Video game developer Take-Two Interactive Software (NASDAQ:TTWO) announced yesterday that it had completed the acquisition of TDK Mediactive. However, removed from the Sept. 3 deal were the video game publishing rights to any future versions of Shrek. That, along with general industrywide pessimism over holiday video game sales, sent Take-Two shares down another 7% to $31.67.

Shrek would have been the biggest license in the acquisition, which cost Take-Two approximately $22.5 million overall, including $5.4 million in restricted Take-Two common stock, $9.7 million of which was in liabilities to TDK USA, TDK's former parent company. Offsetting the removal of the Shrek license from the deal was an $8 million reduction in liabilities to TDK Mediactive under terms of the distribution agreement announced in September.

Activision (NASDAQ:ATVI) holds co-publishing rights to the next Shrek game. Including Shrek, TDK Mediactive said it had $42 million in revenue.

Here's the thing. Take-Two is known for the violent, edgy, mature nature of its video games -- including the famed Grand Theft Auto (GTA) series, State of Emergency, and the recently released Manhunt. The latter two hardly have mass appeal, and Manhunt is definitely not for the kids.

What TDK brings is a softer side with a little more mass appeal -- titles based on Disney (NYSE:DIS) licenses such as The Haunted Mansion and Pirates of the Caribbean. The Muppets license is definitely for the kids.

So even without Shrek, Take-Two now has a more well-rounded lineup. And this acquisition is just the latest in a consolidation wave that will likely continue, as the bigger players in the industry -- including Electronic Arts (NASDAQ:ERTS), Activision, and Take-Two -- continue to snap up some of the smaller, financially troubled developers.

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Jeff Hwang can be reached at