PolyCast Episode 41: "The Evil Empire"

[Heraclitus]

Originally posted by Locutus
Next time you talk about stock prices and take-overs, you may want to consider having someone on the show that actually knows anything about the topic -- I by no means claim to know much about it myself but even I was embarrassed by your ignorance

Heck I sure never claimed I was. The truth is the subject was supposed to be one minor topic of many, and while recording we kind of lost track of time and had to skip some of the later ones. In any case where would polycast end up if people called us out when we were wrong?

Are people actually expecting expert opinions? Its a runing gag of the show to meniton DanQ's civing expertise or lack of there of. So the strategy advice one might hear on the polcycast is subpar to just diging up threads on poly. Do I even need to point out how true this is much much more true of something like stock market advice Analysis ?!

This isn’t a financial podcast, its supposed to be a podcast for gamers made by gamers (well it will be, when Imran eventually picks up on the whole civ4 thing). That’s how I understand the whole thing, or that is the impression I got from listening to previous episodes. If its the wrong impression then something is very wrong with all of the polycast productions (polycast, the specials, modcast, OTcast ).

Originally posted by Locutus
Sure, T2's stock price is ~$25 now, but what do you think will happen if the EA merger doesn't go through? ~$15 is the real value of T2 stock, so as soon as this merger thing blows over (which it won't, but hypothetically speaking) the stock will immediately drop back down to that level. It's called artificial inflation.

Duh? We were simply using common sense, and I think we even explicitly mentioned, that the EA offer cause such a spike in the price. If it hadn’t EA would have made a lower offer wouldn’t they? They had to factor in their own effect on the price when offering the price. All we ever said was that the price offered by EA post GTA was out would be better than it is now. Surely you can’t argue with that? Unless somehow releasing megahits hurts stocks or reduces company value? Like I said, though I’m no expert.

Originally posted by Locutus
EA really needs to get this deal done before GTA4 comes out and T2 is using that ticking clock to bully them into sweetening the pot even more (no pun intended), but there's no doubt $26/share is a very sweet deal as it is...

Again, we mentioned this. We said they were waiting for "mo money". No one ever tought differently, just polite phrasing and a certain train of tought are needed not to appear to coarsed or rushed to the audience. Sure its a sweet deal, but its not the sweetest deal possible, and any stockholder can see that. Maximising profits is what dabbling in stocks is all about. Some people want to play it safe (the ones who are considering or have commited to selling) and some others hope to pragmatically take advantage of such situation in pursuit of additional sources of cash flow, hoping for the best of both worlds (the guy who sued).

Originally posted by Locutus

Also, GTA is possibly the biggest and after WoW the most profitable franchise in gaming, nothing else T2 owns even remotely comes close in terms of monetary value, not even Bioshock or Civ (which was sold for only $22m last time it was on the market while GTA is estimated to be worth over a billion) and certainly not the 2K Sports line-up: the only reason EA would be interested in the latter is to put them out of business -- EA has its own very strong sports brand and 2K is the only company competing with them in this field, they might raid them for the best developers but otherwise they'll most likely just cut the entire brand. So yes, it makes perfect sense that people aren't talking about Civ and other 2K franchises nearly as much as they are about GTA. For all intents and purposes, T2 is GTA.

This would be perfectly true from a financial POW, but the people who commented the situation were gamers. And I’m willing to wager that the Civ series has had a major impact on the TBS, and God-game genera and is otherwise a successful and profitable game series and might be if held by many other (smaller) companies, be a primary asset. But that is not the point, the game has a big fan base, a fan base as you later in your post eloquently put is a bit “behind” in certain trends. I just found it odd that no civ EA basher appeared. It was also odd not to hear anything from the Biocshock fan base or the Sports fan base. In any case my comment was more a refection on the two sites.

Originally posted by Locutus

Fierabras is also quite right in that EA isn't nearly as evil anymore as it used to be, which is fairly widely known in the games industry but of course here at Apolyton we tend to be a little behind on the facts They're quite good about how they treat their developers now, they no longer shallow them whole and destroy any cultural distinctiveness to add it to their own, Borg-style. They realised some time ago that this is quite counter-productive and now make a big deal out of giving a high degree of autonomy to developers, just ask Will Wright.

True, true on many counts but I prefer to sell out to the smaller corporation. The more powerful and larger a corporation is the larger the possibility and probability of it in the future abusing its superior market position. And even more importantly getting away with such abuse, leaving very little the average customer or even courts can do.

Originally posted by Locutus

EA still does some things that are quite questionable from a gamer's point of view, like charging for weapons as DLC in Battlefield and hugely inflating the European retail price of Rock Band, but in this they're no more evil than say Activision or T2. Many people would've agreed with the 'Evil Empire' analogy a few years ago, but now they're really no more evil than any other major corporation -- I think 'somewhat evil' or 'necessary evil' would be a better description

The Slightly Evil Empire doesn’t sound as catchy.

Neither does The Empire formerly known as Evil and The Now much less evil company or the company being unfoundedly slandered as the Evil Empire.


