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About those rumors Sony is buying Take-Two...

How "purely unconfirmed market speculation" turns into headlines around the industry.

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gamesindustry.biz
AspiringProGenji6d ago

Take Two is too big to be bought out so I don't know. I know Sony and Rockstar have been buddies since the PS1 days but that's about it. It's probably a deal

darthv726d ago

Nobody is too big to be bought out. It all comes down to if they are in the mood to be bought out and if the offer is to good to pass up.

In this case though, I'd agree its prob just to make a deal for GTAVI or something for the next gen.

AnthonyDavis6d ago

Sorry but this news is bigger than Brexit and Boeing crash.

AnthonyDavis6d ago

The question is if it’s worth to buy them out. Rare was $4 billion in 2005. Minecraft was some money too.

blacktiger5d ago

Rare cost $300 million USD not billion

DillyDilly5d ago

I doubt Take Two would let any main GTA game be Console Exclusive thats cutting out a fan base & missing sales on a very big franchise

AnthonyDavis5d ago

^
I mixed up the $4 Billion with the RRoD fiasco being a $4 Billion loss.

^
Also how do you cut out the fan base. Just go buy all the consoles.

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cardo6d ago

For the Million Dollar Man

rainslacker5d ago

Sony could buy me out for $20, and a mint chocolate chip ice cream cone....but if they come knocking, I'll demand two scoops, because I know they have the money.

silvacrest6d ago

Disney bought Fox for over $50 billion....anything can be bought for the right price

RosweeSon5d ago

Exactly and that’s after they’ve just bought Star Wars

Ceaser98573615d ago

Even if this is true, I believe Rockstar wouldn't want to go exclusive

OpenGL6d ago (Edited 6d ago )

They're worth about $10 billion right now as of the close of trading. In Sony's last quarterly report they were sitting on $13 billion in cash and $10 billion in marketable securities so they could make the purchase if they wanted to, the question is are they worth $10 billion? I'd say yes if Sony sees Playstation as being their only real path into the future given struggling smart phone sales, and how other divisions are stagnating or are simply not very competitive.

Artemidorus6d ago

Sony losing 10 billion isn't the right time to consider.

As a whole the company isn't doing amazing things, PlayStation brand has given it a huge boost though.

rainslacker5d ago

They wouldn't really be losing that money though. They'd be reassigning their assets from one thing, to another. Having cash is good as it means you don't have to get lines of credit when you want to maneuver. Most new CEO's in many industries worth their salt tend to sell off what isn't working to gain cash to do just that. The whole purpose of making money, is to make more money, and you don't do that by sitting on it. Buying T2 would add that worth to their company. Just like how MS spending all that money on Minecraft didn't reduce the value of their company. In some ways, such acquisitions can increase the value of the company, as potential revenues are also seen as something worthwhile to investors.

If they brought T2, and then reduced its worth some how, probably by making it a 1st party and removing a large bulk of its revenue stream, then it'd be losing an asset, at least in the short term. The long term would likely still see a return, so the value would come back...but as of right now, Sony shouldn't be trying to do that. While they've gotten over their financial troubles they had at the end of last gen, they still aren't in the strongest position to start trying to monopolize an industry.

gangsta_red5d ago

Honestly, I don't see this being real but I definitely wouldn't dismiss this as being entirely untrue.

Thinking more about this, with MS on an aquisition spree, trying to put their service on every device seemingly going hard for next gen, Nintendo Switch being a hot mobile hybrid console device gaining a lot of ground and with Google supposedly now entering the console space, I could see a reason for Sony to aquire a developer that has some of the most popular IPs in the world and making them exclusive to PlayStation.

I mean with GTA, RDR, Sony would also have NBA 2K, imagine that and Sony's MLB series together only on PlayStation.

It would definitely be a smart business move to secure a number 1 position automatically for next gen to have a new GTA, a new NBA and anything else from this dev coming only to PlayStation.

OpenGL5d ago

Prior to their Q3 2018 results Sony's previous 2 quarters were record highs for them. A purchase of this isn't Sony "losing 10 billion" it's them acquiring assets theoretically worth 10 billion. Not the same thing at all because we know for sure a large part of it will generate revenue, the question is whether it generates enough revenue to justify spending $10 billion. If it would guarantee Playstation is around and dominant 20 years from now such a purchase might be warranted.

That said I don't think this will happen for multiple reasons. It's as you point out a very expensive purchase, it may not pay off long-term, and it might also upset 3rd parties that now see themselves having to compete even more with Sony's first party offerings.

