As we said in today's announcement, former guest poster Justin Blankenship has graciously agreed to join Level Up's select stable of monthly columnists. In his first post, he applied the insights he gained during his 2001-2004 tenure in the Federal Trade Commission's Mergers 2 division in Washington, D.C., to suss out the antitrust implications of Electronic Arts' intended purchase of Take-Two Interactive. Blankenship declared that the the FTC would likely take a hard look at the deal, and while some were skeptical of his analysis, he was proven right last week when his former employer issued a Second Request for more information on the proposed deal. In his debut monthly column, Blankenship returns to the EA/Take-Two imbroglio to answer some questions that others raised in response to his earlier post and shed some light on the thought process behind the FTC's recent decision. read on.

First of all, thank you to everyone who read my piece about EA's potential acquisition of Take Two, and especially to those of you who took the time to cover the piece or otherwise comment on it. Now that the FTC has issued a Second Request to EA and is clearly taking a hard look at the merger, this seems like a good time to recap where this deal is, and follow up on some interesting points that were raised.

1. "What is a 'Second Request' and what does this mean for EA/Take Two?"

A little background on how the merger review process works is helpful here. Under a law called the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR), any merger or tender offer that exceeds a certain monetary threshold is required to file a Notification and Report Form with both the FTC and the Antitrust Division at the Department of Justice. The Form includes a description of the deal, the parties to the deal, and attaches certain documents relevant to the deal for government review.

Most importantly, the HSR filing starts a 30-day clock running for the government to review the deal during which it is illegal to consummate the merger. The vast majority of deals go through after this 30-day period, or even earlier if the parties have requested an "early termination" of the waiting period.

A much smaller percentage of deals, however, present some competitive concerns that require that the government investigation extend beyond the 30-day waiting period. Those deals receive what's called a "Second Request"--which is what EA got on April 17th.

To read Blankenship's column in its entirety, click on the link below.

 DVD cover for the 1995 film "The Usual Suspects," courtesy MGM

Over the Christmas break, we took some time to reflect on what changes or additions we could make to improve the blog. One of those concepts was Page 110, which debuted today. Another, which has also been some time in coming, was to add monthly columnists. We've always done our best to incorporate other voices into the mix here at Level Up, whether it's people who work in the videogame industry in some capacity in Outsourced, or interested outside observers in P2P. But in those cases where our blog opened up conversations among ourselves and a handful of gifted, thoughtful writers, we felt compelled to expose those voices to our modest but influential audience--you.

Our first official column, titled The Law and the Short of It, is penned by someone who should be no stranger to close readers of Level Up: Justin Blankenship, former Federal Trade Commission lawyer and current stay-at-home father. From Fall 2001 until early 2004, Blankenship worked in the FTC's Mergers 2 division in Washington, D.C., which reviewed mergers in the chemical, technology, and entertainment fields for potential violations of Section 7 of the Clayton Act, in search of potential anti-competitive concerns that would hurt consumers. So as part of his division's jurisdiction, he examined similar mergers while at the FTC. Blankenship sent us an email expressing his opinion that the FTC would take a hard look at the EA Sports/2K Sports part of this deal for antitrust reasons; we requested that he expand his thoughtful email into a full post, and based on his superlative work, we asked him to join our first wave of monthly columnists. Click here to read Blankenship's debut column, and be sure to check back later today for the premiere of our second opinionator.

 

Here at Level Up, our inbox is chock full of press releases, PR pitches, notes from my editors, a fan mail or two, and the occasional bit of Viagra spam that slips through our email filters. But every so often, something genuinely compelling comes across the transom--so compelling, in fact, that we have no choice to share it with you. In February, we appeared on the G4TV show X-Play to discuss Electronic Arts' bid to acquire Take-Two. A viewer of the program, Justin Blankenship, is also a regular reader of Level Up, and he wrote us to share his thoughts about the deal. His words were sufficiently compelling that we asked him to shape them into a formal post, which we present to you following our introduction.

What made Blankenship's opinions particularly intriguing is that from Fall 2001 until early 2004 he was employed as a lawyer at the Federal Trade Commission in Washington, D.C. More specifically, he worked in the Mergers 2 division, which reviewed mergers in the chemical, technology, and entertainment fields for potential violations of Section 7 of the Clayton Act, in search of potential anti-competitive concerns that would hurt consumers. So as part of his division's jurisdiction, Blankenship examined similar mergers while at the FTC, and in his email to us, he expressed his opinion that the FTC would take a hard look at the EA Sports/2K Sports part of this deal for antitrust reasons. " Although you've yet to see antitrust law rear its head in a videogame merger, this is the best case I've seen where it could happen," Blankenship says below. Read on to find out why EA could have more problems on its hands than just Take-Two's wily CEO Strauss Zelnick and the merry band of arbitrageurs holding out for a higher sale price.

