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Take Two CEO on EA: 'I Don't Engage in Regrets'
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While it owns one of the most successful franchises in gaming, Take Two Interactive Software has taken its share of hits over the past year.
After rejecting an unsolicited takeover offer from Electronic Arts [ERTS
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], the company has seen its share price fall more 50 percent. It’s often viewed as a one-trick pony, overly reliant on its "Grand Theft Auto" franchise. And the last two games bearing the "GTA" name haven't been the blockbusters of their predecessors.
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Source: Take Two Interactive Software Strauss Zelnick |
As if that weren’t enough, the company is suing a former development partner, 3D Realms, over the collapse of a long-in-development game. And that partner is arguing its case directly to the gaming hard core.
Still, Take Two [TTWO
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] CEO Strauss Zelnick remains upbeat.
While media and analysts still question the company’s refusal of EA’s 2008 $2 billion offer, Zelnick stands by the decision, saying it was the best one for the company and its shareholders.
"I don’t engage in regrets," he says. "To this day, I don’t know what [EA] was up to. Everyone knew they couldn’t have been unmindful of the fact that their initial offer couldn’t have been a final offer… It’s hard to imagine what we could have done better. My job is to ensure value for the shareholders."
After the offer (and talks with other potential suitors), Take Two underwent a strategic process to determine whether it should sell the company. Ultimately, it decided to remain independent, though Zelnick now says “if something comes up we will consider it.”
Rejecting EA’s bid took a heavy toll on Take Two’s stock, and the recession hasn’t helped. Shares were at $17 before the offer and climbed as high as $27.65 after it was made. Today, the company trades in the $8-$9 range.
Zelnick concedes the stock is lower than he’d like, but points most of the blame at the economy.
"We can’t be unmindful of the fact that the market was 13,000 and the market is now 8,800," he says. "We’re a market participant and there’s no one who is holding stock now that hasn't been affected. We take responsibility for what we do— good, bad or indifferent—but we can’t take responsibility for the market."
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