published.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 359: Longtime ListenerEpisode 359: Longtime Listener

The podcast is back, albeit on a Saturday instead of the usual Friday. No Gaming Flashback or Gaming History, but a good chunk of news, though some of it only tenuously connected to videogaming.

The news this week includes:

  • T-Mobile now offers app that unlocks your smartphone
  • Analyst: Downloadable titles make up 92% of PC games market
  • Driveclub was delayed due to a ‘huge technical issue,’ says Yoshida
  • NHL 15 will be missing some features on Xbox One and PS4
  • YouTube subscription plan leaks: Offline play, no ads, 20 million songs

This week’s Question of the Week is based on the Minecraft convention scam from last week, which the podcast discusses, “Have you even attended a convention devoted to a game?”

Episode 255: The Darkness II ContestEpisode 255: The Darkness II Contest

Dan Quick returns again to cover for Paul Nowak, and this week, the Gaming Podcast is offering free copies of The Darkness II Limited Edition, which comes with the main game and some free DLC. The guys are giving away an Xbox 360 version and a PlayStation 3 version. To win, just listen to the podcast and post what your favorite scary movie is.

The game news this week includes:

  • Ex-SCEE senior VP Phil Harrison joins Microsoft’s European team
  • DOOM developer John Romero has “plans” for “old school” shooter
  • EA defends Mass Effect 3 From Ashes DLC data being on disc
  • Notch settles with Bethesda over “Scrolls” trademark
  • DICE: 2GB RAM won’t be enough for next gen consoles
  • Angry Birds theme park to open in Finland
  • GAME puts itself up for sale, GameStop interested
  • Diablo III release date announcement “in a few days“, no PvP in launch version

And yes, they know that the announcement was just made today – May 15th release date for Diablo III.

The contest to win either the Xbox 360 or PlayStation 3 version of The Darkness II will run this and next week, with the winners announced in Episode 257.