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RosweeSon5d ago

No company is too big to be bought out except maybe Disney now who amongst other things have the billion $ Star Wars franchise and are now in process of merging with fox

Kribwalker5d ago (Edited 5d ago )

i’d say it be damn near impossible to buy MS amazon apple google

UltraNova4d ago (Edited 4d ago )

Krib,

No they can't be bought outright, but they could be forced into a merger, almost the same thing as far as corporate dealings are concerned.

rainslacker5d ago

That's not really true. They're worth about 10 billion. Went up due to the stock increase. But Sony doesn't have to buy the whole company, just a controlling share. Only reason to buy all shares is if they want to remove it's public status.

I do find it funny that gameindustry.biz is trying to call out how unsubstantiated rumors are used to make headlines, as they are probably one of the most guilty of doing this, and they disguise themselves as being somehow in tune with the business side of the industry, when they're just another click bait tabloid site.

I miss the old Gamasutra which was much more respectable with things like this, and actually got people who understood what was going on to write their articles.

+ Show (4) more repliesLast reply 4d ago
isarai6d ago

It makes headlines not so much because people believe it, but because it sounds so crazy, and it would be very interesting to see what these two powerhouses could achieve together to say the least. Like the only people pushing game tech and detail more than Sony is R*, put them together and it sounds.... like.... WOAH!

Jin_Sakai6d ago

It was a pretty detailed leak also. They even listed the price they were likely paying per share.

italiangamer6d ago

That's the strangest part for me, how could they come up with that specific share price if it was normal chatter based on nothing as the analyst said?

Meanwhile on an italian site I read that Take-Two replied saying that they don't comment on rumors and speculations, basically they didn't confirm nor deny it.

Maybe someone just spilled the beans too early.

ziggurcat6d ago

"Meanwhile on an italian site I read that Take-Two replied saying that they don't comment on rumors and speculations, basically they didn't confirm nor deny it."

Anytime anyone makes that kind of PR statement, it usually indicates that the rumour is true.

porkChop6d ago

That's the thing. Those prices had no source. They guy who was quoted as the source said he never said any of this. So someone literally fabricated this rumour and came up with fake numbers.

As for why Take-Two's stock rose suddenly? Gearbox teased Borderlands 3, which is published by 2K. That's a huge game that will create a lot of hype.

ziggurcat6d ago

"They guy who was quoted as the source said he never said any of this."

That's not what he said. He said he hadn't spoken to anyone over the phone, but someone could have seen a trade note he made.

gangsta_red6d ago

@ziggurcat

The note also said...

"Kulina did release a note today that included the bit MarketWatch quoted under a heading specifying, "TTWO M&A CHATTER MAKING ROUNDS...+2.5% - NO SOURCE **UNCONFIRMED**"

No source, unconfirmed.

It's strange to see you entertain this idea from unconfirmed sources and yet not believing the rumors during the whole Crash being multiplat issue not long ago, that had way more proof than this.

SierraGuy5d ago (Edited 5d ago )

We need to face the facts. ® Is where they are today because of SONY and PS2 started it all.

This would surely prevent the next GTA and RDR and all other titles from appearing on next Xbox and Google/MadBox.

rainslacker5d ago

If the majority stake holder of T2 was in negotiations to sell his shares, which is what this rumor is, then he would not in any way comment on such a thing. That is akin to insider trading(although I believe it's called something else in that case), as it would push up the share price immediately, or in some cases cause it to drop significantly if investors felt there may be trouble brewing. It's considered unethical and illegal by the SEC, and most other world governing bodies for such things. It's only after a deal has been made that it can be made public. Often times, it does get rumored, especially if it can raise the price, because it does give the seller a better position to bargain from, but it won't be officially commented on.

Kribwalker5d ago

@ziggur

“There is nothing behind this story that I've seen," Kulina told GameSpot. "No one has found a source. Market chatter refers to simply what we hear on trading desks--happens daily, just more surprised this has gone viral like it has."”

Yep this has a basis to be believable? HA! I find it quite ironic that you would find it believable, someone that typically lives on undeniable proof before he entertains...

Michiel19895d ago

@italian
beccause they can look at the current share value and just add 10% or whatever. takes 20 seconds of work to do that.

google "Take two shares" and you are basically done. then pick a random number between 0.8-2 and multiply the shareprice by it

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Eonjay5d ago

Lol I love it too. The back and forth is entertaining.

ILostMyMind6d ago

lol

Some people were so shaken by this rumor that they had to create news denying it.

Ricegum6d ago (Edited 6d ago )

I laughed when I saw this article. Such damage control over a rumor.

solideagle6d ago

Sony will censor the shit out of GTA /s :D

AspiringProGenji5d ago

GTAV hasn’t been censored plus R* is one of those devs who doesn’t give an F about controversies and SJW. They must be used to it by now

rainslacker5d ago

They didn't censor RDR2. I think Sony is still going to be careful about censoring the big games, because it brings more attention to what they're doing. It's why I think the policy will be unequally applied, and mostly pertain to games which don't sell as much.

attilayavuzer5d ago

@Aspiring
Dan Houser literally made a statement a few months back that they're shelving GTA for a while because of the current political climate. That Rockstar was worried about the social repercussions of making another game now.

