Take Two’s stock today saw a dramatic increase following the note. Hickey noted that there’s an “emerging romance” between Activision and Take-Two recently. Apparently, Take-Two and Activision are interested on making a movie studio together based upon their popular game series.
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“For Activision, acquiring Take-Two Interactive would be a no-brainer, in our view, circling some of the strongest development talent and owned IP in the world, within a company that has nearly $1 billion in cash and trades at a comparably lower multiple,” Hickey said.
Take-Two admires Activision’s “deep connections to Hollywood” and its capabilities in making massively multiplayer online games, such as “World of Warcraft” and “Diablo.”
The two publishers could become a gaming giant, and could help Activision enter the movie industry with some of Take Two’s series. Another big thing that would come out of a possible acquisition is that Activision would become the owner of some of the biggest developers in the world. Currently, Activision has the Call of Duty team under it’s roof, and Bungie. With this possible acquisition, Activision would then own Rockstar Games as well.
“With the acquisition of Take-Two Interactive, Activision would have arguably the three strongest development studios in the world with Rockstar Games, Bungie and Blizzard,” Hickey said.
Previously, EA made a bid for Take-Two, but Take-Two turned them down. Activision would have to have a strong proposal to Take Two on an take over matter.
The investor also noted that Activision could use Take Two titles to balance out their “annualization” of franchises.
“The opportunity for Activision to intelligently layer future releases from Rockstar, Bungie and Blizzard, could in-part enable Activision to annualize future performance from what today is arguably a less linear performance profile.”
“We would also note that Activision’s mega performance foundation with World of Warcraft is trapped within a life cycle decline, their Skylanders franchise will face considerable pressure from Disney and Call of Duty is vulnerable to franchise fatigue from consistent annual iterations. Therefore, acquiring GTA, Red Dead, Borderlands (now owned, partnership deal that would likely transfer…), NBA 2K, BioShock… etc. Along with the potential performance opportunity from a new MMO and movie adoption of GTA from Rockstar Games… Acquiring Take-Two Interactive would seem like a very smart move for Activision.”
All of this is just a rumor for right now, and nothing official has been stated.
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Related Forum: Grand Theft Auto Forum
Source: http://www.charlieintel.com/2014/08/29/rumor-activision-interested-in-acquiring-take-two-interactive/
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