Layoffs Hit Two 2K Czech Studios

September 1, 2011 -

2K Czech has laid off more than 40 staff, according to a Develop report. The layoffs occurred at two studios operating under the 2K Czech brand. One group, based in Brno, has lost up to 40 developers, sources inside the company have told Develop. The other studio in Prague has laid off around 10 employees, according to insiders. Both studios employ around 200.

2K Games tells Develop that the layoffs do not mean that the company is changing the focus of the 2K Czech studio.

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Take-Two Wants to Use Social Gaming to 'Build Bridges' to AAA Franchises

July 22, 2011 -

Is the Grand Theft Auto franchise heading to Facebook and other social networks? Probably at some point, along with Take-Two's other high profile franchises, but at this point the company is dipping its toes into the waters. Speaking to IndustryGamers, Take-Two COO Karl Slatoff says that the recent launch of Civilization World on Facebook is the beginning of a larger strategy that will ultimately see social and traditional game spaces converging ever so slightly.

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2K Games President Inserts Foot In Mouth

July 13, 2011 -

A new interview with 2K President Christoph Hartmann over on MCV makes the top executive at the Take-Two label look a little foolish - not that it's MCV's fault. In that interview Hartmann degrades strategy games and Ray Charles among other things. His comments come about as part of a discussion on X-Com, the popular strategy games series that the company is reimagining as a strategy-themed shooter. Here's the first quote, about 90's strategy games:

"The ‘90s generation of gamers all love Xcom and we own the IP, so we thought OK, what do we do with it? Every studio we had wanted to do it and each one had its own spin on it. But the problem was that turn-based strategy games were no longer the hottest thing on planet Earth. But this is not just a commercial thing – strategy games are just not contemporary."

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No Shortage of Opinions on Brown v. EMA Decision

June 30, 2011 -

Hey GPers!  Up for some opinions on the recent Supreme Court decision that gave Leland Yee’s violent video game law the Kuribo Boot?

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L.A. Noire Banned in UAE

May 21, 2011 -

United Arab Emirates retail chain Geekay Games updated its Facebook page today with sad, if unsurprising news:

Unfortunate news, L.A. Noire has been banned. Sorry guys :(

Bummer.  The UAE’s National Media Council (NMC) did not reveal why it banned the game and so far, Rockstar has not commented on the situation.

Speculation has it that The Witcher 2 and Duke Nukem Forever will be the next titles to receive a wallop from the NMC banhammer.

Source: Middle East Gamers via Cheater87

-Reporting from San Diego, GamePolitics Contributing Editor Andrew Eisen

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Cypress Hill Singer Sues Rockstar/Take-Two Over 6-Year-Old Game

December 15, 2010 -

Would you believe yet another musician is suing a game developer/publisher?

Joining the ranks of No Doubt, Courtney Love and most recently, Axl Rose, Michael “Shagg” Washington, backup singer of rap group Cypress Hill, has filed suit against Rockstar Games and Take-Two.  He alleges that the main character of Grand Theft Auto: San Andreas was created using his image and life story.

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Take-Two Chairman Talks Digital Distribution, MLB License

December 2, 2010 -

Take-Two chairman Strauss Zelnick does not see a future where digital distribution surpasses big box retail. Speaking to Reuters the chairman and soon-to-be-CEO of the company said that the biggest opportunities for his company would continue to be at traditional retail. He also argued that the transition to digital distribution based on share would be gradual - growing from the current 10 percent share of the market to 25 - 30 "over time."

"I still think in five years the packaged goods business will dominate. It's kind of irrelevant to us, Zelnick told Reuters. "..basically the same gross margin, basically the same risk."

"We don't have any structural impediment to being profitable in a given year," he said.

He also told Reuters that his company is no longer so dependant on the Grand Theft Auto series as its only source of income.

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Take-Two Shuffles Upper Management

November 2, 2010 -

While we wait with bated breath for Pete’s Supreme Court coverage, let’s hop in the wayback machine and revisit the good times of GP’s early days.

Remember, years ago, when GamePolitics was all over any news concerning GTA series publisher Take-Two’s upper management.  Yes, if Paul Eibeler or Strauss Zelnick so much as blew their noses, boy howdy, we were there to report it.

