Warner saves Eidos, might buy it

By now you probably all know that Warner has invested $30 million and bought another 10% of Sci/Eidos as part of a bigger $119 million deal by the struggling "Tomb Raider" publisher to raise enough cash to stay alive.

But, as I wrote in Daily Variety today, the bigger story is how much power WB now has over the company's future. In addition to owning 20%, it controls the company's distribution and marketing in the North American market. That's the biggest videogame company for which WB has taken over distribution through its homevideo operation. It's a major coup.

More importantly, WB is now in a position to prevent any other big media company -- like NBC Universal  -- from acquiring Sci/Eidos. It's also in a very good spot to go ahead and buy the whole thing if/when it's ready. For now, though, WB seems just barely confident enough to let Sci's new CEO go through with his downsizing and re-focusing and try to turn this troubled company into one with a future. This quote I got from Warner Bros. home entertainment head Kevin Tsujihara, who oversees videogames along with DVDs, is pretty revealing on that front:

Sci recently announced a restructuring plan which includes a new management team as well as a number of strategic and operational changes. We think the plan is a good one, and we're impressed by the new management team, so the best option for Warner Bros is to support management's decision and work with them to build Sci's business.

So if Sci/Eidos does manage to get its sh*t together, look for its ties to WB to get closer and closer and quite possible turn into an acquisition. Warner, after all, is investing heavily in videogames, as evidenced by its purchase of Traveller's Tales last year.

Also worth noting, just to see how much things have changed in 16 months: In December of 2006, Warner Bros. spent $86.8 million for 10% of Sci/Eidos. Last week it paid $30 million for virtually the same size stake. Ouch.

Read the whole story in Daily Variety.

Comments

[Xtreme Gamer]

I am a fan of TOMB RAIDER and i can afford to any range of rates....