Play Nice Like Electronic Arts

CHICAGO -- In a head-on match up, you wouldn't put your money on 72-year-old football commentator John Madden vs. a horde of car-thieving thugs.

But in the videogame world, it looks like Madden may come out on top. Electronic Arts (EA Quote), publisher of the hugely successful Madden NFL video games, looks like it's poised to take over Take-Two Interactive Software (TTWO Quote), which distributes the controversial but very successful Grand Theft Auto.

For months, EA had been on the offensive, threatening to pounce on its rival through a hostile takeover. But this week, EA backed off, opting to pursue private, more conciliatory talks instead. Today, a merger looks more likely than ever.

What can your business learn from EA's strategy? To really get what you want, playing nice can pay off. Especially when your most-valuable assets are people as much as products.

This potentially massive merger highlights the enormous scope of the video-game business -- even if that industry still doesn't get the respect it deserves. Despite a lingering reputation for geekiness and complaints about some games' violent content, gaming is one of the few economic bright spots in the economy these days.

"Historically, video games have always been able to buck a recession," says David Riley, director at market research firm The NPD Group. "It's one of the few industries able to manage that kind of success."

A recent NPD report found that video-game sales are up 35% over last year, to $9.5 billion. (PC games, which are played on a computer rather than a console hooked up to your TV, are a separate, $1 billion business.) Although average retail prices for games range from $40 to $60, they have become so intricate that many offer up to 100 hours of game time, making them a more cost-effective entertainment than movie tickets or DVDs.