Well, some of you may be interested to know that Take-Two Executive Chairman Strauss Zelnick will be adding the role of Chief Executive Officer to his resume as current CEO Ben Feder will be stepping down on January 1, 2011.  Said Feder:

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Mafia 2 Producer Apologies for Gay Space Marine Comment

September 23, 2010 -

While being interviewed by MTV’s Multiplayer blog last week, Mafia 2 Senior Producer Denby Grace was asked what he felt was the biggest problem current games suffer from. His answer was, “An obsession with gay space marines.”

This comment did nothing to endear Grace or 2K Games to a GayGamer columnist, operating under the moniker Wootini, who wrote about the comment:

I wasn't planning on buying Mafia 2, mostly because I'm over that whole sandbox crime drama genre, and also because I was more than underwhelmed when I demoed it at Pax East back in March. But now I wouldn't play it if you gave me a free copy. Why do people think talking like this is okay? What is wrong with people?

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No Mafia II for UAE

September 7, 2010 -

The United Arab Emirates’ National Media Council has banned the release of Take-Two Interactive’s Mafia II videogame in that country.

Nitin Mathew, of the Dubai-based distribution firm Red Entertainment Distribution, told Arabian Business that the game was banned because of its “excessive violence and nudity.”

Mafia II was going to be released at the end of August, but now it will share the same fate as its predecessor Mafia, which was also banished from the UAE. Other recent games outlawed in the UAE include Heavy Rain, Dante’s Inferno (which wasn’t even submitted to censors), Darksiders, God of War and Grand Theft Auto IV.

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Take-Two Loses BioShock Domain Name Fight

August 25, 2010 -

Take-Two Interactive fought the good fight but failed to prevail in a lawsuit against a company that specializes in domain squatting - the practice of buying up and sitting on domains for potentially popular products. A company called NA Media grabbed the domain name in early 2004 after word slipped out that BioShock was in the works at Irrational Games. Unfortunately for Take-Two, the company hadn't trademarked "BioShock" before NA Media registered "www.bioshock.com."

That had a profound impact on Take-Two's court case, according to Gamer/Law, which reported today that the company had lost in court. The simple fact that Take-Two hadn't managed to register the trademarks at the time of the URL's registration really weakened the publisher's case, but Name Administration also argued in court that Bioshock had other meanings separate from Take-Two's business - even citing interest from Johnson & Johnson to use it for some odd line of skincare products.

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Italian American Group Slams Mafia II

August 18, 2010 -

Italian American organization UNICO National is not happy with Take-Two Interactive (or rather, Illusion Softworks') portrayal of Italians in Mafia II, according to Gamasutra. Although UNICO president Andre DiMino hasn't actually played the game (it comes out August 24) he still finds the game's portrayal of Italian Americans reprehensible, calling it a "pile of racist nonsense."

DiMino apparently wrote a strongly worded letter to Take-Two chairman Strauss Zelnick asking for a meeting and informing him that he found offensive the way Mafia II delivers a "denigrating stereotype of organized crime being the exclusive domain of Italians and Italian-Americans." Of course, as I mentioned earlier, he hasn't actually played the game.

Here's a bit more from DiMino:

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Take-Two, Apogee Settle Duke Suit

June 15, 2010 -

Take-Two Interactive and Apogee Software have dismissed lawsuits against each other over the long in development Duke Nukem Forever.

Attorneys for Apogee signed the document on May 18 of this year (thanks ShackNews), while Take-Two’s law firm affixed its signature on May 28. The document stipulates that plaintiff Take-Two, counterclaim-defendant 2K Games and counterclaim plaintiff Apogee agreed to dismiss with prejudice all claims within per a May 14, 2010 agreement. Each party will pay for its own costs of the litigation.

The lawsuits erupted following developer 3D Realms letting go its staff in May of 2009, which Take-Two took as indicating that the game they had partially funded since 1998 was no longer in development. The 3D Realms and Apogee countersuit claimed that, despite a full roster of employees, the game was still in the works.

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Judge: Lawsuit Against ex-Take2 Execs Can Move Forward

April 1, 2010 -

A lawsuit that alleges ex-executives of Take-Two Interactive Software illegally backdated stock options has been given the go-ahead to continue by a Manhattan federal judge.

Originally brought by Take-Two shareholders, Reuters reports that the suit targets former CEOs Ryan Brant and Kelly Sumner, along with ex-CFOs Larry Muller and James David with securities fraud based on options awarded after July 12, 2001. While U.S. District Judge Laura Taylor Swain did dismiss an undetermined amount of claims because of their age, she ruled that it was inappropriate to dismiss the post-July 2001 claims because it was “far from clear” if they were brought too late.

