Why This "Bioshock" to Take-Two's System Might Be Good Over the Long Haul

A sad day for Irrational Games might end well for Take-Two Interactive (NASDAQ: TTWO  ) , Fool contributor Tim Beyers says in the following video.

First, the bad news. After 17 years, Irrational Games, the Take-Two studio subsidiary responsible for the megahit Bioshock Infinite, is shutting down. Talented people will be laid off, which stinks. Yet Tim says there's hope to be had in what Irrational co-founder Ken Levine has planned.

Writing in a blog post, Levine said he plans to start anew inside Take-Two with a skeleton team of just 15. Together, they'll be working on what he describes as "narrative-driven games for the core gamer that are highly replayable." How that will manifest isn't entirely clear at this point, though Tim says it seems like a massive undertaking.

Importantly for investors, Levine said he was "prepared" to jettison from the company he founded and create a new start-up. Take-Two instead convinced him to develop the project as an employee, as if he were an entrepreneur in residence at a venture capital firm. Tim says that's a hugely bullish sign, reflecting Take-Two's willingness to bet on proven innovators.

In the meantime, Levine said that unwinding Irrational will involve attempts to place those laid off with other Take-Two or external studios and provide financial support as developers prepare their portfolios and seek new gigs elsewhere. A bummer, certainly, since layoffs are always a bad outcome. Yet there's reason to be optimistic amid the fallout from Levine's ambitions. In trying to create something radical, his efforts may prove beneficial not only to Take-Two investors, but also to an industry that needs as much innovation as it can get.

Now it's your turn to weigh in. Are you enthusiastic about what Levine has planned, or would you rather Take-Two stuck with Bioshock? Please watch the video to get Tim's full take on the news, then leave a comment to let us know where you stand, and whether you would buy, sell, or short Take-Two Interactive stock at current prices.

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  • Report this Comment On February 20, 2014, at 9:45 PM, Corsair3117 wrote:

    A report that points out that TTWO (finally?) "gets it". They are thinking a bit out of the box and, additionally,

    betting on the right people. They realize that in a sector dependent on creativity that a lean-and-mean in- house think tank of potential Big Title game producers will turn out the next blockbuster or two that will smooth out the peak and valley revenue history and finally earn the valuation that the skeptics have denied TTWO. And I'm betting on it being sooner, rather than later. Augmented by a the focused plan the CEO laid out to maximize the reach of GTA- this company is ready to make big noise in the intermediate and long range

  • Report this Comment On February 23, 2014, at 12:18 AM, nenhob wrote:

    Tim,

    I think TTWO will "stick" with BioShock, and I think that is more than apparent in Levine's letter... "I’m handing the reins of our creation, the BioShock universe, to 2K"

    There will be another BioShock, but it won't be made by irrational. Your thoughts?

    Also, was curious about your view of E3 this year. TTWO will actually be there this year and Evolve seems to be getting just as much next gen hype as titanfall, yet TTWO acquired the IP for only 10 million from bankrupt THQ. Also, unannounced GTA PC/next gen give tremendous upside to fy15 as much of Dev costs have already been amortized. Any thoughts on the pipeline?

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