There seems to be a lot of chatter in the videogame industry about the inevitability of Electronic Arts' takeover of Take-Two. Although EA's offer may eventually prove too lucrative for Take-Two to pass up, I wouldn't assume that this deal will get a rubber stamp from government antitrust regulators. I'm specifically referring to comments by Wedbush's Michael Pachter, who stated: "Currently [EA and Take-Two] compete in pro basketball, college basketball and hockey. So by taking out all of that, EA has a monopoly in sports. If these guys have a monopoly, they're not going to cut pricing on sports games as quickly. We've been seeing sports games come down [in price] before Christmas the last couple of years. That'll never happen again."

Until 2004, I worked in a division of the FTC that spent a lot of time looking at technology-related mergers, and had at least taken a good look at mergers like this one. I also have every reason to suspect that my former colleagues would give this deal a hard look, especially in light of Mr. Pachter's comments, of which I'm sure they're aware.

Section 7 of the Clayton Act forbids the acquisition of stock or assets when "the effect of such acquisition may be substantially to lessen competition, or to tend to create a monopoly." (15 U.S.C. § 18) This case, like most merger cases in antitrust, would likely be resolved by the definition of the market (anyone interested in the details of this analysis can refer to the Joint DOJ/FTC 1992 Horizontal Merger Guidelines). If a given market is defined narrowly, it means there are fewer competitors, and concentration levels are consequently likely to be much higher. In a broader market, more competitors are included, concentration levels are lower, and competitive issues are far less likely.

 Freelance journalist Evan Narcisse

It goes without saying that when we play single-player games, we usually do so by ourselves. But while staying at a friend's in Los Angeles over the Thanksgiving break, we were introduced to the singular pleasures of passing the controller back and forth so that two players can, um, jointly progress through a game's solo mode. Upon discovering that freelance journalist Evan Narcisse likes to indulge in the same recreational activity, we knew we had to persuade him to write about this phenomenon--and its implications--for Level Up. Narcisse, whose work on videogames appears in the Washington Post and Entertainment Weekly, also writes the Thought/Process cultural criticism column for Crispy Gamer and moderates the site's podcast, Blazing Prattles. Here's what he had to say.

Evan Narcisse: I started noticing that my experience of Portal differed from other titles I'd played recently. By my lonesome, I might've chalked up my occasional frustrations to poor design, frazzled reflexes or my own cognitive bottlenecks. Playing co-operatively with B allowed me to take some of the pressure off of myself and let the game seep in. The way I heard GLaDOS's snippy commentary changed completely. Were I playing Portal solo, I would've asked myself if I'd heard her snark correctly, shrugged and gone back to solving the puzzle of whatever room I was in. With B by my side, whoever was playing would pause, we'd look at each other and break out into guffaws when GLaDOS's dry condescension or blatant panic made itself known. By the time the camera careens through the underbelly of Aperture Science and the first gentle strains of "Still Alive" start up, we both were dizzy from flinging Chell through Room 17 and aching from laughing through GlaDOS's final rant. (For my part, I started to well up a little bit, too.)

To read Narcisse's essay in its entirety, click on the link below.

 Matt Bertz, Content Manager for Game Informer magazine

When we launched our "Make or Break" series last November, we promised to ask "prominent developers, reviewers and expert gamers to share with us via email the five key features, details, techniques or flaws that they look for in games in the same genre." We've done fairly well thus far on the developer front, scoring responses from the folks behind Ratchet & Clank Future: Tools of Destruction (creative director Brian Allgeier), Call of Duty 4: Modern Warfare (lead multiplayer designer Todd Alderman), Uncharted: Drake's Fortune (game director Amy Hennig), and the colon-free Crysis (company president Cevat Yerli). But we haven't yet offered up any opinions by reviewers. Until today, that is.

The first videogame reviewer to enter the "Make or Break" hot seat is Game Informer content manager Matt Bertz. With six years of covering games and technology in New York City under his belt prior to joining GI Bertz was the editor-in-chief of Surge, a short-lived gaming magazine that won the 2004 Silver Eddie Award in the Consumer Entertainment Under 250,000 category. His writing has appeared in many outlets, including Next Generation, AOL, Laptop, Mean, Men¹s Fitness, GameSpy, and XLR8R. Because Bertz recently reviewed Crysis for GI, we asked him to tell us what he looks for when he's evaluating a first-person shooter. Here's what he had to say.