The process of backdating stock options was described as involving “retroactive grants of stock options as of dates when stock prices are low, making the options more valuable.”

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One Solution for DRM-Free Games: Wait

March 16, 2010 -

As DRM technology becomes more invasive, an article on CNET takes a look at the methods used and offers some possible suggestions for DRM-free gaming.

The reaction to Ubisoft’s DRM, which requires a constant Internet connection, has been well documented, with a reverse boycott organized and hackers taking down the publisher’s authentication servers twice. The new Electronic Arts release Command & Conquer 4, despite employee claims that the game “has NO DRM. Zip, zero, zilch, none,” also requires an Internet connection to play, which has already resulted in a thread full of complaints on the C&C forums.

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BioShock 2 to Feature SecuROM DRM

January 22, 2010 -

2K Games announced this week that BioShock 2 will be available for pre-order on Steam, and that the game would be protected by SecuROM DRM software, much to the dismay of gamers who had negative SecuROM experiences with the first BioShock (which launched with an activation limit). 

In response to the uproar, 2K Community Manager Elizabeth Tobey responded on the 2K Forums with the following clarification:

BioShock 2 is using a standard Games for Windows Live activation system, much like other games you have played in the past. That doesn't mean you always have to be online to play or save the game - you can create an offline profile for the Single Player portion of the game (you just won't earn achievements and you can't play Multiplayer, of course.)

We are using SecuROM only as a disc check method for the retail copy of BioShock 2. That is it's only use.

Tobey later confirmed that SecuROM will only be used as a disc check but that activation will be done through Games for Windows Live—a revelation that may have PC gamers groaning given GFWL's less than stellar reputation.  Furthermore, GFWL will place restrictions on your ability to save without creating a profile, and will require online activation even for single-player mode.

While the BioShock 2 DRM scheme appears to be less restrictive than the DRM included with the launch version of the original BioShock, players will still have to contend with Games for Windows Live which has had a checkered history in games like Dawn of War 2, Fallout 3 and Grand Theft Auto IV.

In September 2008, EA was slapped with a class-action lawsuit over their use of SecuROM in Spore, but such a lawsuit is unlikely for 2K Games given the limited role they claim that SecuROM will have.


Dan Rosenthal is a legal analyst for the games industry.

42 comments

Take-Two Board Shake Up at Behest of Icahn

January 21, 2010 -

Investor Carl Icahn, who now owns over 11.0 percent of Take-Two, has triggered a shakeup of the publisher’s board.

Directors Ben Feder, Grover Brown and John Levy will not stand for re-election to the board, though Feder will retain his position as CEO reports GamesIndustry.biz. Icahn has nominated a trio of new personnel to ascend to the board—SungHwan Cho, Brett Icahn (Carl’s son) and James Nelson.

Icahn has agreed to back Take-Two’s five nominees for the board. Additionally, if his three nominees are elected and his ownership in the publisher drops below 5.0 percent, the” Icahn three” will resign their positions.

Analyst Michael Pachter called the board reshuffling a good move:

It is healthy to have an all-outside board of directors. Replacing the others with three selected by Icahn should provide a level of healthy scepticism about business as usual, and should serve to help the company make better decisions.

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Icahn Grabs Bigger Stake in Take-Two

December 21, 2009 -

Billionaire financier Carl Icahn has increased his stake in Take-Two Interactive to 11.3 percent, up from 2.5 percent, according to a filing with the SEC.

Icahn, known for his shrewd business moves, has always had an interest in videogame companies, and this latest purchase has analysts specualting on the future of Take-Two and why Icahn purchased his stake at this particular time. His purchase of 5.9 million shares and more than 783,000 options makes him the company's second largest shareholder.

Earlier this year, Take-Two spurned a $25.74-a-share acquisition offer from Electronic Arts. Now, with Icahn more involved, analysts think something is imminent with Icahn looking to cash in on undervalued shares. With the announcement of Icahn's purchase, Take-Two shares jumped more than 9 percent on Friday to close at $9.01.

According to a Reuters story, analyst Michael Pachter, who montiors the industry for Wedbush Morgan, said that Icahn may force a sale of Take-Two:

"I don't think as an activist he wants to run a company, I think it's much more logical that he would sell the company," Pachter said.

Pachter also said that Icahn has a history with Take-Two chairman Strauss Zelnick, whom Icahn nominated to the board of Blockbuster in 2005.

