On November 29, at the Reuter’s Media Summit John Riccitiello said: “Is it ripe (for mergers), or has it already been picked? I would argue that it’s been largely picked.” So he was telling the world that consolidation in the video games industry was pretty much all done.
Then on December 2 Vivendi bought Activision. Which relegated EA to the position of number two global games publisher. And confirmed the trend that big global media companies need to be in gaming and are buying the industry out.
So on December 10 this blog asked the obvious question, who is going to buy Electronic Arts? Because it really does look like a juicy target for one of those massive media companies like News Corporation. How to acquire a powerful worldwide gaming presence in just one purchase. A typical Rupert Murdoch move.
Then on February 7 there were rumours that Viacom was going to buy Take 2 for $1.5 billion. Which made sense in the overall scheme of things. But it turned out to be so much hot air. Nevertheless, with these things there is rarely smoke without fire so Viacom were probably thinking about something.
If they were they have had a shock because on February 15 Electronic Arts put in a near $2 billion bid for Take Two. This was rejected so EA upped the bid slightly only to be rejected again. EA even have a special website to explain what they are doing. The proposed merger would bring the classical consolidation advantages of removing duplication, especially in sales, marketing and distribution. They would also be able to get rid of wasteful competition in sporting games. Best of all it would make EA the number one publisher again and make them so big that even the biggest predator would have to think twice before trying to gobble them up.
As the December 10 article here said: “The main way to remain independent is to rapidly become a lot bigger.” So, does John Riccitiello read this blog?