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This excerpt taken from the ATVI DEFA14A filed May 27, 2008. Question: How come you haven’t made a bid for take
two yet?
Thomas: Well I’m not going to speak for any specific company, but a couple of things. One, our capital structure does not really impact the way we think about investments. Either an investment makes sense because it delivers a return or it doesn’t whether we have to go finance it with that or we use cash on the balance sheet or we issue stock, is a secondary consideration. The asset needs to make sense on its own. As I said the same criteria apply right, there needs to be proven intellectual property, proven development talent, and etc. etc. like I rehearsed earlier. So now whether the tender offer is subscribed or not, it doesn’t really change the way we think of our strategy. We always said we want a broad and balanced portfolio, proven intellectual property, and arguably we have a significant cash balance which previously didn’t burn a whole in our pocket. We continue to be very disciplined financially. If you look at what we paid for companies such as RedOctane or Bizarre these are numbers that actually make sense and we’re not going to change that no matter what our capital structure is going to be.
Michael: Actually my last question is you don’t compete in the Grand Theft Auto genre whatever that is, the open world racing driving genre. Does that make sense for you if EA does not actually succeed with its acquisition to actually do the same thing you did with Call of Duty which is essentially poach the team that made Medal of Honor, create a better product and go from there?
Thomas: You know it’s no secret that we always like to extend our top talent development studios, and I think if you look at the success we’ve had, the studios are happy being part of the Activision portfolio because we had from the getgo an independent studio strategy where we leave them the creative freedom there own culture, they don’t have to use all #2 pencils and so on and so forth. And as a result we get great creative output, while at the same time all of our studios are incentivized based on operating income. So we have an incentive system in place to make sure we are doing the right things, we focus on the big opportunities, we don’t wait on
expenditures that don’t matter to improve the game. And that’s been working for us and any AAA developer that is ready to sign up for that, we are always open to welcome to the Activision family.
Michael: Thank you for giving us so much time
Thomas: My pleasure.
Michael: Thank you everyone for attending.
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