Another scenario, according to analyst Mike Hickey of Janco Partners, is to sell off parts of the company, such as 2K Sports:

"There's the opportunity to unlock some significant value, they could look at the pieces of the business," Hickey said.

It will be interesting to see what Icahn has planned for the company and how it impacts some of the company's most reconizable franchises, such as Grand Theft Auto and BioShock.

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AO-Rated Manhunt 2 Gunning for PCs

November 2, 2009 -

Rockstar Games’ controversial Manhunt 2 is being released for the PC this week in an uncensored version that carries an Adults Only (AO) rating from the Entertainment Software Ratings Board (ESRB).

Originally released in 2007 for the Wii and PlayStation 2 platforms, the title drew fire over its content and a perception that using the Wii’s motion controls to enact virtual violence could carry over to real-world violence, despite evidence that eventually emerged to the contrary.

The BigDownload notes that Manhunt 2 will be offered via the digital delivery system of Direct2Drive for $29.95. Purchases are limited to those who live in the U.S., Canada and Mexico.  While Valve offers a full Rockstar Games collection through its Steam service, no mention of the pending availability of an AO-rated Manhunt 2 game can be found anywhere on their site or within Steam.

The ESRB content descriptor for the game states: “Blood and Gore, Intense Violence, Strong Language, Strong Sexual Content, Use of Drugs.”

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Reheating Hot Coffee: Take-Two Reaches $20M Settlement with Investors

September 2, 2009 -

Take-Two Interactive announced yesterday that it has reached a $20 million settlement in a class-action lawsuit filed over the 2005 Hot Coffee scandal.

Although T2's press release is regrettably light on details, securities are mentioned, indicating that  this case is related to loss of equity value caused by Hot Coffee and its fallout.

Venture Beat has dug up a link to the complaint, Feninger vs. Take-Two. Kotaku offers an explanation of the details:

The nut of the allegations contained in the 34-page suit, is that Take-Two was spending more than it was bringing in and couldn't survive until the next Grand Theft Auto. So, the suit alleges, the company pushed Grand Theft Auto: San Andreas out the door knowing that there was pornographic material in the game because delays would have cost the company too much. If the material was known to be in the, the suit continues, major retailers wouldn't have sold it.

The outcome, according to the suit, was inflated stock prices based on bad or uninformed information from the company and a plunge in stock values when the truth came out.

The suit also alleges that Take-Two lied about the included sex scenes, nicknamed Hot Coffee, when they first came to light, with the company the scenes were "the work of a determined group of hackers who have gone to significant trouble to alter scenes.'"

GP: We should point out that, as the record shows, the notion that Take-Two lied about the origin of the Hot Coffee scenes is a fact, not merely an allegation. In one the sleaziest moves ever seen in the game biz, Take-Two tried to pin the rap for the hidden sex scenes on its biggest fans, the GTA mod community. To be fair, there was a different management team in place back then.

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PC Version of Manhunt 2 May Carry an AO Rating, But How Will It Get Sold?

August 26, 2009 -

As noted by Joystiq, the ESRB is currently listing the upcoming PC version of Manhunt 2 with an Adults Only (AO) rating.

GamePolitics readers will likely recall that the console versions of Manhunt 2 generated a major controversy in the summer of 2007 when the game was banned in Britain and tagged with an AO here in the States. Rockstar subsequently released a toned-down version that earned an M (17+) rating for the U.S. market.

That was a critical milestone, because the Big Three console makers won't license AO-rated games for their systems, which makes it tough for a publisher to earn a return on its investment. That's why you don't see any AO-rated console games. While the open architecture of the PC negates licensing concerns, an AO-rated Manhunt 2 would still get thumbs-down from major retailers like GameStop and Wal-Mart.

That means that Rockstar is either planning a digital distribution campaign for Manhunt 2 or that it will edit the PC version - as it did with the console editions - to earn an M from the ESRB. Of course, there is a third scenario: Rockstar could ship an M-rated version to retailers while distributing an AO-rated version online.

We wonder how Valve might react to handling an AO game if its Steam service, which currently distributes Rockstar's GTA IV online, is under consideration as a potential digital distribution source for Manhunt 2.

Take-Two's Zelnick Eyeing Business Week Purchase

August 21, 2009 -

BusinessWeek is up for grabs and Take-Two Interactive boss Strauss Zelnick (left) is reportedly among those interested in acquiring the venerable McGraw-Hill publication.

