Take Two CEO talks about consolidation

Take-Two Interactive CEO Ben Feder says:

Video-game development is not getting any cheaper. It’s a capital-intensive business, and I don’t see that going away. That will drive some of the smaller competitors out.

Take-Two rose 8.7 per cent due to speculations about further consolidations. Its funny that Electronic Arts CEO John Riccitiello said that he does not expect any more mergers last week.

Is it ripe (for mergers), or has it already been picked? I would argue that it’s been largely picked. That doesn’t mean it’s done. I think there will be more consolidation to come. But let’s just say a lot has already happened,

Lazard Capital Markets’ Colin Sebastian says

For the industry, we believe the acquisition could signal additional consolidation, potentially including other leading publishers such as Electronic Arts, Ubisoft or THQ, while larger media companies such as Disney, Viacom and Time Warner continue to grow their interactive entertainment businesses,

He did not mention SCi Entertainment and Take-Two who have several successful brands under their belt. Actually a more interesting question is, how does this merger affect Asian publishers. Konami, Capcom, Square-Enix, and Namco are trying to expand their market in the west. It would actually make sense for them to acquire talent in the US, Canada, and Europe. Sega has already been doing that. Struggling publishers like Atari and Midway might be a good acquisition target considering their cheap price right now.

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