Support NeoGAF

[cja]

In Take-Two's just released 10-K:
http://www.sec.gov/Archives/edgar/data/946581/000112528204006450/b401856_10k.htm

has the details...

Effective May 2004, we entered into a three-year agreement with SEGA Corporation, whereby we co-publish and exclusively distribute SEGA’s sports titles. Pursuant to an option agreement with SEGA, we have the right to acquire Visual Concepts Entertainment, Inc. (“Visual Concepts”) and its subsidiary Kush Games (“Kush”), California-based developers of SEGA’s sports titles, and the intellectual property rights associated with the realistic sports simulation games developed and/or produced by Visual Concepts and Kush.

Globalstar recently launched four high quality sports titles at a value price of $19.99 under an agreement with SEGA. While we believe that this value pricing may have provided a catalyst for consumers to purchase these titles, the highly favorable game rankings of the titles developed by Visual Concepts and Kush is expected to help build long-term brand loyalty. We currently anticipate that we will ship ESPN MLB 2K5 (major league baseball) in fiscal 2005.

Co-publishing and Distribution Arrangement with SEGA

Effective May 2004, we entered into a three-year agreement with SEGA Corporation, whereby we co-publish and exclusively distribute SEGA’s sports titles. Under our current arrangement, we are entitled to receive all of the revenue and profit, if any, from the sale of the sports titles developed by Visual Concepts and Kush, and we are obligated to pay for development and marketing costs of the sports titles. The agreement may be terminated by us under certain circumstances, including as a result of SEGA’s failure to obtain licenses from the major sports leagues and players associations.

Pursuant to an option agreement with SEGA, we have the right to purchase all of the outstanding capital stock of Visual Concepts and Kush. The option is exercisable until the earlier of (1) March 31, 2006 or (2) the termination of our distribution agreement with SEGA. We are currently negotiating the option price, and we are continuing to evaluate potential opportunities in the market for sports titles.

 

[DMczaf]

Cursed until the end.

 

[DJPS2]

"The agreement may be terminated by us under certain circumstances, including as a result of SEGA’s failure to obtain licenses from the major sports leagues and players associations."

That quote right there says to me that the marriage between Take-Two and Sega is definitely on the rocks.

 

[jarrod]

Buh-bye VC/Kush... you'll soon be joining Indie in T2's great sports hope. No wonder EA's trying to buy every license they can, T2's gunning for them.

 

[bitwise]

"The agreement may be terminated by us under certain circumstances, including as a result of SEGA’s failure to obtain licenses from the major sports leagues and players associations."

That quote right there says to me that the marriage between Take-Two and Sega is definitely on the rocks.

it's just a pre-nup. quite common, really.

 

[DJPS2]

Buh-bye VC/Kush... you'll soon be joining Indie in T2's great sports hope. No wonder EA's trying to buy every license they can, T2's gunning for them.

I never thought of it that way. Wow.

 

[jarrod]

That quote right there says to me that the marriage between Take-Two and Sega is definitely on the rocks.

Except that T2 deperately needs to diversify and sports is by a wide margin the biggest consistant moneymaker in American videogames. Even if they lost the NFL, there's plenty of cash to be made annually from NCAA, NBA, NHL, PGA and MLB, plus infrequent offshoots like Tennis or Snowboarding. All this tells me is that Sega will be out of the equation in the next year or two.

 

[cja]

On T2's diversification of the sports line-up:

Venom. In September 2004, we acquired all the outstanding capital stock of Venom, a UK-based developer of the boxing games Rocky and Rocky Legends. The purchase price was $1,295 paid in cash at closing. In connection with the acquisition, we recorded identifiable intangibles of $750 and goodwill of $626 on a preliminary basis.

Numbers in thousands (so $1.295m paid for the small developer).

 

[DarienA]

Hmm I wonder if a few years from now will people be bitching about T2's acquisitions....

 

[DJPS2]

Hmm I wonder if a few years from now will people be bitching about T2's acquisitions....

They're not EA, so no.

 

[The Faceless Master]

so Take-Two plans to take on EA?
head on!@?
good luck

:lol :lol :lol

 

[Shard]

The question I have is when Take 2 bought Indie Built did they get just the developer or did they get just the developer, or did the manage to get Links, Amped, and Top Spin in the deal as well?