Describing Zelnick's company, ZelnickMedia as "a private equity firm that’s long sought out distressed media assets for turnaround," BusinessWeek itself reports that there are nine potential buyers for the 80-year old mag.

Along with Take-Two, Zelnick's firm also owns Columbia Music Entertainment and an infomercial company, Cannella Response Television.

2 comments

SouthPeak Proud to Have Former "Worst CEO of Year" Join Its Board of Directors

August 4, 2009 -

Video game publisher SouthPeak Interactive announced late yesterday that former Take-Two CEO Paul Eibeler (left) is joining its board of directors.

Judging from the language of its press release, SouthPeak appears to regard the addition of Eibeler, named Worst CEO of 2005 by MarketWatch, as good news:

“As one of the most respected executives in the interactive games industry, we welcome Paul to the Board of Directors,” said Terry Phillips, Chairman of SouthPeak. “His depth of experience will certainly be an asset to SouthPeak growth as a major publisher.”

Paul Eibeler is best known for his leadership at Take-Two Interactive...

Eibeler is indeed best known for his days at Take-Two. It was under his watch that the Hot Coffee scandal rocked the video game industry, with the Grand Theft Auto publisher inexcusably blaming the now well-known sex scenes on the GTA mod community before ultimately 'fessing up that it was original content.

Eibeler's reign was also plagued by securities investigations which led to charges against several past employees (although not against Eibeler). The former CEO was ousted by a 2007 shareholder revolt led by current T2 chairman Strauss Zelnick. Eibeler exited with a $2.5 million golden parachute.

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ESA Sues Chicago Transit Authority over Ban on M-Rated Game Ads

July 22, 2009 -

The Entertainment Software Association has filed a federal lawsuit against the Chicago Transit Authority, challenging a 2009 CTA ordinance which prohibits ads for games rated M (17+) or AO (18+) from appearing on its vehicles and facilities. 

GamePolitics readers may recall that in April, 2008 the CTA ordered ads for Grand Theft Auto IV removed from buses even before the game was released. The CTA action followed local news coverage of a rash of shootings in Chicago.

Shortly thereafter, GTA IV publisher Take-Two Interactive sued the CTA, charging that the agency had broken a $300,000 contract for the campaign. The parties settled the case later in 2008, with the CTA granting T2 a six-week GTA IV ad run. However, CTA officials moved to block future ads for M-rated games by passing the new ordinance, which took effect on January 1st and prompted today's legal action by the ESA.

ESA boss Mike Gallagher commented on the lawsuit in a press release: 

The CTA’s ordinance constitutes a clear violation of the constitutional rights of the entertainment software industry. Courts across the United States, including those in the CTA’s own backyard, have ruled consistently that video games are entitled to the same First Amendment protections as other forms of entertainment. The CTA appears unwilling to recognize this established fact, and has shown a remarkable ignorance of the dynamism, creativity and expressive nature of computer and video games. The ESA will not sit idly by when the creative freedoms of our industry are threatened.

The press release also explains some of the legal rationale behind the suit:

The ESA’s suit contends this new ordinance unconstitutionally “restricts speech in a public forum that is otherwise open to all speakers without a compelling interest for doing so.” In addition, the Complaint argues that the ordinance impermissibly discriminates on the basis of viewpoint and ignores less restrictive means of achieving the supposed ends of the ordinance.  

The ESA also stated that the CTA’s ordinance is unnecessary because game-related marketing is already subject to the Entertainment Software Rating Board’s Advertising Review Council (ARC), which strictly regulates computer and video game advertisements that are seen by the general public.  The Entertainment Software Rating Board (ESRB) assigns content ratings to computer and video games, which, in turn, are displayed on the advertisements for those games.

As GamePolitics has reported, the Massachusetts Bay Transit Authority has a similar ban on M-rated game ads, likening them to X-rated movies. It is unclear at this time whether the ESA will pursue a similar action against the MBTA.

While the lawsuit also encompasses AO-rated games, as a practical matter, such titles are virtually non-existent in the U.S. market.

DOCUMENT DUMP: Grab a copy of the lawsuit here (70-page PDF)...

Investment Blog Bashes Take-Two Boss Zelnick

July 21, 2009 -

Take-Two chairman Strauss Zelnick has absorbed something of a beatdown from investor-oriented website Market Rap.

