Take-Two's Bad Call

Meanwhile, Sony plans to release the PS3 version of the title on May 15. "Sony's game has sold really well," says Pachter. "And that's a problem for Take-Two. Their exclusive license isn't all that exclusive."

Pachter says that Take-Two's new management may have its heart in the right place when thinking about diversifying the company's product portfolio through sports games, but the odds are against the company's gaining significant market share or becoming anything more than a bit player.

"EA has been trying to sign a baseball exclusive for a long time, and it is going after an exclusive NBA deal, too," he says. "If it succeeds, then Take-Two can kiss its sports business goodbye."

That's why Take-Two could fare better devoting its resources to developing more strategy games, a genre in which it found its biggest hit, Grand Theft Auto, or shooter games along the lines of Activision's Call of Duty, which have become megahits.

Take-Two could leverage its strong development team in these areas, while at the same time avoid setting itself on a collision course with a huge competitor, says Wall Street Strategies' Sozzi.

Still, it might be premature to write off 2K Sports, says Billy Pidgeon, an analyst with research firm IDC. "Their internal development team is very talented, and they do have the chops to take on EA with game design and execution," he says.

"It is entirely possible to challenge EA on nontraditional sports."

Pidgeon also suggests that sports leagues might be moving away from an exclusive licensing model. "There's more opportunity for them if they have several publishers bidding for their IP," he says.

But that only underscores the case against 2K Sports. 2K Sports can't win at the game right now; it has a shot only if the rules change.

>To order reprints of this article, click here: Reprints