 

[dskillzhtown]

so Take-Two plans to take on EA?
head on!@?
good luck

:lol :lol :lol

I always thought Activision or THQ would have the muscle to take EA on directly.

 

[jarrod]

On T2's diversification of the sports line-up:


Numbers in thousands (so $1.295m paid for the small developer).

Holy crap... now they have...

-NBA Basketball
-NCAA Football
-NCAA Basketball
-NHL Hockey
-MLB Baseball
-PGA Links
-Tennis
-Snowboarding
-Boxing

...all covered. EA might have the NFL and Nascar cornnered by T2 could really take them to task on the rest of their Sports lineup. T2 only needs a really solid Soccer game now.

 

[Shard]

Does EA have a tennis game?

 

[={<SMOKE>}=]

Co-publishing and Distribution Arrangement with SEGA

Effective May 2004, we entered into a three-year agreement with SEGA Corporation, whereby we co-publish and exclusively distribute SEGA’s sports titles. Under our current arrangement, we are entitled to receive all of the revenue and profit, if any, from the sale of the sports titles developed by Visual Concepts and Kush, and we are obligated to pay for development and marketing costs of the sports titles.

what the hell did sega get out of this deal if take-two was walking away with all of the profits? perhaps their goal from the jump was to sell visual concepts, kush, and the espn 2kx series to take-two with the publishing deal being a "testing grounds"?

 

[nightez]

we are entitled to receive all of the revenue and profit, if any, from the sale of the sports titles developed by Visual Concepts and Kush, The agreement may be terminated by us under certain circumstances, including as a result of SEGA’s failure to obtain licenses from the major sports leagues and players associations.

Looks like Sega's still making bad business decisions after all these years.
Who runs this company?

 

[dskillzhtown]

what the hell did sega get out of this deal if take-two was walking away with all of the profits? perhaps their goal from the jump was to sell visual concepts, kush, and the espn 2kx series to take-two with the publishing deal being a "testing grounds"?

That is what it looks like to me. Looks like Sega just wanted to get rid of Take Two.

 

[nightez]

That is what it looks like to me. Looks like Sega just wanted to get rid of Take Two.

Sega dont own Take Two

 

[jarrod]

I think he means Sega's looking to dump Visual Concepts... which makes sense, as Sega's been continually scapegoating them for heavy financial losses.

 

[GFord]

I think he means Sega's looking to dump Visual Concepts... which makes sense, as Sega's been continually scapegoating them for heavy financial losses.

You mean they had finally found someone else, beside's themselves, to scapegoat for "heavy financial losses".

 

[B E N K E]

I think Take Two will pull out now that they don't have the NFL license. Why else would they put in that clause?

 

[Shard]

Ah Sega, ever the talented artist without a hint of bussiness acumen.

 

[jarrod]

I think Take Two will pull out now that they don't have the NFL license. Why else would they put in that clause?

Naw, they'll forge ahead with other sports. NFL won't sink the whole sports line, and aquiring Venom and Indie just shows their commitment.

 

[nitewulf]

VC probably deserves TT anyway, with moderate budget from sega they produced comparable/better stuff than EA, with TT's budget who knows what limit they'll reach.
either way though, w/o the NFL license it's kinda moot...even if TT corners the other markets it's not gonna matter.
i mean perhaps they'll have the best tennis game in the market...but who'll give a sh*t? financially they'll not be at a better position.

 

[ZILLION]

...all covered. EA might have the NFL and Nascar cornnered by T2 could really take them to task on the rest of their Sports lineup. T2 only needs a really solid Soccer game now.

EA has PGA exclusive as well. They'll get the rest. Yes I know the NBA rejected EA's initial offer,but they'll get the NBA too.

what the hell did sega get out of this deal if take-two was walking away with all of the profits?

The profits for the sports series have been little to none. Once Sega caught wind of the looming NFL deal they apparently went to Plan VCB, Visual Concepts Bailout. It clearly wasn't a matter of wanting to cut sports games from their entire catelog as they secured a 5 year publishing agreement with Sports Interactive. It was obviously a matter of not believing that the US sports market would be viable moving forward,which makes sense when your competition is willing to pay above market value for exclusive licenses to sports that you haven't made a profit on. With TTWO agreeing to take on all development,marketing and distribution costs,Sega eliminates the yearly loss associated with Visual Concepts.

The acquisition of an exclusive NFL license also gives EA leverage at retail for their other sports products.