In an article titled No Regrets, No Responsibility, Zelnick is taken to task for what Market Rap writer Perry Rod views as a string of leadership failures on his part. Most egregious among these would appear to be Zelnick's spurning EA's $25.74 per share acquisition bid in 2008. Take-Two stock (TTWO) currently trades at 8.58 and has dipped under 6 during the current recession. Rod writes:

If you’re keeping score, in a two year period, Mr Zelnick managed to, on three occasions, make vital statements that were within a matter of weeks proven to be either fabricated or just incredibly incompetent (or worse).  Mr. Zelnick managed to resist and reject a buyout offer that was triple the company’s current share price while claiming other interested parties who never emerged.  And Mr. Zelnick, meanwhile, tripled his management company’s compensation for these efforts...

These statements and others strongly suggest that investors should proceed with extreme caution with any investment that involves Strauss Zelnick.  His performance so far as an executive manager of a publicly traded company  is one of the worst I have ever seen in my professional investment experience.

The Market Rap piece is not the first time Zelnick has come in for harsh criticism from the investment crowd. Last October Mad Money host Jim Cramer added Zelnick to his Wall of Shame.

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Pachter: Economist's Claims in Madden Monopoly Case Irresponsible

July 15, 2009 -

Yesterday's GamePolitics report detailing a University of Michigan economist's estimate that EA's exclusive NFL deal cost Madden buyers as much as $926 million raised a number of eyebrows, including those attached to the forehead of Michael Pachter (left).

In an e-mail exchange with GamePolitics, the Wedbush-Morgan analyst scoffed at the monopoly theory offered by Dr. Jeffrey MacKie-Mason in a filing last week with the U.S. District Court in San Francisco. MacKie-Mason was hired as an expert witness for the plaintiffs in a class-action suit filed in 2008 by a pair of gamers who allege that EA exploited its exclusive NFL deal to jack up the price of its popular Madden series.

Here's what Pachter had to say:

What kind of fool is this U of Michigan economics professor? ...Madden (according to NPD) sold 23 million units in 2006 - 2009, not the 30 million that Dr. MacKie-Mason claims... The total retail sales were $1.034 billion, meaning that EA's cut was around $800 million (retail margin is 20%).  How in the world does [MacKie-Mason] conclude that EA overcharged by more than they generated?

For the four year period, EA's average retail price was $44. For the period 1995 - 2005 (when either Sega or Take-Two provided [NFL 2K series] competition), EA generated $1.548 billion of sales on 36 million units, for an average price of $43. In other words, WITH competition, the price was $43, and WITHOUT competition, the price was $44.18...

I rarely read anything that gets me so incensed... They may have some odd estimates I'm not aware of, but based on what you printed, they should be embarrassed. You can quote me.

Here's more: Take-Two discounted [NFL 2K5] to $19.99 to gain market share, and lost their butts in the process. It's the same as a dollar menu at McDonald's that is a loss leader in order to gain share, and McDonald's hopes people buy the high-margin soft drink. There is no "right" among consumers to receive a perpetual discount just because one retailer decides to discount below cost... 

It strikes me as irresponsible that the professor would focus on the NFL exclusive as if there is some god-given right for consumers to have all intellectual property available for exploitation by any business that chooses to do so in the name of competition... 

The ONLY I/P that has ever been licensed to multiple video game parties is team sports.  The NFL, Major League Baseball, FIFA, and NCAA Basketball have all chosen to go the exclusive route for games, similar to the contracts for all movie-based games.

GP: As GamePolitics reported yesterday, MacKie-Mason acknowledges that his analysis is based on incomplete data. In a response filing, attorneys for EA (who were similarly contemptuous of MacKie-Mason's theory) agreed to furnish available documentation dating back to 2001.

Economist: EA's Madden Monopoly Cost Gamers Up To $926 Million

July 14, 2009 -

A University of Michigan economics professor estimates that Electronic Arts collectively overcharged Madden buyers between $701 million and $926 million during the years 2006 through 2009.

Dr. Jeffrey MacKie-Mason made his claim in a document filed last week with the U.S. District Court in San Francisco. Mackie-Mason was brought into the case as an expert witness by attorneys representing Geoffrey Pecover and Jeffrey Lawrence. The pair of gamers are named plaintiffs in a class-action suit alleging that EA used its exclusive licensing deal with the NFL to eliminate Take Two Interactive's competing NFL 2K series. The suit charges that EA then exploited the resulting competitive vacuum to dramatically raise the retail price of Madden.

