The New York Times' Deal Book blog speculates today that Activision Blizzard may be eyeing an acquisition of Grand Theft Auto publisher Take-Two Interactive.

Electronic Arts, of course, has been chasing T2 for most of 2008 and has a tender offer outstanding. EA's problem, however, is that T2 shareholders just aren't jumping on board so far.

Analyst Mike Hickey of Janco Partners told the Deal Book:

We absolutely believe Activision will take a look at Take-Two. If a competitor is for sale, you take a look, and if EA is your real rival, why wouldn't you stir the pot a little bit?

However, UBS Securities analyst Ben Schachter pooh-pooh any such deal:

It is highly unlikely that Activision would try to outbid EA. They have enough on their plate at the moment.

The oft-quoted Michael Pachter of Wedbush-Morgan had his own opinion:

There are only three players involved — EA, the FTC and the arbs. Is EA likely to withdraw or lower their offer? No, because they want Take-Two. The odds of the FTC not approving the deal on market concentration is virtually zero. And if the arbs want to sell the stock, they'll sell the stock — they don't care what [T2 chairman] Strauss Zelnick thinks the stock is worth.

Mike Musgrove of the Washington Post reports that the Activision-Vivendi merger is now official, following a vote by 92% of Activision shareholders to approve the deal.

The new company will be known as Activision Blizzard. We hope to see a new logo unveiled, as opposed to mock-ups, like the one at left, which can found around the web.

Referring to EA's now-former status as the biggest kid on the game industry block, Wedbush-Morgan analyst Michael Pachter told Musgrove:

It's good to have a duopoly instead of a monopoly. This just makes the industry that much more interesting.

An attempt to block Activision's merger with Vivendi has ended with a ruling issued by William B. Chandler III (left), chief judge of the Delaware Court of Chancery.

As reported by the Wall Street Journal Law Blog, the judge has apparently taken notice of what World of Warcraft - one of the leading assets in the merger - is all about.

In denying a municipal pension plan's request for a preliminary injunction which would have put the Activision-Vivendi marriage on hold, Judge Chandler wrote:

In some ways, perhaps, the world of Mergers and Acquisitions is a massively multiplayer role playing game as well. Like in World of Warcraft... the participants in the M&A field take on certain roles, interact in their own community, hone specialized skills, and even develop a unique, somewhat curious vernacular.

 

One particular quest in the world of M&A is disclosure litigation. In the instance of disclosure litigation presently pending before this Court, the world of M&A meets the World of Warcraft.

 

In the role-playing game that is this disclosure litigation, both sides have played their respective roles well. Like any game, this one has rules, and the most essential rule of disclosure is materiality. Because the plaintiff could not establish the materiality of its final three disclosure claims, the motion for a preliminary injunction is denied. . . .GAME OVER.

GP: Very cool, indeed, your honor. Read the full decision here (31-page pdf).

Reporter Mike Musgrove digs into the ESA's recent difficulties in today's Washington Post.

Musgrove brings an interesting perspective to the piece, given that he wrote one of the early profiles of embattled ESA CEO Michael Gallagher last September. In response to Musgrove's questions about losing Activision, Vivendi, LucasArts and id as member companies, Gallagher said:

There are hundreds of trade associations in Washington and virtually all feature member turnover and the ESA is no exception.

Full Disclosure Dept: The ECA is the parent company of GamePolitics…

Game biz guru Keith Boesky offers his thoughts on last week's stunning news that Activision and Vivendi have pulled out of the ESA.

While the decision of Activision and several other publishers not to participate in this year's E3 got much of the attention of the gaming press, Boesky sees the ESA defections as the real issue - and we agree:
 

The ESA is this industry’s most important advocate. The organization’s impact as a lobbyist in Congress is effective, but not really tangible... We can however point directly to litigation efforts, which... beat, every legislative attempt to restrict or impair the sale of video games... If not for The ESA, video games would likely not be considered an expression of free speech...

...many are speculating about disappointment over [ESA CEO] Mike Gallagher... We can expect a less confrontational organization than the old ESA and again, it is too early to know whether it is a good thing. I don’t think Mike’s presence... drove the decision...

Activision... simply did not want to pay the fee. ESA membership fees are based on revenue. The soon to be largest publisher in the world will be paying more than anyone else, and it did not sound like fun. As far as the impact on lobbying... Activision... can pay a portion of the money they would otherwise pay in membership fees and target their own issues...

Moreover, we have yet to see whether this action is truly a withdrawal, and not a negotiating posture to revise the fee structure has yet to be seen. If it is a withdrawal, it could signal the end of The ESA as we know it.

Meanwhile, The Escapist offers its take:
 

[Activision's] walking away from a long-standing industry group like the ESA is not something done lightly... In light of the news that other industry majors are also dropping out of E3, it leaves the impression that the ESA is standing on some rather shaky ground...

An imploded ESA... leaves the industry without any form of organized political influence in Washington. With anti-videogame hysteria swirling around releases like Grand Theft Auto IV and Bully while the general public is subjected to a steady stream of misinformation... the lack of a unified voice speaking for the industry could be devastating.

The Entertainment Software Association, the trade association which represents US game publishers, is losing Activision and Vivendi as member companies.

UPDATE: We've just received confirmation from the ESA. Rich Taylor, ESA Senior Vice President of Communications and Research, issued the following statement:
 

While the Entertainment Software Association remains the preeminent voice for U.S. computer and video game publishers, we can confirm that Activision and Vivendi Games opted to discontinue their membership.

The ESA remains dedicated to advancing our industry’s objectives such as protecting intellectual property, preserving First Amendment rights, and fostering a beneficial environment for the entire industry. Our high level of service and value to members and the larger industry remains unchanged.

We began working on this story this morning after reading online reports that Activision would not be exhibiting at E3 in July. Beyond that information, GamePolitics observed that the ESA's new website lists neither Activision or Vivendi as member companies.

The two game publishers, of course, are in the process of merging into Activision Blizzard. The reason for their decision to leave the ESA remains unclear at this point. Also unclear is whether any additional game publishers may defect from ESA member ranks.

The loss of two of its larger member firms will likely have a significant impact on the ESA's revenue base. In addition to its own operations, the ESA funds E3, the Video Game Voters Network, the Academy of Interactive Arts & Sciences and the D.I.C.E. Summit. Any or all of those entities could feel the repercussions from the ESA's loss of member revenues.

UPDATE 2: We've got comment from Activision now:
 

After careful consideration, Activision has decided not to renew its ESA membership for business reasons and will not be participating in any official E3 activities.  We appreciate the work that the ESA has done over the years in promoting the interactive entertainment industry with state and federal governments and wish the ESA best of luck with the show.

UPDATE 3: Kotaku is reporting that four more publishers (NCSoft, Codemasters, id and Her Entertainment) won't participate in E3, although they are not dropping out of the ESA). Kotaku also has quotes from Wedbush-Morgan's Michael Pachter, who blames ESA president Mike Gallagher for the current issues with the publishers:
 

Lowenstein was a very savvy industry veteran who paid attention to the goings-on in the industry and cared what the community had to say. The new person... whose name completely escapes me because I've never met him or heard from him, is far less knowledgeable and sophisticated about this industry than Doug was and is going to make some rookie mistakes.

Doug used to be a very visible spokesperson in congress... when you'd get these [things like] Barack Obama saying videogames are corrupting our youth or MADD saying that Take-Two should pull GTA off the shelves, you would hear Lowenstein immediately shoot back. I would guess that Activision doesn't perceive the same value from the ESA as they did under Doug's leadership. I criticize [Gallagher's] lack of drive to learn about the industry.