I know you seem really passionate about this move, but its not as good as it sounds in reality.
1st - Sony already make a fortune with Take-Two as it is with the giant sales on PS platforms.. so the money isn't that much greater than if they went out brought them which would be considered a lot of money for Sony to spend as a corporation. Not only do you choke hold the games from Take-Two which means Take-Two sell less units overall, it means the profits wont be as high as they are now.
2nd - You never buy companies when there at there peak which would be the case here thanks to Rockstar etc. Its corporate suicide to spend so much at such a peak time. They need to play is smart and wait for companies to devalue than you jump on board. Look at MS and the studios they brought, they didn't just go out and buy the biggest studios in the world at there very best, they brought what would have been good prices and talent for the money. So the companies under them can gain value and grow over the course of being successful which will increase MS stocks. Take-Two is already extremely successful so there value as a company wont go up as much, but they can drop extremely low if mistakes happen or they fall apart.
3rd - Its a giant slap in the face to the industry and gamers alike who play there games, we are not talking about 1 or 2 million gamers missing out here, we are talking about the likes of 40m+ GTA fans missing out due to this idea. That's not a good image to have. And definitely not a good financial one either. We know Sony well enough now that anything they own will be locked, they wont share it with others, maybe PC.. big maybe.. Unless Sony do what MS do with Minecraft and make the big games multiplat so they can make the most amount of profit to earn back there spending's. But its Sony, I highly doubt they would.
4th - You don't make these big purchases on the brim of a new generation especially when the competition is going to be fierce. Don't expect Xbox to fall over the starter line next gen and don't expect Nintendo to make another WiiU mistake. Next gen is going to be big for all 3 as it looks promising on all sides. Take-Two joining Sony sounds good only on Paper but if the next Xbox outsells the next Playstation console or even if its on Par or close than Take-Two already lost in the deal because the more customers the industry has = more sales potential they could have earned overall, but not if you are tied to one or two platforms.
Nvidia just bought out Mellanox who is at an all time 12 year high. It's a cash deal and Nvidia has about $7.5 bil in cash and is paying $7.0 bil in cash to acquire them. Nvidia is purchasing them for $125 per share when the stock was around $110 when rumors came out that Nvidia may outbid Intel. Nvidia's market cap is $100 bil, but in a cash deal that doesn't mean a whole lot, and Mellanox has a $6.5 bil market cap.
SNY has $25 bil in cash. SNY market cap is $60 bil and Take Two market cap is $10 bil. Take Two stock was floating around $90 per share before the SNY rumors, and is now closer to $95 per share. Take Two is down from the all time high of $140 per share over the past couple of years, but is still on an overall 20+ year high. SNY should be able to buy Take Two if the deal can be made for anywhere between $11 and $15 bil. It would leave SNY with at least $10 bil in the bank still.
Nvidia is worth way more than SNY but doesn't have near the cash sitting around. Mellanox is mostly being bought for it's tech know how and IP so Nvidia can make a better product and more money in the future, and their net income over the last couple of years isn't that much different than Take Two. Take Two actually made slightly more then Mellanox. Intel even has $11.5 bil in cash and lost the bid to Nvidia.
Part of why Nvidia is probably doing this, is because Intel is coming out with what hopefully will be somewhat competitive GPU's in the next couple of years, and AMD is a year or two away from their redesigned next gen GPU architecture finally. For the graphics sector, it's on the verge of 'next gen' you could say, and so Nvidia is doing what they feel necessary to retain their stranglehold on the market, as well as make headway into new markets. This fits quite well with why SNY may want to try and acquire a company like Take Two, since they've been the market leader this gen, making by far the most money, much like Nvidia has, and they can expand into new markets, while strengthening their existing.
Whether or not the purchase makes sense based on what PS and SNY want to do with the business, and whether Take Two is something they can actually acquire aside from money, the deal shouldn't be much of a problem when it comes to financials. The deciding factor would mostly be Take Two and their ability to sell or resist and how much they feel is a reasonable sale price.
As for making Take Two titles exclusive, while it would be a slap in the face to the industry, so were the studios they bought in the past, as well as the studio's more recently purchased by MS. SNY initially acquired those studios to be able to build their brand to what it is today, and MS is purchasing theirs because they realize what it has done for SNY and that if they don't, they may not be around for long to compete directly with SNY. Just because MS has put themselves on a more even playing field in terms of first party titles, doesn't mean PS is going to just sit there and watch. The fact that PS has had an advantage in terms of first party is part of what has made them the market leader, so it only makes sense to try and hold onto that position. While they could buy many more smaller studios like MS did, buying Take Two takes care of everything and more, all in one easy shot, and while MS pulls their hair out trying to manage and build out their new studios, PS can mostly sit back and let Take Two do their thing, exclusive or not.
While this probably sounds like I think it's going to happen, I don't actually, mostly based on SNY building out their own established studios already, working so closely with Kojima, etc, but I can't deny the possibility that PS will go big like they usually do next gen, but in terms of software this time around and not so much hardware.
Last edited by EricHiggin - on 16 March 2019