Editing Take-Two Interactive (section)

=== 2001–2006: Further acquisitions and regulatory investigations ===
[[File:Take-Two Interactive logo 1999–2005.svg|thumb|right|190px|Take-Two's logo from 1999 to 2004]]
In February 2001, Brant stepped down as CEO of Take-Two to serve as its [[chairman]], being replaced in the former role by Sumner.<ref name="Histories" /><ref name="ign brant departure" /> Around this time, the company had 658 employees.<ref>{{cite news |url=https://www.newspapers.com/clip/86412583/company-profiles-95-take-two/ |title=Company Profiles – 95: Take-Two Interactive Software Inc. |newspaper=[[Newsday]] |date=June 4, 2001 |page=C32 |via=[[Newspapers.com]] |access-date=October 3, 2021 |archive-date=October 3, 2021 |archive-url=https://web.archive.org/web/20211003160805/https://www.newspapers.com/clip/86412583/company-profiles-95-take-two/ |url-status=live}}</ref> With Rockstar, Take-Two invested into developments of sequels to ''Grand Theft Auto'', including ''[[Grand Theft Auto 2]]'' (1999), and ''[[Grand Theft Auto III]]'' (2001) along with sequels, ''[[Grand Theft Auto: Vice City]]'' (2002) and ''[[Grand Theft Auto: San Andreas]]'' (2004). By 2003, Take-Two had revenues exceeding {{USD|1 billion}}.<ref>{{cite web |url=https://money.cnn.com/magazines/fortune/fortune_archive/2005/08/22/8270037/index.htm |title=Sex, Lies, and Videogames |first=Bethany |last=Mclean |date=August 22, 2005 |access-date=September 3, 2018 |website=[[Fortune (magazine)|Fortune]] |archive-url=https://web.archive.org/web/20150621172255/http://archive.fortune.com/magazines/fortune/fortune_archive/2005/08/22/8270037/index.htm |archive-date=June 21, 2015 |url-status=live}}</ref> In 2002, the Take-Two name was dropped as a publishing label when the short-lived publishing label [[Gotham Games]] was introduced.<ref>{{Cite web |last=IGN |date=2002-07-22 |title=Take-Two Forms Gotham Games |url=https://www.ign.com/articles/2002/07/22/take-two-forms-gotham-games |access-date=2025-01-01 |website=IGN |language=en}}</ref> In 2004, Take-Two paid {{US$|22.3&nbsp;million}} to [[Infogrames]] for the rights to the [[Civilization (series)|''Civilization'' series]].<ref>{{cite web |last=Feldman |first=Curt |url=http://www.gamespot.com/pc/strategy/civilization2/news.html?sid=6113971&mode=all |title=Civilization sold off to mystery buyer |website=[[GameSpot]] |date=February 29, 1996 |access-date=March 24, 2009 |archive-url=https://web.archive.org/web/20110525081725/http://www.gamespot.com/pc/strategy/civilization2/news.html?sid=6113971&mode=all |archive-date=May 25, 2011 |url-status=live}}</ref><ref>{{cite web |last=Thorsen |first=Tor |url=http://www.gamespot.com/pc/strategy/civilizationiv/news.html?sid=6117117 |title=Take-Two takes over Civilization |website=[[GameSpot]] |date=October 25, 2005 |access-date=March 24, 2009 |archive-url=https://web.archive.org/web/20110525081908/http://www.gamespot.com/pc/strategy/civilizationiv/news.html?sid=6117117 |archive-date=May 25, 2011 |url-status=live}}</ref> The company had also planned to acquire [[Vivendi Universal Games]] for {{US$|1&nbsp;billion|long=no}}.<ref>{{cite news |url=https://www.newspapers.com/clip/86413429/game-maker-eyes-vivendi-unit/ |title=Game maker eyes Vivendi unit |first=Matthew |last=Curtin |newspaper=[[The Orlando Sentinel]] |date=April 29, 2003 |page=C3 |via=[[Newspapers.com]] |access-date=October 3, 2021 |archive-date=October 3, 2021 |archive-url=https://web.archive.org/web/20211003160754/https://www.newspapers.com/clip/86413429/game-maker-eyes-vivendi-unit/ |url-status=live}}</ref>

