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Take-Two buys Sega sports game units

Take-Two Interactive said it bought Sega Corp.'s California-based sports video game studios Visual Concepts and Kush Games.
/ Source: Reuters

Video game publisher Take-Two Interactive Software Inc  Tuesday said it has bought two sports game development studios from Sega Sammy Holdings for about $24 million in cash.

The purchase of Visual Concepts Entertainment and Kush Games includes the rights to the 2K sports video game brand. Take-Two said it would establish a new publishing label, 2K Games, that will include Visual Concept and the recently acquired Microsoft sports games studio, Indie Built.

Take-Two recently said it was negotiating to acquire Visual Concepts under an option it had as part of the deal it entered into with Sega in 2004 to jointly publish and market sports games.

“We believe that the price paid is exceptionally low, given the large number of high quality sports games produced annually by the Visual Concepts studio,” Wedbush Morgan analyst Michael Pachter said in a note.

The move, which many analysts had doubted would happen in the first half of the year, if ever, marks Take-Two’s commitment to sports gaming despite two high-profile license losses.

In December Electronic Arts Inc.  signed an exclusive five-year license with the National Football League and its players union, giving EA the sole right to publish video games with official player, team and stadium names, colors and likenesses.

Sega and Take-Two’s “ESPN NFL 2K5” had been the strongest competition in years to EA’s dominant “Madden NFL” franchise, taking a market share of about 40 percent on a units basis, though at a sharp price discount.

Last week, EA signed sports broadcaster ESPN away from Take-Two, inking a 15-year deal starting in 2006 to use the network’s brand, graphics and personalities.

But on Monday the players union for Major League Baseball said it had struck an exclusivity deal with Take-Two, making it the only independent publisher -- outside the console manufacturers themselves -- licensed for baseball games.

Analysts said the sports wars were far from over yet.

“We believe this will also be an indication that (Take-Two) will continue to pursue other sports titles, despite (EA) recently (signing) long-term deals with the NFL and ESPN,” American Technology Research analyst P.J. McNealy said in a note.

Sega and Take-Two said they also are in talks for Sega to publish and distribute the 2K series of sports titles and other Take-Two games in Japan and elsewhere in Asia.