Take-Two execs see consolidations ahead
Zelnick: Well-financed congloms can rebalance portfoliosNEW YORK -- Top executives at video game maker Take-Two Interactive Software on Monday talked up possible acquisitions of gaming firms by media and entertainment conglomerates.
The tough economic times will force some industry biggies to hunker down, but allow well-financed conglomerates to rebalance their portfolios amid today's lower stock prices, chairman Strauss Zelnick told the UBS Global Media and Communications Conference.
Some conglomerate CEOs' reactions amid their own and everyone's depressed stock prices might be "I just don't care," he said, with CEO Ben Feder echoing that view. "Valuations lead to deal making," he said.
Both executives also suggested that consolidation within the video gaming sector would continue.
Asked later by The Hollywood Reporter if Take-Two was still for sale after failing to reach a deal with Electronic Arts, Zelnick reiterated that the company had completed its review and was focused on going things on its own. "We are staying independent," he told THR. "But we are here for our shareholders," he added, leaving the door open should offers come in.
Zelnick declined to discuss the state of contract talks with "Grand Theft Auto" creator Rockstar Games, whose deal with Take-Two expires in February.
"We value the relationship, and they are very important to us," he told THR. "We hope to be in business (with them) for a long time."
Executives from Activision Blizzard and other gaming firms are believed to be interested in signing the Rockstar team as well.
The Take-Two leaders also told the UBS conference that they feel their company and the rest of the gaming sector are not immune from the recession, but they feel better positioned than others.
"These are tough times, and we believe nobody is immune," Feder said.
But he argued gaming firms are better positioned than others. After all, gaming remains "the strongest growth segment of the entertainment industry," he highlighted.
Zelnick echoed that view: "I didn't feel immune to the economy in good times," and things haven't changed in the current downturn, he said.
He argued though that Take-Two is better positioned than peers though given that it owns more than 50% of its intellectual property. The creative center of the gaming business has moved from Hollywood and others to its own creative sources, Zelnick added.
The executives also pointed to growth opportunities in Asia and emerging businesses, such as downloadable content and possible game offers on Apple's iPhone, as key opportunities for Take-Two.