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Source: A report on UK gaming site MCV says rumors are circulating that Activision is looking to acquire Take-Two Interactive.

What we heard: The MCV article cites "a senior executive" as saying that rumors are floating around other bigwigs in the game industry that Activision is considering making a play for Take-Two. GameSpot's own sources added to that, saying there had been some talks between the companies.

An Activision-Take-Two union would indeed be industry-shaking, but not entirely unprecedented. After all, Activision in 2007 merged with Vivendi Games in an $18.9 billion deal, bringing genre-dominating franchises like World of Warcraft and Call of Duty under the same roof and relegating Electronic Arts to the position of the industry's second-biggest third-party publisher.

However, beyond Call of Duty and Blizzard's offerings, Activision's lineup has been shrinking of late. This week the publisher disbanded its Guitar Hero division, signaling an end to the mainstream phenomenon's six-year run. It also confirmed that the annualized Tony Hawk franchise would be taking 2011 off at least, and scrapped the open-world crime game True Crime: Hong Kong.

A Take-Two acquisition would help fill some of those holes in the lineup, most notably with Rockstar Games' own open-world crime series, Grand Theft Auto. Take-Two also boasts Rockstar's latest hit, Red Dead Redemption, as well as popular franchises like BioShock, Civilization, XCOM, Max Payne, and Borderlands. Another potentially attractive aspect of an acquisition would be 2K Sports, which recently scored a hit with the Michael Jordan-fronted NBA 2K11, and also includes the Top Spin, MLB 2K, and NHL 2K franchises.

If Activision were to purchase Take-Two, not only would it give the publisher a competitive foothold in the sports market against EA, but it would also one-up its largest rival at the same time. In February of 2008, EA attempted to purchase Take-Two for roughly $2 billion. When Take-Two executives declined the offer, EA made its intentions public and tried to buy the company directly from Take-Two shareholders. The companies jousted for months, with EA eventually withdrawing its offers and walking away in September of that year.

However, simply having talks is a long way from a done deal. After all, EA and Take-Two had talks that fell through, even though the Madden publisher's $2 billion offer included a steep premium above and beyond the Take-Two stock price. It's hard to see Take-Two saying yes to a lower offer now that Red Dead Redemption has panned out as a franchise-worthy blockbuster possibly along the lines of Grand Theft Auto. It's also hard to see the famously frugal Activision matching EA's previous number when the economic recovery is only now accelerating and Take-Two's stock is even lower now than it was before EA's initial advances. (Take-Two shares hit a low of $15.83 in February 2008, but haven't topped $15.51 this month.)

There's also the matter of corporate culture clash. When Activision brought Blizzard into the fold, it was willing to let the company operate almost autonomously because of its proven track record of smash hits. On the other hand, Take-Two habitually delays its high-profile games (Max Payne 3, L.A. Noire, Duke Nukem Forever, Mafia II, Red Dead Redemption, BioShock 2, Midnight Club: Los Angeles, Borderlands, and Grand Theft Auto IV, to name a few), and the wait doesn't always pay off in a monster hit.

Activision's approach to publishing is based more on surefire blockbuster hits like the Call of Duty series and on licensed titles with reliable audiences that can turn at least a modest profit, like Spider-Man, James Bond, Bakugan, and the Cabela's hunting games. While Grand Theft Auto and Red Dead Redemption might buy Rockstar Games a measure of independence from Activision's standard operating procedure, it's not at all clear how the rest of the Take-Two operation would be folded into Activision, or what level of autonomy they would be granted.

The official story: "We don't comment on rumors and speculation."--A Take-Two representative. Activision representatives had not returned requests for comment as of press time.

Bogus or not bogus: Not bogus that Activision and Take-Two are talking about an acquisition. But there are a lot of logistical issues that would need to be agreed upon before anything is finalized, not the least of which is a price.

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Interesting

100th post *clap

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