We could have call it the evil company but in my opinion that sounds a bit too serious and might be taken more literally. I mean I know when I see a title like this in the media I expect a humorous interpretation or a less than perfectly serious discussion.

Originally posted by Locutus

(horse armour anyone? )

Horse Armour was evil, but it was useless and can never compare to the pure evil of the Sims expansion packs.

[Heraclitus]

As to the EA being evil, they stopped SMAC2 from happening.

I don't care if they donate 25% of their profits to the rehabilitation fund dedicated to African AIDS- afflicted orphans who were forcibly pressed into militias, untill SMAC2 comes out, they can spend their afterlife in a very warm place for all I care.

[Heraclitus]

Originally posted by Locutus
(but that might just be because he wants to make SMAC2 )

To be honest I'm still hoping against hope that once the acquisition comes through, EA would consider such an effort and eventualy make a good sequel to the best game ever made.

[Locutus]

Originally posted by Heraclitus
Are people actually expecting expert opinions?

If even I know about it it's hardly an expert opinion

Duh?

If it's so 'duh', why didn't you bring it up on the show? You guys were speculating the raise in T2 stock would now force EA to up their offer even more to $35-40 just because of this artificial inflation. EA and T2 both know the current price doesn't reflect T2's actual worth.

They had to factor in their own effect on the price when offering the price.

No, they didn't. This artificial inflation is temporary and only lasts as long as the merger negotiations, it doesn't affect the actual value of T2 in any way and won't affect EA's bids. Everyone knows the value will drop back to its old level the minute these merger talks are over.

All we ever said was that the price offered by EA post GTA was out would be better than it is now. Surely you can’t argue with that?

Actually I can. The price EA is willing to pay depends on how much money they can get out of T2 and how soon. Pre-GTA, they'll know they'll make a sh*tload of cash almost immediately after the takeover, earning back a major portion of their investment. Post-GTA, who knows where that money will go? If T2 decides to pay dividends to their stock holders or something like that that would actually decrease the value of the company to EA, it'll take them much longer to earn back their $2b investment.

What will happen to the value of T2 depends greatly on just how big of a hit GTA is and what T2 decides to do with the revenue it generates. Anything could happen, really.

Again, we mentioned this.

Again, no you didn't

Sure its a sweet deal, but its not the sweetest deal possible, and any stockholder can see that.

It is according to Pachter, but yes, that is what T2 is trying to do.

This would be perfectly true from a financial POW, but the people who commented the situation were gamers.

You were talking about a financial takeover, that has nothing to do with gaming community and the impact the Civ series has had on that in the last 20 years.

To the parties involved, Civ and its fanbase are peanuts and TBS is a very niche market for a company the size of EA. It's nice that it has a good reputation and having it in their lineup will make them look good, but it just doesn't generate a whole lot of revenue. Next-Gen recently released a top 100 of best-selling games of 2007 and BtS wasn't even in it. Civ4 was probably in the top 100 of 2005 but almost certainly somewhere towards the bottom of the list. It's a great franchise for us strategy gamers but it just can't compete with the big boys.

[Heraclitus]

Originally posted by Locutus
If even I know about it it's hardly an expert opinion

So many people could say that about soo many episodes of various polycast productions that it isn't even funny.

But, despite this they are good shows for the most part.



As to the rest, I really don't want to make this into a flame war. I don't have the energy or desire for one.
All I will say is that you are making a raging hoard of stomping elephants out of one crazy little mouse that could really hurt you if it bit. But at the end of the day it's still just a mouse.

[Robert]

Locutus: $15 is the real value of T2 stock

There's no 'real' value of stocks, except the actual value.
If $26 p/s is what EA wants to pay for T2, then that's the value. period.
Sometimes stock are 'undervalued' and only boost to their real value when another company wants to take them over.

Since the price per share was still about 50 cent below the EA bid when we made the show, we can conclude that apparantly many people aren't sure if the EA bid will be accepted. Otherwise the price would be 1 or 2 cents below the bid.

Next time you talk about stock prices and take-overs, you may want to consider having someone on the show that actually knows anything about the topic

I haven't heard the show yet (I'm on vacation, browsing through a cellphone connection right now) and I don't know how much from me came into the final cut.
I won't claim at all that I'm very knowledgable about this item, but I have some clues about shares and stocks since I'm listening to business news radio everyday
I just didn't feel like talking a lot about it on the show. I don't value my knowledge to be very good and I wonder what the real interest is of these things on a gamesite-podcats.

I think the talking we did about the topic was fine. Just some chatting by people who enjoy the game and wonder what'll happen with the company, not being hindered by any knowledge (sic?).

Maybe all things we said were wrong, so what?
It was right, because it showed how normal casual gamers look at these things. It's not a stock-market podcats.

Oh, and regarding the price again, sure, some knowledgable person may say it's a good price. And there's always another knowledgable person who says it's a bad price. Never trust anybody as long as you don't know how many shares or puts he has in the share that's being discussed

[EPW]

[Heraclitus]

Originally posted by EPW

[Murg]

Originally posted by Locutus
Next time you talk about stock prices and take-overs, you may want to consider having someone on the show that actually knows anything about the topic -- I by no means claim to know much about it myself but even I was embarrassed by your ignorance Sure, T2's stock price is ~$25 now, but what do you think will happen if the EA merger doesn't go through? ~$15 is the real value of T2 stock, so as soon as this merger thing blows over (which it won't, but hypothetically speaking) the stock will immediately drop back down to that level. It's called artificial inflation.

