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

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

Original Story, March 13, 2019: Earlier today, the gaming world reacted with shock to word that Sony was on the verge of closing a deal to acquire Take-Two Interactive, possibly giving the PlayStation platform first-party exclusivity on key franchises like Grand Theft Auto, Red Dead Redemption, and NBA 2K, among others.

Take-Two responded to a inquiry saying, "As a practice, we do not comment on rumors or speculation." As of this writing, Sony has not yet responded to a request for comment.

The news stemmed from a MarketWatch report on the US stock market headlined by concerns over Brexit and the impact various countries grounding the 737 Max 8 aircraft would have on manufacturer Boeing. Toward the bottom of the round-up in a list of stocks drawing particular attention was this note about Take-Two Interactive:

"Take-Two Interactive Software stock climbed 4.7% on rumors that Sony Corp. 'is in advanced board level discussions to acquire Take-Two Interactive in a mostly cash deal,' that would value the company at $130 share, according to Joel Kulina, head of technology and media trading at Wedbush Securities."

When we reached out for details, Kulina said he was confused at the sudden attention.

"This is purely unconfirmed market speculation that is making the rounds," he said. "I am not the source of this story in any regard. And not sure who quoted me as I didn't speak with anyone over the phone (unless someone saw a trading note that I wrote)."

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**"

The writers of the MarketWatch piece, Sue Chang and Chris Matthews, in turn confirmed for us that Kulina's note was the only place they had heard that rumor.

"The stock shot up at the start of trade today to lead the S&P 500 and I was simply looking for plausible explanations," Matthews said. "Joel's in a good position to know what's moving individual tech stocks, even if they are just rumors. In terms of timing, [Take-Two] stock was well up before his email went out, so it was not his dissemination of the rumor that sparked the move."

This is not to say that Sony is definitively not buying Take-Two Interactive for $130 per share, but it is perhaps to point out that the stories currently making the rounds aren't stemming from any individual actually asserting them as true. Instead, they are simply accounts of people passing along what they have heard, with no way to determine the credibility of the original claims, that such talks are in place, what level they would be taking place on, how much the offer would be per share, or how such information would have leaked.

Update, March 15, 2019: And just to draw a line under this, a Sony spokesperson has issued a statement to VentureBeat: "We do not know where this rumour is coming from, but there is no such plan."

Additional reporting by James Batchelor

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Latest comments (3)

Klaus Preisinger Freelance Writing 3 years ago
Microsoft may prefer making that Xbox money with a closed system that monetizes every aspect of development and consumption, but if Sony really threatens to marginalize the Xbox console, then the obvious nuclear solution for Microsoft is to move the Xbox away from being a pure games console and instead position it more akin to 1990ies Commodore or Atari home computers: Office, taxes, homework, games. At $400 are you going to buy an Xbox, some i3, or even Chromebox, provided they competed in the same space? Of course you would do the taxes on an Xbox and then watch some Netflix and play some Halo, who wouldn't? It is the same reason why people claimed they were not playing Nintendo DS, they were training their brains. Yeah, sure, whatever makes you sleep at night.

Sony has no real counterplay to this scenario other than promoting their platform with exclusive games and expanding on this strategy, which already worked handsomely during the PS4 era. This line of thinking will always mean that buyout rumors will have a credibility enough for a headline. Those are two obvious moves between two fierce competitors.

Back when Microsoft was stronger during the 360 era, you would never have considered Microsoft moving away from their closed system strategy. You would never have thought that one day Microsoft would forgo their own online Windows 10 store in favor of Steam, giving them a 30% cut from Halo revenue of all things. Three years ago, suggesting Xbox games were soon to be released on Nintendo, Google and Apple platforms clearly meant your source was inhabiting a padded cell and not because of VR safety. Yet here we are. The half-measures (i.e. doing something with the Xbox software some place else) are about to run out, the full measure (i.e. what to do with the hardware and its OS) looms. Whatever any rumor is suggesting Sony is doing in response, just got that gut response credibility. Sony is building a space laser to burn a giant Playstation logo into the lunar surface? Maybe not that one, but most anything else.
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Nick Parker Consultant 3 years ago
Great timing for GDC rumour mill. Funny you should say that Klaus; when I was at Sony in the 90s, we ran an internal competition for the best marketing idea for PlayStation. Mine was to project the PS logo on the moon. I even contacted NASA and the European Space agency to explore viability and costs. Unfortunately the costs to build and to transport a laser up a mountain were too prohibitive even for Sonys deep pockets.
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Strauss Zelnick is the second best corporate leader after Bob Iger; in 2008 the company had a market valuation of $800 million When EA overvalued them at $2 billion ten years later in 2018 around August the company had a market valuation of $15 billion and now at $10 billion Sony was rumoured to pay $130.00 which give them a little over $15-16 billion depending on share count now imaging another decade from now the company could have a valuation of $50 billion if esports takes over and their 50% stake in NBA becomes increasing highly valued, Rockstar release GTA 6, and through parent company Strauss Zelnick-owned ZMC owns a 6% voting share making him the largest individual (single) owner transfers it ownership of 9 Story Media which is one of the biggest kid entertainment company to Take-Two and asset like Monarch streaming technology etc. Long Live TTWO and ZMC!
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