Atom6665d ago

Not to give them too much credit, but wouldn't any real journalist follow up and investigate the rumors and report on it? I set the bar low, but I would certainly hope someone looked into it further.

I checked out the IGN article too. It sounds like this may have been pure speculation turned to fabrication.

Who knows though. Would be pretty crazy.

Ausbo5d ago

It’s gamesindusty.biz

A very legitimate site. Not a fanboy blog

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Ciporta19806d ago

Surly sony don't have enough spare cash to afford to buy them. If it was that easy I'm sure Microsoft would have bought them and then ruined them.

kneon6d ago

Actually, they do have enough, but it's a huge buy for them so they would need to believe this is vital for their future before spending such a large part of their cash.

conanlifts6d ago

If Google decide to make a big push (and more than just streaming) to enter the gaming market then MS and Sony need to up their game to ensure they don't fall the way of Sega. As it is Sony's most profitable business they might think the risk is worth it. If they do buy Take two MS need to look at AAA studios, because smaller AA studios won't give them the attention they need after this. Not sure if it is true, it sounds unlikely, but it is such a big move if it is.

kneon5d ago

And that is why there is a real possibility that this is real. Google, Amazon etc. can easily afford to Buy EA or Activision. Sony can't, they would need to do a merger and that's not likely to appeal to the EA and Activision shareholders. So after those two, I think Take 2 is the next largest publisher.

Microsoft can also afford such large acquisitions, but they will likely have a lot of shareholder pushback as their past big buys have mostly been money down the drain.

KickSpinFilter6d ago

Sony does have that amount of spare cash to buy them, but that is not how it works. Take-two actually would want to be purchased, and why the hell would they. Take-two is a huge developer, across PS4, PC, XB. No way would they go for that.

rainslacker5d ago

T2 is publicly traded, and in order to buy them out, one would only have to buy 50% + 1 share of all shares to have control of the company. Sony doesn't need to buy the whole company to have control of it, and the rumor seems to point at them trying to buy out the CEO, who owns 51% of the company now.

Hostile takeovers are different, and happen when a company tries to manipulate the market cost in order to gain that control by buying from as many people as possible, which can then be used to drive the share price down, which can force the controlling interest to want to sell off. Something that Ubisoft recently went through with Vivendi. Ubisoft had to convince their investors that it wouldn't be in their best interest.

If the CEO is ready to cash out, which is possible since he'd make a lot on the sale, and he's the kind of investor that goes for that kind of thing, then it means that Sony, or another company could indeed buy them out.

PSNintyPCTri6d ago

They made $21 billion off of PlayStation in 2018, and that’s not even their most profitable division. Sony could afford it. The question is, would they want to?

King_Noctis6d ago

Which one is Sony most profitable division?

TheUndertaker856d ago

PlayStation is their most profitable division. By a landslide. Many of Sony’s other divisions cost them money.

Sony’s revenue as a whole company in 2018 was $22 billion. So less than $1 billion came from every other division.

PSNintyPCTri5d ago (Edited 5d ago )

@King

Sony’s Insurance and Sony Music are bigger than PS.

They are typically viewed as separate entities though, and not grouped in with Sony’s overall profits

King_Noctis5d ago (Edited 5d ago )

@PSNinty

I don’t know what your source is, but based on my checking as of 2018 Sony Record earn around $1 billion while Sony PS earn around $2.1 billion. Sony Insurance on the other hand earn nowhere near that amount.

https://en.m.wikipedia.org/...

https://variety.com/2018/di...

https://techcrunch.com/2018...

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tontontam06d ago

Yup if it is not easy for microsoft. Half of the potential profit will be lost if they make the games exclusive to xbox one and pc.

jaycptza5d ago

Clearly have no idea how they structure deals.

rainslacker5d ago

They have about 22-25 million in cash just sitting there. That's not assets, but cash. Cash doesn't make them money, except on interest. Having cash is good, because it allows them to buy things that will make them money instead of having to take out lines of credit to buy things. That makes them more maneuverable to take advantage of things like buying up new assets which can return them more cash. The way business works is that when they do a big buyout, that entire cost is put into the fiscal year it gets done. Every year after that is seen as revenue from whatever money comes in from that acquisition. That can help raise their value, thus they end up getting even more cash without actually doing anything.

Business is weird. If people managed their own finances like that, they'd be bankrupt, and probably in jail, because while credit is a thing, you can't pay your bills with the assets you have in your home.

SuperSonic915d ago

Thanks rainslacker for telling the truth and being the logical level headed guy around here.
The voice of reason.

jaycptza5d ago

No company uses straight Cash to buy another. There is usually some kind of mix with taking over liabilities, etc

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