Exclusive outtakes from industry leaders
The video game sector is often seen as being particularly ripe for consolidation, with some expecting old line media giants such as Time Warner to swoop in and scoop up a publisher to diversify their entertainment rosters.
But Strauss Zelnick, chairman of "Grand Theft Auto" publisher Take-Two Interactive, remains surprised by the lack of action on the consolidation front. “I think the legacy media companies have not been especially aggressive about interactive entertainment,” he said at the Reuters Global Media Summit in New York on Wednesday. His company, of course, fought off Electronic Arts' hostile takeover bid in 2008.
“I have to admit there are times when I’m surprised they’re not more exposed."
He said media world executives have long memories, which may explain in part their reluctance to buy a video game outfit. He said one name in particular, Atari, remains a cautionary tale. Warner Communications bought the iconic video game name in 1976 in what turned out to be a disastrous deal.
With financial markets in turmoil and the U.S. economy in recession, we asked top entertainment and sports executives at the Reuters Media Summit for some investment advice.
Our question: “If we gave you $50,000, where would you invest?” One rule: They couldn’t pick their own company. But then we thought $50,000 was too little for well heeled executives, so we switched it to $50 million. But that seemed excessive. After all, we’re talking about personal investments — so we settled on giving them a cool $1 million.
Strauss Zelnick, chairman of Take Two Interactive, has a bone to pick with the media: He doesn’t like the two words “Financial” and ”Crisis.” At least not when they are used to describe the current state of economic affairs.
“I don’t think we’re in a financial crisis,” Zelnick said at the Reuters Media Summit. “The use of the word crisis — I’m loathe to be critical of the media since I’m every bit a part of the media — but I don’t think the word has been especially helpful. We’re obviously in a recession and these are very very trying times.”
The spectacular debut this month of Take Two’s blockbuster video game Grand Theft Auto was no better than expected, EA’s head of international publishing, Gerhard Florin, told the Reuters Technology, Media and Telecoms summit in Paris.
EA on Monday extended its public offer for Take Two by a month after failing to win more shareholder support for its $2 billion hostile bid but did not up the price. Florin said he was surprised there had not been a more negative approach to the violent game, which instead was hailed as a work of art, even in Germany, which tends to shun violent video games.