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The jury is still out on whether or not Take-Two Interactive Software Inc.'s (TTWO) "Grand Theft Auto IV" has met analysts' expectations in outselling Microsoft Corp.'s (MSFT) marquee "Halo 3," a game that set sales records last September.
But if "GTA4" does meet with the commercial and critical success that's been so highly anticipated, it could significantly shift the balance of power in takeover discussions, or a lack thereof, between Take Two and rival Electronic Arts Inc. (ERTS).
EA, owner of the ever-popular "Madden NFL" and "The Sims" franchises, originally made a $2 billion (or $26 per share) offer for Take-Two, a company that has posted losses for more than two straight years. However, that offer was lowered to $25.74 after Take-Two investors approved an incentive plan that granted more stock shares to company executives, increasing the number of shares EA would have to buy.
Take-Two has been banking the popularity of "GTA4" to increase its leverage in discussions, which it has postponed until after the games release. If "GTA4" proves to be worthy of the buzz surrounding its release, Take-Two will have significantly more leverage when it finally enters into discussions with the world's largest game publisher.
"April 29 has been a key date with respect to discussions," Take-Two Chief Executive Officersaid in an interview with Bloomberg. "We've repeatedly said that the full commercial potential of ‘GTA4' will only be evident after the launch."
The game, as well known among parents as young adults for graphic violence and sexually charged content, went on sale Tuesday. First week revenue is expected to reach $360 million, topping industry standard "Halo 3" by approximately $60 million. The game's publisher thinks it can do substantially better because unlike Halo, which is only available on Microsoft's Xbox 360 consol, "GTA4" can be played on Sony's (SNE) PlayStation 3.
Early indications have been positive. The game has registered an average score of 99% on review aggregator Metacritic.
"Rockstar's magnum opus is a modern-day masterpiece that could change the way the world views video game," GameSpy, a popular video game Web site gushed. And the New York Times has referred to the game as "a violent, intelligent, profane, endearing, obnoxious, sly, richly textured and thoroughly compelling work of cultural satire disguised as fun."
Shares of Take-Two Interactive fell 39 cents or 1.46% yesterday (Wednesday) to close at $25.24.
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