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Timeline to Acquisition

We chronicle the events that led to EA's $2 billion acquisition offer for Take-Two

As Electronic Arts reveals its intention to acquire Take-Two Interactive, looks back at some of the key developments for both companies over the past twelve months.

February 27, 2007

John Riccitiello, former president of Electronic Arts, leaves his position at VG Holdings and returns to the publisher after almost three years, calling the position of chief executive officer at EA his "dream job".

As Riccitiello departs VG Holdings, Greg Richardson takes the CEO position at VG Holdings, overseeing its videogame business which includes super-developers BioWare and Pandemic. Richardson has previously held senior management positions at EA Partners.

March 30, 2007

Take Two shareholders finally kick out the board of directors after months of disappointing management, court battles and financial problems. CEO Paul Eibeler and executives Oliver Grace, Robert Flug and Mark Lewis are all removed from their positions. In their place comes the executive team from Zelnick Media, which includes Strauss Zelnick, who brings videogame experience from his time with Crystal Dynamics, BMG Entertainment, and 20th Century Fox, Time-Life and Columbia Music of Japan.

April 3, 2007

Zelnick begins to outline changes for Take-Two, with financial restructuring a top priority, along with better management of its games portfolio. The acting chairman also acknowledges that the company needs to address morale issues but warns that there may be redundancies if necessary as, ârunning a lean corporate operation will help shareholders.â

April 11, 2007

Zelnick and acting CEO Ben Feder outline a 100-day plan to revitalise the company. The focus on quality sees the company put in place a stringent green light process for products, as well as more dedication to Nintendo formats, an area that Take-Two has neglected in the past. Although talk of finding a buyer for Take-Two had surfaced in the past, management seems to suggest any possible sale has been put on hold.

June 19, 2007

Riccitiello makes his presence felt by announcing plans to split and restructure Electronic Arts into four distinct divisions — EA Sports, EA Casual, EA Games and The Sims. The plan "streamlines decision-making, increases speed to market, enhances accountability and allows us to be more experimental," according to Frank Gibeau, head of EA Games. The four labels are supported by two new groups — Central Development Services and Global Publishing.

August 02, 2007

Take-Two announces that the latest title in its flagship franchise, Grand Theft Auto, will miss its intended release month of October, and not be released until fiscal 2008. Although CEO Ben Feder describes the delay as "disappointing", he states the move does not compromise Take-Two financially. Analysts agree that Activision and Electronic Arts will benefit the most from the delay during the coming Christmas period.

October 11, 2007

Electronic Arts announces the acquisition of VG Holdings, the owner of Bioware and Pandemic Studios, for an estimated USD 860 million. "These are two of the most respected studios in the industry and I'm glad to be working with them again," comments Riccitiello. The two studios become part of the EA Games label, currently run by Frank Gibeau.

November 11, 2007

During the Reuters Media Summit, Riccitiello says that he believes that the majority of acquisitions and mergers are in the past, as the videogame business begins to take advantage of emerging models such as micro transactions and in-game advertising. âIs it ripe (for mergers), or has it already been picked? I would say it's been largely picked,â he says.

December 02, 2007

Activision and Vivendi Games announce a merger, in a move that they claim will make them the world's largest videogame publisher. The company, Activision Blizzard, now holds a portfolio that includes World of Warcraft, Guitar Hero, Spider-Man, Call of Duty, Spyro, Crash Bandicoot and Tony Hawk's games. The move is a real surprise to the industry, with many expecting Electronic Arts to make a move in retaliation and reclaim its position of number one publisher.

December, 2007

It's later revealed that Electronic Arts begins formal talks with Take-Two in December about a possible acquisition.

December 03, 2007

Take-Two's Ben Feder concedes that consolidation is inevitable in the games industry, "Videogame development is not getting any cheaper," he says. "It's a capital-intensive business, and I don't see that going away. That will drive some of the smaller competitors out," he adds.

December 11, 2007.

Analysts begin to see a light at the end of the tunnel for Take-Two, with good recommendations boosting company shares. It's mainly down to the anticipated release of Grand Theft Auto IV, which at this point still does not have a set release date. "Take-Two is one of the few companies that has a very significant game coming out...investors will see it continue to do well on a relative basis," says Pacific Crest Securities' Evan Wilson.

December 19, 2007

Although sales are down for the full year, losses also fall from USD 184.9 million to USD 138.4 million, with Zelnick pointing to the improvement as a sign the company's 100-day plan is working. The newly released BioShock and Wii title Carnival Games are singled out as strong performers, demonstrating to shareholders that Take-Two doesn't have to rely on the GTA franchise for critical and commercial success.

January 24, 2008.

After months of guessing and speculation, Grand Theft Auto IV is given a release date of April 29, 2008. Significantly, the date is just within Take-Two's end of financial year.

February 08, 2008

During the DICE Summit, Riccitiello outlines some of EA's past studio failures and successes. He also highlights the four label approach, as "more like the NFL with a collection of teams, each with its own culture, each with an independent drive, each individually seeking to win the Super Bowl." He also said that the old "command and conquer" business model no longer works, and that not empowering internal studios to forge and maintain their own unique identities is a mistake.

February 6, 2008

Electronic Arts makes a formal proposal to acquire Take-Two Interactive for USD 2 billion, with a second proposal submitted on February 19.

February 24, 2008

Electronic Arts reveals it has officially made a move for Take-Two, releasing details of the deal and a letter from Riccitiello to Zelnick. The publisher says it wants all shareholders to be aware of the deal, following the Take-Two board dismissing the offer.

February 24, 2008

EA details reasons why it believes the time is right to acquire Take-Two. As well as reiterating that studios within the group will be allowed to maintain their own identity, it also professes admiration for Rockstar Games, Take-Two's internal Grand Theft Auto developers.

February 24, 2008

The board of directors at Take-Two confirms that it has rejected the acquisition offer calling it "inadequate" and "opportunistic", hoping to take advantage of the forthcoming release of Grand Theft Auto IV. However, the company says it is willing to discuss this further with Electronic Arts, immediately following the release of GTA IV at the end of April.

The following is a collection of links to all of the coverage of this story so far:

EA will succeed

Screen Digest analyst Ed Barton says that the premium and importance of scaling indicate EA's Take-Two bid will win out.

Houser inspired new EA structure

EA has held up Rockstar as one of the models for its label organisation.

Riccitiello pulled plug on prior deal

Transaction would have gone forward last April, but EA structure wasn't ready.

Synergies will benefit Take-Two

EA thinks it can help the company sell more games.

EA waited until GTA IV was complete

Says it wanted to ensure that proposal did not disrupt development.

Take-Two willing to negotiate

Calls EA's offer opportunistic and insufficient.

Sports games may justify purchase

Analyst Michael Pachter thinks eliminating competition in the sports genre is impetus for EA's offer.

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Matt Martin avatar
Matt Martin: Matt Martin joined GamesIndustry in 2006 and was made editor of the site in 2008. With over ten years experience in journalism, he has written for multiple trade, consumer, contract and business-to-business publications in the games, retail and technology sectors.
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