Micheal Pachter happens to be one of the biggest financial experts on the video game industry (and an avid gamer of both console and PC games ) and he's quite right that $26/share is an extremely good price for T2. They've been struggling for years to make a profit (remember the whole board debacle of last year?) and no one else is gonna buy them anytime soon, certainly not at that price. GTA4 might give their stock a boost for a while, but it's not like T2 has anything else on the horizon to follow that up with (that we know about), eventually their stock will drop back down again to somewhere near that ~$15 line. So for the shareholders this really is a very good deal. (If it is for gamers or developers is another matter entirely but, as Imran points out, as a publicly traded company the T2 board is legally required to maximise profits for their shareholders, regardless of just about any other concerns.) EA really needs to get this deal done before GTA4 comes out and T2 is using that ticking clock to bully them into sweetening the pot even more (no pun intended), but there's no doubt $26/share is a very sweet deal as it is...

Also, GTA is possibly the biggest and after WoW the most profitable franchise in gaming, nothing else T2 owns even remotely comes close in terms of monetary value, not even Bioshock or Civ (which was sold for only $22m last time it was on the market while GTA is estimated to be worth over a billion) and certainly not the 2K Sports line-up: the only reason EA would be interested in the latter is to put them out of business -- EA has its own very strong sports brand and 2K is the only company competing with them in this field, they might raid them for the best developers but otherwise they'll most likely just cut the entire brand. So yes, it makes perfect sense that people aren't talking about Civ and other 2K franchises nearly as much as they are about GTA. For all intents and purposes, T2 is GTA.


Fierabras is also quite right in that EA isn't nearly as evil anymore as it used to be, which is fairly widely known in the games industry but of course here at Apolyton we tend to be a little behind on the facts They're quite good about how they treat their developers now, they no longer shallow them whole and destroy any cultural distinctiveness to add it to their own, Borg-style. They realised some time ago that this is quite counter-productive and now make a big deal out of giving a high degree of autonomy to developers, just ask Will Wright. Riccitiello's DICE speech that Fierabras refers to is a case in point here, and people like Ken Levine and even Sid Meier have recently come out of the woodworks to say they wouldn't mind at all if EA bought up T2, Sid in fact even said he's looking forward to it IIRC (but that might just be because he wants to make SMAC2 )

EA still does some things that are quite questionable from a gamer's point of view, like charging for weapons as DLC in Battlefield and hugely inflating the European retail price of Rock Band, but in this they're no more evil than say Activision or T2 (horse armour anyone? ) Many people would've agreed with the 'Evil Empire' analogy a few years ago, but now they're really no more evil than any other major corporation -- I think 'somewhat evil' or 'necessary evil' would be a better description

Other than that, good show

I dont know that having real information about a topic should be a requirement for discussing it (if so we may never hear from Dan again ). The people had their personal opinions about the buyout and, like you, I disagreed with most of them. Specifically I dont think the EA buyout wouldn't negativly impact major franchises like Civ (and yes I hated seeing what they did to the ultima and Wing Commander series back in the day, but this isnt the same EA).

I also disagree that GTA is the nest biggest series after WoW. There are some serious movers in that space (Madden, the Sims, Halo, Guitar Hero) and even though GTA is the news of the day because of their release later this month (and it will be a MASSIVE release) I doubt by the end of the year it will do the numbers of some of these other franchises. Some games kill on opening weekend, some take time to get around. It really depends on if you appeal to hard core or more casual gamers that dont buy on release day.

Outside of those little picks I think we are on the same side. Take2 will go to EA for somewhere around 26, a 64% percent premium on a company that isnt exactly killing the marketplace is a very good thing (and exactly as you state the current price is from people buying on speculation).

Plus it will put Soren back under the same umbrela as the Civ license, and that is always a good thing.

edit: Additionally CyberShy was very funny in the episode, definitly a good find to have on as a guest.

[Nugog]

Umm - just listening now - and if The Priest has stated that he is playing with Agg Ai - does that notmean he is playing BtS?

[Nugog]

Good espisode though!

Wittlich + Nukes =

[Heraclitus]

Originally posted by Nugog
Umm - just listening now - and if The Priest has stated that he is playing with Agg Ai - does that notmean he is playing BtS?

Wasn't it introduced in a late patch to vannila? Or to Warlords? I'm think the option has been there for a long time.

[DanQ]

Originally posted by Nugog
Good espisode though!

[Robert]

edit: Additionally CyberShy was very funny in the episode, definitly a good find to have on as a guest.

because of or despite my denglish?

[Murg]

Originally posted by CyberShy

edit: Additionally CyberShy was very funny in the episode, definitly a good find to have on as a guest.

because of or despite my denglish?

I assumed it was the alcohol.