 Crysis, developed by Crytek and published by Electronic Arts

1. Non-linearity (or the illusion thereof)

Why it matters: Gamers have spent the greater part of two decades navigating claustrophobic corridors and taking cover behind boxes. The last thing you want is for the player to feel like Bill Murray in Groundhog Day, reliving the same basic experience throughout the entire game. Non-linear level designs allow the players to engage the enemies in a manner of their own choosing, rather than having opposing forces repeatedly spring from behind closed doors and cover after the player crosses a trigger line.

Who got it right: The paramount example of a developer that understands the advantage of non-linear gameplay is Crytek. The German wunderkinds have created two stellar titles, Far Cry and Crysis, each of which offers a sandbox world for gamers to engage with tactics of their own choosing. In these open worlds, players can determine their own play styles; they can move stealthily through the jungle to avoid unnecessary combat, ambush soldier patrols and disappear back into the heavy brush, or walk up the roads guns blazing in classic Rambo fashion. These titles also sprinkle carefully scripted events in certain segments without sacrificing the freedom of movement and decision making an open world affords. Despite its overall unpolished nature, GSC Game World's S.T.A.L.K.E.R.: Shadow of Chernobyl also offers enjoyable experience because of the sense of exploration its open environments offer.

The Atari 2600 Video Computer System controller

In last week's debut of the Monday Morning Quarterback Highlight Reel, we cited some insightful comments made by Bill Harris over at the blog Dubious Quality. We first became aware of Harris' blog during the February DICE conference, where a longtime Nintendo employee suggested that we check it out, which we did. Soon thereafter, Dubious Quality became an essential addition to our RSS newsreader for the smart and often caustic assessments of the business of videogames and the personalities behind it as delivered by the 46-year-old Austin, Texas-based analyst. [Note: Harris--whose all-time favorite games include Guitar Hero II, Fatal Frame II: Crimson Butterfly (Director’s Cut) and Ultima IV--does not cover the videogame industry professionally.]

After reading Harris' alternative explanation of why the critically maligned Carnival Games had become a hit--a "fundamental disconnect between how the people who review Wii games play them and how everyone else plays them"--we asked him to expand on his remarks for our guest post series P2P. He agreed, and the resulting essay is a thoughtful look at how Street Fighter II kicked off an evolutionary path for videogame controllers that has contributed to the shrinking of the industry's reach, and why the Wii remote and nunchuk--even as the games built around them continue to confound the critical establishment--are beacons of hope for a stagnant medium. An excerpt:

To read Harris' post in its entirety, click on the link below.

Since we added our email address to the blog, we've been getting a small but steady stream of emails from readers of our humble scribblings. A few weeks ago, we received a note from Darren Pai, a 37 year-old communications consultant from Honolulu, Hawaii (favorite games of all time: Resident Evil 4, Final Fantasy X, Powerball on the Sega Genesis) with an interesting complaint. (No, not about the Level Up staff and its unimpeachable work.) It seems a father with a two year-old daughter and another child on the way, he's finding that many modern hardcore games are designed in ways that are incompatible with the life of a family man. Is there hope for this emerging "hardcasual" demographic? For Pai's full critique--and his suggestions as to how developers can make his life better--see his email which we've reprinted below with his permission.

May I please suggest a topic for a future story? In my opinion game developers are neglecting the audience upon which this industry was built. Gamers like myself, who are now grown up with careers, families and other responsibilities simply no longer have the time to battle their way through 40 hours of game play to save the world. Even finding blocks of time to get through the next level of a game are hard to come by when your toddler is running around and you've had to bring work home to prepare a draft for your boss to review.

It seems that games for "hardcore" gamers make the assumption that you have large blocks of time to sit in front of a console. So-called "casual" games can be entertaining for short periods of time, but that's not why I play video games. I want the presentation, the action, the experience of a "big" game. Gamers like myself don't want casual games, we want that hardcore gaming experience redesigned to reflect the way we live.

For this reason, I've developed a new set of criteria for selecting games.

To see a larger version of the image above, click here.

 

Beyond3D: Nintendo released no information about the Wii beyond codenames for the chips (Broadway for the CPU and Hollywood for the GPU) and the process node that the chips were built on (90 nanometer, the same as their contemporaries). Through some lengthy investigations, we can now say for certain that there was no major leap in either performance or functionality compared to the GameCube. Instead, Nintendo decided to define the Wii entirely by the new controller....To summarize, while the PS3 and the Xbox 360 are both at least an order of magnitude faster than their predecessors, the Wii has the processing power of one-and-a-half GameCubes with no noteworthy increases in functionality. This was done for two reasons: backwards compatibility with the GameCube and, more importantly, the very low cost. Developers have even told us that the transition guide (for GameCube developers moving to the Wii) is ten pages long and contains only very minor changes.

To read Beyond3D's analysis in its entirety, please click on the link below.