Activision eyeing Take-Two swoop?

An eventful week for Activision rolls on: rumours are circulating at the highest level that the company is eyeing a shock acquisition of rival Take-Two.

If true, and if successful, the bid would bring blockbuster brands and hit studios under one roof – Call of Duty and Grand Theft Auto, BioShock and World at Warcraft, all living together.

On Wednesday, Activision proved it isn’t afraid to abandon any under performing franchise as it focuses on the best of the best. Adding teams like Irrational and Rockstar Games to its stable would only underline that.

This week it cut short the life of both Guitar Hero and DJ Hero and canceled free-roaming action title True Crime: Hong Kong – but this has left the publisher with gap in its slate of IP which Take-Two’s games would capably fill.

"There are very strong rumours amongst people at a very senior level within the global business," a senior executive told MCV this week.

"But there’re not much more than that at the moment – they are just rumours. And, of course, given Activision’s news this week, everyone is now looking to see what their next move is. But you can definitely put two and two together and make four-ish."

Call of Duty remains the publisher’s key console franchise, along with Bungie’s still mysterious ‘universe’ and the upcoming Prototype sequel. It also currently owns the games rights to key licenses such as James Bond, X-Men, Transformers, Spider-Man and Bakugan

Then of course there’s the core Blizzard stable of titles – World of Warcraft, StarCraft and Diablo.

It could be that the killing off of True Crime: Hong Kong, a title that was believed to be almost entirely complete prior to cancellation, is being seen as a possible sacrificial lamb to benefit the fortunes of Grand Theft Auto and is simply fuelling the rumour.

But our source added that Bobby Kotick still has a huge desire to cement Activision’s position as the world’s leading global publisher.

Earlier this week Take-Two reported a seven per cent year-on-year increase in net profit to $40.8m for the quarter ending December 31st 2010. Since Friday February 4th shares in the company have risen 11.6 per cent.

Activision has a proven track record of big-money moves, with its 2008 merger with Blizzard proving a resolute success. It’s also not afraid to shut under performing developers and, conversely, plough seemingly endless resources into projects in which it has confidence.

For example, it is understood that a total of five studios (Treyarch, Infinity Ward, Sledgehammer, Raven, Beachhead) are currently working on Call of Duty.

Indeed, as part of Activision’s financial report this week publishing CEO Eric Hirshberg stated that the company "intends to devote our time and resource to the areas, where we have true competitive advantages and the potential to make gaming experiences that are best-in-class".

If the rumours are true, however, Activision could well be expecting strong resistance from Take-Two. In 2008 EA attempted a hostile takeover of the publisher valued at around $2bn – an amount that represented a hefty premium over the company’s actual share value.

Take-Two though remained resolute in its defiance of the move, ignoring several extended deadlines and public statements of intent from EA boss John Riccitiello. Take-Two’s then executive chairman Strauss Zelnick branded the bid as "inadequate".

Of course, that was 2008. In the time that has followed there have been changes at Take-Two, most notably the increased stake of media magnate and billionaire Carl Icahn. In 2010 it was rumoured that Icahn, who is a former chairman and now a major shareholder of rental chain Blockbuster, was prepping Take-Two for acquisition.

UPDATE: It’s also worth noting that while Rockstar and its IP is wholly owned by Take-Two, the contracts of the studio’s major talents – including the Houser brothers – is due to expire in 2012.