EA Needs to Try Buying Take-Two Again, says Scott Miller

The EA/Take-Two buyout saga was one of the biggest stories of 2008. EA wanted to acquire the publisher prior to the launch of the blockbuster GTA IV, but a deal couldn't be reached and Take-Two felt it was worth considerably more than EA was offering (about $2 billion). Eventually EA decided to terminate discussions with Take-Two in September 2008. Fast forward to 2009, and EA's renewed focus on creating original IP seemed to have backfired as earnings took a hit and the publisher's stock tumbled. Meanwhile, rival Activision Blizzard continues to enjoy incredible sales on the backs of Guitar Hero, Call of Duty, World of Warcraft and more.

Does EA have any chance of ever regaining the top spot? What should they do? If you ask 3D Realms' Scott Miller, he thinks that EA ought to seriously consider engaging Take-Two once again. Speaking in the first edition of Gamesauce, Miller commented, "I’m actually impressed with some of EA’s recent tries at new IP, such as Dead Space, Army of Two, and Mirror’s Edge. I hope that the lukewarm sales of these games do not cause them to stop trying to take big swings with new properties. EA really does need to broaden the number of game brands it can rely on—big hitters like a Call of Duty, Gears of War, GTA, and so on. What’s the real shame for them is that they were vigorously pushing for new brands during their recent heyday of soaring stock and untold riches. Like so many other market leaders, they rested on their laurels while Activision—doing its best Avis impersonation (“We’re #2, but we try harder”)—out-EA’ed EA."

He continued, "EA’s only chance, in my opinion, is to acquire Take-Two and add GTA, Max Payne, Duke Nukem, Bioshock, and Civilization to it’s lineup. In fact, they tried acquiring Take-Two already last year. They need to try again."

With investor Carl Icahn continuing to grow his stake in Take-Two, it's entirely possible that the publisher could be forced into a sale in the near future, and perhaps EA could try again. That said, if EA really is intent on transitioning more into digital and away from packaged goods, then buying Take-Two might not be the best investment for them.