While MacKie-Mason acknowledges that his estimates are based on incomplete data, he writes:

I provide this information for the limited purpose of allowing the Court to assess in rough terms the burden on Electronic Arts in relation to the magnitude of potential damages... Under California's antitrust statute, it is my understanding that these damages would be trebled.

MacKie-Mason arrived at the eye-popping figures using an estimated overcharge percentage that ranged from 50% to 66% for the 30.04 million units of Madden sold during the 2006-2009. He writes:

When Take-Two was able to compete unhindered, Madden NFL's competitive price was in the range of $19.95 to $29.95. I assume for this exercise that these would have been Madden's prices but for the alleged [monopolistic] acts.

Based on Mackie-Mason's estimate, attorneys for the plaintiffs have requested additional data for Madden sales going back to 2001. In a response, attorneys for EA agreed to supply as many of the requested documents as they could locate, but were unsparing in their assessment of Mackie-Mason's analysis:

EA respectfully submits that Dr. MacKie-Mason's analysis is fundamentally flawed on multiple levels. Indeed, Dr. MacKie-Mason's estimated magnitude of damages is nothing more than pure fiction - it has no basis in fact or law...

As GamePolitics reported last month, U.S. District Court Judge Vaughn Walker ruled that the plaintiffs' monopoly suit could go forward, but limited the scope of the case to claims arising in California and Washington, D.C. where Pecover and Lawrence reside.

DOCUMENT DUMP: Read Dr. MacKie-Mason's estimate here... Read EA's response here...

T2 CEO: Government Should Not Determine the Games You Buy

June 24, 2009 -

Eurogamer caught up with Take-Two Interactive CEO Ben Feder for a wide-ranging interview which is now available on the site.

While much of the conversation deals with various T2 games, Feder did touch upon the Manhunt 2 controversy and the notion of government censorship of games:

We firmly believe that games are art. A), we have the right to produce art. B), the consumer should have the right to make their own choices, providing the labelling on the package is clear about the content of the game.

Apart from that, I don't think it's the role of governments to determine what you or any of your readers can, or should, buy. They should be able to make their own choices. Government has no role in that at all...

Asked whether the interactive nature of games requires them to be viewed apart from, say, movies, Feder said:

It's not a difference with distinction... It's as if to say art as a painting is different than art as a sculpture. For sure they're different art forms and they use different mediums, but they're art nonetheless - they're forms of expression.

That, at least in the United States, is something that's guaranteed by the constitution, and in democracies in Western Europe there are very similar concepts about the ability for individuals to express themselves. If you stifle that, then society and the economy pay a pretty heavy toll.

Of particular interest given the ongoing RapeLay controversy, Feder was asked whether T2 might theoretically permit edgy developer Rockstar to create a game featuring sexual violence or abuse of children, Feder commented:

Look, I suppose there's a line somewhere. I don't think we've even come close to it. At the end of the day, we're also a commercial enterprise and we do intend to turn a profit with our games. That, in and of itself, provides a certain boundary beyond which we won't go.

I suppose there are more lines [beyond] which we'd be uncomfortable, but I don't think any of our games in the past, or any of our games that I've seen in development, come even close to that.

27 comments

2K Sports Takes NBA Game to Chinese Market

June 23, 2009 -

Basketball is wildly popular in China and so are online games.

Seeing big revenue in that combination, 2K Sports announced today that it will create an online version of pro hoops game NBA 2K for the Chinese market. Chinese Internet portal Tencent Holdings will partner with 2K Sports on the deal.

Licensing for the game includes all NBA team along with current and retired players. 2K Sports president Christoph Hartmann is quoted in a press release issued this morning:

The incredible popularity of basketball in Asia combined with the love of online games in that region makes this a very exciting project for 2K. For the first time, 2K is developing an online game combining our expertise in making the best-selling and top-rated NBA 2K video game franchise with the proven ability of Tencent for developing and operating highly successful online game communities in China.

Online gaming was a $2.75 billion business in China in 2008 and more than a billion Chinese viewed NBA programming during the just-completed season.

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Court Filing: 2KGames Developing "Duke Begins"

June 22, 2009 -

Digging deeper into a court document filed on Friday by Duke Nukem developer Apogee Software reveals that - at least according to Apogee's attorneys - 2K Games is creating a new Duke Nukem property with the working title Duke Begins.

The following passage appears in Apogee's response to a suit filed against it last month by publisher Take-Two Interactive:

On October 22, 2007, Apogee, Take-Two, and 2K Games entered into an agreement in which Apogee granted 2K Games the exclusive right to develop and publish a new videogame based upon Apogee's Duke Nukem franchise... The new game was given the working title of "Duke Begins" and is not the same game as the DNF game...

