Matt Martin
15:12 (BST)
26/02/2008
Related articles
EA could make GTA games without Rockstar - analyst
Investors concerned Houser's may quit if acquisition goes ahead
Should EA's proposed acquisition of Take-Two go ahead, Electronic Arts could make more Grand Theft Auto titles without the original Rockstar North developers, according to Wedbush Morgan's Michael Pachter.
If the original GTA team decided to quit the company, EA could still make approximately USD 150 million from the game, using the acquired technology and intellectual property.
"The game could likely be released every two years, but its success and profitability will depend upon whether the creative talent responsible for the first four versions is retained, and upon the price commanded by this talent for their contribution," commented Pachter.
"We think that ownership of the intellectual property and game engines would allow EA to make the game itself and generate around $150 million every other year without contribution from Rockstar North."
However, Pachter acknowledged that with Rockstar North on-board to develop further sequels for the industry-leading franchise, the revenue from such games would be much higher.
"With the current creative team in place, it is more likely that the game will generate closer to USD 600 million every other year," he said.
Wedbush points to a decline in EA's stock today as evidence that investors are concerned Rockstar North would not accept the acquisition, and the valued team — founded by Sam and Dan Houser — could possibly quit the company.
"We note that the decline in EAâs stock today suggests that investors are concerned about whether the Rockstar North team will remain after a change in control, and we believe that similar concerns will be raised among prospective purchasers contemplating a fight with EA."
Wedbush Morgan believes that if Take-Two shareholders don't accept the USD 26 per share offer currently on the table, Electronic Arts is likely to withdraw its offer and walk away from the deal. Nor does it expect a third party to step make a bid for Take-Two.
As Rockstar's contract with Take-Two ends in February 2009, Pachter suggests that should the EA/Take-Two deal fall through, there would likely be a bidding war for the services of Rockstar next year, to develop a rival to the Grand Theft Auto franchise.
Pachter pointed to Activision picking up Medal of Honor developers Infinity Ward and Spark Unlimited and putting them to work on the Call of Duty franchise, as an example of successful poaching of talent.
To comment on this article, or view other users comments, you need to register for the GamesIndustry.biz Network.
