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October 7th, 2008
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Take-Two makes Illusion Softworks an offer it can't refuse

By Victor Velek
Staff Writer, The Prague Post
January 23rd, 2008 issue

COURTESY PHOTO
Screenshots from Illusion's anticipated video game Mafia II, set for 2009 release. The game is the sequel to the 2002 hit Mafia.
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When Petr Vochozka, now 33, released his first video game, called Světák Bob (“Playboy Bob”), he was an 18-year-old programming enthusiast working from his parents’ home in Polička, east Bohemia.
Within several years, Vochozka’s solitary enterprise grew into Illusion Softworks, the country’s largest game development company, employing dozens of people and producing globally successful titles. Mafia, the studio’s most well-known game, sold more than 2 million copies worldwide.
This month, Vochozka and the 200 people working for him in studios in Prague and Brno, south Moravia, announced that they were moving under the wing of a new family: Take-Two Interactive Software, a U.S. video game publisher based in New York and best known for its violent but wildly popular Grand Theft Auto series.
The deal, announced Jan. 8, comes despite recent financial and management turmoil at Take-Two, which last year recorded a net loss of $138 million (2.4 billion Kč), with revenues of $982 million. Illusion will join a network of Take-Two studios that stretches across the globe, taking the name 2K Czech, after Take-Two’s 2K Games subsidiary.
Vochozka will remain CEO of the branch. No shake-up of Illusion’s management should be expected, said Christoph Hartmann, 2K’s president.
“Petr Vochozka and the talented Illusion Softworks team will be an important part of our 2K Games label, and we are not anticipating any management personnel changes,” he said. “Over time, we intend to expand the studio.”
Vochozka says that working under the 2K label will strengthen ongoing and future projects of his team. Currently, the studio’s most hotly watched title is its long-anticipated sequel to Mafia, a critically lauded gangster-themed video game set in the 1930s and released in 2002.
With Take-Two’s clout behind it, the chance only increases that Mafia II, announced last August and expected to be released in 2009, will come out gangbusters. The original Mafia has a lot of loyal fans, and Take-Two will support the sequel with strong marketing and advertising, said Martin Bach, editor-in-chief of the gaming magazine Level.
“Frankly, I think Mafia and its sequel were why we now have 2K Czech,” added Mikoláš Tuček of the gaming magazine Score. “Take-Two will do their best to make it a top-class title.”
Hard times for independents
In recent years, it has almost become vogue for international companies to acquire local software developers. Several firms, which all began as humble undertakings similar to Vochozka’s, have been taken over by foreign capital.
Today, foreign investors control the anti-virus software maker Grisoft, the country’s second-largest Internet portal and Centrum.cz. The Walt Disney Company recently bought and upgraded a mobile-games development studio in Prague.
Illusion joins this list in going with Take-Two, which has been wracked by controversy since news came out last year that the company had falsified business records. The scandal resulted in internal upheaval and the replacement of the company’s board and CEO. Weakened by this turmoil, Take-Two has been tagged as a potential takeover target.
Despite these problems, most people in the local gaming industry agree Illusion Softworks will benefit from operating under the Take-Two brand.
While the studio lost some freedom, it gained a great deal of safety by joining a large company, Tuček said.
“The gaming business and business in general is evolving in the direction of mergers and acquisitions,” he said. “Smaller, independent studios ... are having harder and harder times.”
Take-Two did not disclose the purchase price of the deal, but during the company’s previous acquisition spree, when it bought four game developers in 2005, it paid prices ranging between $11 million and $32 million.
“My guess is that the transaction price was somewhere between $10 million and $15 million,” Bach said. The same estimate was given by Michael Mlynář, a writer for the gaming portal BonusWeb.
With the entrance of Take-Two, Illusion Softworks only strengthens its position as one of the strongest game development studios in Central and Eastern Europe, Mlynář said.
Bach thinks Vochozka’s successful business story might boost local game development.
“For many young independent developers, Illusion Softworks is an example to be followed,” he said. “Its [success helps] motivate their work.”
Illusion has already served as an incubator for the local game development industry, Bach added. Some of the firm’s former employees have set up their own studios, building on experience gained at Illusion.

Victor Velek can be reached at vvelek@praguepost.com


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