 

The original development schedule for the Duke Begins game provided that the game was to be completed and commercially released by mid-2010...

 

Take Two and/or its subsidiary 2K Games halted or otherwise cancelled all development work by the third-party game developer on the Duke Begins game in April 2009... without Apogee's approval or consent...

 

When Apogee confronted Take-Two and 2K Games about the... cancellation of the Duke Begins development work... Take-Two and 2K Games simply denied it... Take-Two and 2K Games are taking such actions with a goal of pressuring Apogee to sell the Duke Nukem franchise rights to Take-Two for less than their true value.

DOCUMENT DUMP: Read Apogee's court filing here (20-page pdf).

UPDATE: GP spoke with a Take-Two representative who declined to comment, citing pending litigation.

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MaskedPixelantehttps://twitter.com/IGLevine/status/457552538343325696 The Lutece Twins show up in some of the most unlikely of places.04/20/2014 - 2:44pm
Andrew EisenAs it happens, Chinatown Wars is the only GTA game I've played.04/19/2014 - 10:43am
Papa MidnightWith GTA5 (to date) failing to even provide indication of a PC release, I'm realising that this might be the first GTA game that I have not played (outside of Chinatown Wars) since the series inception.04/19/2014 - 8:14am
IanCSo im guessing a bunch of edutainment games, which a lot of people elsewhere are going gaga over, dot count as classics? Okay. If you don't mind me, i have a sudden urge to play Putt Putt....04/19/2014 - 6:15am
MaskedPixelantehttp://www.joystiq.com/2014/04/18/playstation-99-cent-sale-discounts-tokyo-jungle-super-stardust/ Weekend long PSN flash sale. So much stuff is 99 cents for the rest of the weekend.04/18/2014 - 5:59pm
Adam802http://www.polygon.com/2014/4/18/5627928/newtown-video-game-addiction-forum04/18/2014 - 4:14pm
Matthew Wilsonit is a video talking about why certain games/products/consoles do well, and others do not. he back it up with solid research.04/18/2014 - 3:56pm
Andrew EisenI'm not keen on blind links. What is it?04/18/2014 - 3:45pm
Matthew Wilsonthis is worth a whatch https://www.youtube.com/watch?v=MyXcr6sDRtw&list=PL35FE5C4B157509C904/18/2014 - 3:43pm
MaskedPixelanteNumber 3: Night Dive was brought to the attention of the public by a massive game recovery, and yet most of their released catalogue consists of games that other people did the hard work of getting re-released.04/17/2014 - 8:46pm
MaskedPixelanteNumber 2: If Humongous Entertainment wanted their stuff on Steam, why didn't they talk to their parent company, which does have a number of games published on Steam?04/17/2014 - 8:45pm
MaskedPixelanteNumber 1: When Night Dive spent the better part of a year teasing the return of true classics, having their big content dump be edutainment is kind of a kick in the stomach.04/17/2014 - 8:44pm
Matthew Wilsonhttp://www.giantbomb.com/articles/jeff-gerstmann-heads-to-new-york-takes-questions/1100-4900/ He talks about the future games press and the games industry. It is worth your time even though it is a bit long, and stay for the QA. There are some good QA04/17/2014 - 5:28pm
IanCErm so they shouldn't sell edutainment at all? Why?04/17/2014 - 4:42pm
MaskedPixelanteNot that linkable, go onto Steam and there's stuff like Pajama Sam on the front-page, courtesy of Night Dive.04/17/2014 - 4:13pm
Andrew EisenOkay, again, please, please, PLEASE get in a habit of linking to whatever you're talking about.04/17/2014 - 4:05pm
MaskedPixelanteAnother round of Night Dive teasing and promising turns out to be stupid edutainment games. Thanks for wasting all our time, guys. See you never.04/17/2014 - 3:44pm
Matthew WilsonAgain the consequences were not only foreseeable, but very likely. anyone who understood supply demand curvs knew that was going to happen. SF has been a econ/trade hub for the last hundred years.04/17/2014 - 2:45pm
Andrew EisenMixedPixelante - Would you like to expand on that?04/17/2014 - 2:43pm
MaskedPixelanteWell, I am officially done with Night Dive Studios. Unless they can bring something worthwhile back, I'm never buying another game from them.04/17/2014 - 2:29pm
 

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