 

[kard]

They're trying to build a Sports Games portolio, but will it work? No one was able to take on EA head on in the past, and that included Sony, Microsoft, and others...

 

[jarrod]

NBA, NCAA and NHL are all pretty strong in sales over North America. NFL isn't everything after all... T2 looks to have the better "filler" sports games too. I think they do pretty well, though it's true losing NFL is a big setback.

 

[jarrod]

They're trying to build a Sports Games portolio, but will it work? No one was able to take on EA head on in the past, and that included Sony, Microsoft, and others...

Sega Sports was very competitive on Genesis, so was Sony/989 in the early PlayStation days. It's not impossible, the big ones always fall hardest.... just ask Nintendo.

 

[KiNeSiS]

Holy crap... now they have...

-NBA Basketball
-NCAA Football
-NCAA Basketball
-NHL Hockey
-MLB Baseball
-PGA Links
-Tennis
-Snowboarding
-Boxing

...all covered. EA might have the NFL and Nascar cornnered by T2 could really take them to task on the rest of their Sports lineup. T2 only needs a really solid Soccer game now.

Woah woah woah, when did Visual Concepts start developing a boxing game?
How does take two have a boxing game under it's belt?

 

[kard]

Woah woah woah, when did Visual Concepts start developing a boxing game?
How does take two have a boxing game under it's belt?

"Venom. In September 2004, we acquired all the outstanding capital stock of Venom, a UK-based developer of the boxing games Rocky and Rocky Legends. The purchase price was $1,295 paid in cash at closing. In connection with the acquisition, we recorded identifiable intangibles of $750 and goodwill of $626 on a preliminary basis."

 

[nitewulf]

on the other hand, TT is probably the worthiest adversary for EA at the moment, economically. GTA is gigantic, they own the "cool" Rock* label...they are making money right now, and they wanna ensure they keep making money.

 

[MASB]

So Sega gets none of the profit and apparently doesn't pay any money for development/marketing/distribution, etc? So basically, the games that were once the pride of Sega/Sega fans can't even be called Sega games at all anymore. That kind of sucks. Though, since it's Sega, I guess no one should be surprised.

It was obviously a matter of not believing that the US sports market would be viable moving forward,which makes sense when your competition is willing to pay above market value for exclusive licenses to sports that you haven't made a profit on.

Since I doubt Sega knew NFL/EA was going to do that, that wouldn't have been a factor at all, unless Sega is a prophet (given their history, I doubt that was the case).

 

[ZILLION]

Since I doubt Sega knew NFL/EA was going to do that, that wouldn't have been a factor at all, unless Sega is a prophet (given their history, I doubt that was the case).

Of course they knew. So did Sony. So did Microsoft. Even if the NFL knew that nobody would top EA's offer,they'd still entertain other offers. Besides,it's been confirmed that they did.

 

[jarrod]

Besides,it's been confirmed that they did.

???

Where?

 

[tlj101010]

NBA, NCAA and NHL are all pretty strong in sales over North America. NFL isn't everything after all... T2 looks to have the better "filler" sports games too. I think they do pretty well, though it's true losing NFL is a big setback.

I don't have any numbers, but maybe someone else does or knows where to look for them. But, I though football games sold more than NBA/NHL/NCAA games combined? I thought the only sport competing with football was soccer, and that's only in world market comparison.

I'm sure someone can (and will) correct me if I'm wrong..

 

[ZILLION]

???

Where?

Well it's common sense that you take multiple offers when putting a license up for bid but I do have confirmation. There's another story with a more specific quote about the number of bids but I couldn't find it.


http://www.dfw.com/mld/dfw/business/10478636.htm?1c

The NFL did not set out to create an exclusive licensing agreement but was uncomfortable having its resources split among multiple video licensees, said Brian McCarthy, a league spokesman. McCarthy said the league notified licensees and other potential partners in the spring that it would re-examine the segment.

"The NFL listened to all the other offers on the table and chose to go with EA," Miller said.

 

[kard]

EA and NFL Players Inc almost signed a deal back in May. The news leaked out and was published in a reputable sporting business magazine. The lawyers probably screamed that this would invite all kinds of lawsuits if it went through, so they told everyone to deny everything. They told the NFL and the Players, Inc. to put out a "bid" knowing full well they prefer EA and knowing full well how much EA is willing to pay...

 

[UbiSoftologist]

EA-NFL exclusivity deal = less bargaining power for Sega = T2 going to acquire VC for cheap

As Philip Fisher said, ''From disaster, opportunity springs,'' the EA-NFL agreement might not be totally bad for T2.

 

[FitzOfRage]

EA and NFL Players Inc almost signed a deal back in May. The news leaked out and was published in a reputable sporting business magazine. The lawyers probably screamed that this would invite all kinds of lawsuits if it went through, so they told everyone to deny everything. They told the NFL and the Players, Inc. to put out a "bid" knowing full well they prefer EA and knowing full well how much EA is willing to pay...

Why would that trigger any lawsuits as long as they let their existing deals run out?

And also, it makes sense that the reason it leaked out in the first place is because the NFL had already been shopping the deal around by that point, rather than limiting talks to just EA.

EA-NFL exclusivity deal = less bargaining power for Sega = T2 going to acquire VC for cheap

As Philip Fisher said, ''From disaster, opportunity springs,'' the EA-NFL agreement might not be totally bad for T2.

I agree. I don't think this means T2 won't buy VC, I think it means they'll get them at a much better price than they would have otherwise. The whole point of the deal for Sega was to build up the ESPN sports brand to prime VC for a sale in 2006. And somewhere around August it looked like they were on their way to do that.

 

[FitzOfRage]

Anyway, I remember there was some debate as to how much money Sega was making off of the success of the games, and I guess that's settled now. And it also confirms what many have said all along. The "co-publisher" title was mostly just a face saving moniker to avoid calling them useless.

Maybe Anihawk won't have to deal with people demanding the ESPN titles getting counted as Sega games in his sales threads now that we know definitively Sega gets nothing from them.

 

[DarienA]

EA-NFL exclusivity deal = less bargaining power for Sega = T2 going to acquire VC for cheap

EA and T2 conspired to get VC for T2 on the cheap!

 

[retardboy]

Since when was Kush a subsidiary or VC?

 

[UbiSoftologist]

I don't think this means T2 won't buy VC, I think it means they'll get them at a much better price than they would have otherwise.

Interesting consequences of the T2-Sega alliance:

1) EA overpaying for an exclusive license with NFL

2) T2 going to obtain a bargain from Sega

 

[ZILLION]

Interesting consequences of the T2-Sega alliance:

1) EA overpaying for an exclusive license with NFL

2) T2 going to obtain a bargain from Sega

You forgot 3)EA poised to dominate sports games. You can't be a major player in the sports arena without football. Period. I don't care how well next years football game plays,it has zero chance of doing anything significant at retail and the other sports games won't make up the difference,and that'sif EA doesn't acquire licenses for those as well before they came out.


Imagine if the roles were reversed. Let's pretend Sega had said that they were paying for all the development,marketing and distribution of all future VC sports games with an option to purchase VC at the end of the deal. Let's say TTWO were the ones who got Sega to agree to this deal right before EA obtained NFL exclusivity. There'd be 100 Sega-owned pics in this thread faster than you can say Challenge Everything. Nobody would be calling it a bargain.

 

[jarrod]

Nobody would be calling it a bargain.

Oh, I think you might.

 

[radioheadrule83]

"Venom. In September 2004, we acquired all the outstanding capital stock of Venom, a UK-based developer of the boxing games Rocky and Rocky Legends. The purchase price was $1,295 paid in cash at closing. In connection with the acquisition, we recorded identifiable intangibles of $750 and goodwill of $626 on a preliminary basis."

Rocky is one of the best games I own as well. That's ultra cheap. Unless I'm missing something.

 

[SolidSnakex]

TT can get VC to finnaly make a sequel to "One".

 

[kard]

You forgot 3)EA poised to dominate sports games. You can't be a major player in the sports arena without football. Period.

TT doesn't want to be a major player, they probably just a piece of the pie.

All they need is to have Rockstar and VC work together on Grand Theft Football.

 

[UbiSoftologist]

TT doesn't want to be a major player, they probably just a piece of the pie.

Exactly. The competition between EA and T2 in the sports arena is not necessarily a zero-sum game. The sports market is large enough for 2 players to co-exist.

All they need is to have Rockstar and VC work together on Grand Theft Football.

''Rockstar Sports'' would be a powerful brand to challenge ''EA Sports.''