In 2005, Take-Two began a host of acquisitions, spending more than {{US$|80&nbsp;million}} buying game developers.<ref name="Hot Coffee">{{cite web |url=https://www.gamespot.com/articles/take-two-reveals-acquisition-prices-hints-at-future-lawsuits/1100-6143447/ |title=Take-Two reveals acquisition prices, hints at future lawsuits |website=[[GameSpot]] |date=February 2, 2006 |access-date=December 14, 2010 |archive-url=https://web.archive.org/web/20170226001336/http://www.gamespot.com/articles/take-two-reveals-acquisition-prices-hints-at-future-lawsuits/1100-6143447/ |archive-date=February 26, 2017 |url-status=live}}</ref> One of its largest acquisitions was for the development studios [[Visual Concepts]] and [[Kush Games]] from [[Sega]] for about {{USD|32 million}} in January 2005. Both studios had been extensively behind several sports simulation games, branded through [[ESPN]], and typically released updated versions each year, using a ''2K'' brand to differentiate versions (such as ''[[ESPN NFL 2K5]]''). In 2004, Take-Two had struck a deal with Sega to help publish these titles. Just prior to Take-Two's acquisition, [[Electronic Arts]] announced it had secured the exclusive rights to create video games based on the [[National Football League]] (NFL) and a fifteen-year branding deal with [[ESPN]], effectively killing Visual Concepts' own NFL title and devaluing their others games. This decision led Sega to abandon the sports-game market. Take-Two acquired these studios and unique branding (including the ''2K'' brand), as well as negotiated for exclusive rights with [[Major League Baseball]] for video games.<ref>{{cite web |url=https://www.gamespot.com/articles/sega-officially-out-of-the-sports-game/1100-6117016/ |title=Sega officially out of the sports game |first=Curt |last=Feldman |date=January 24, 2005 |website=[[GameSpot]] |access-date=February 3, 2018 |archive-url=https://web.archive.org/web/20171014034622/https://www.gamespot.com/articles/sega-officially-out-of-the-sports-game/1100-6117016/ |archive-date=October 14, 2017 |url-status=live}}</ref><ref>{{cite web |url=http://www.ign.com/articles/2005/01/25/take-two-buys-visual-concepts |title=Take Two Buys Visual Concepts |first=David |last=Adams |date=January 24, 2005 |website=[[IGN]] |access-date=February 3, 2018 |archive-url=https://web.archive.org/web/20180204001234/http://www.ign.com/articles/2005/01/25/take-two-buys-visual-concepts |archive-date=February 4, 2018 |url-status=live}}</ref> A day after announcing these acquisitions, Take-Two established their [[2K (company)|2K]] publishing label to maintain the ''2K'' brand, moving several planned games from their budget software label, Global Star, to 2K. Take-Two further realigned the other existing internal studios — Indie Built, Venom Games, PopTop Software and Frog City Software, and Take-Two Licensing — within this new structure.<ref>{{cite web |url=https://www.gamedeveloper.com/game-platforms/take-two-acquires-visual-concepts-announces-2k-games-brand |title=Take-Two Acquires Visual Concepts, Announces 2K Games Brand |first=David |last=Jenkins |date=January 25, 2005 |website=[[Gamasutra]] |access-date=February 3, 2018 |archive-url=https://web.archive.org/web/20180204070208/https://www.gamasutra.com/view/news/95818/TakeTwo_Acquires_Visual_Concepts_Announces_2K_Games_Brand.php |archive-date=February 4, 2018 |url-status=live}}</ref>

After the formation of 2K, Take-Two completed other major acquisitions. [[Firaxis Games]] was acquired in November 2005 for around {{USD|27 million}};<ref>{{cite web |url=https://www.wsj.com/articles/videogame-civilization-to-make-inroads-in-classrooms-1466720101 |title=Videogame 'Civilization' to Make Inroads in Classrooms |first=Sarah |last=Needleman |date=June 23, 2016 |access-date=September 4, 2018 |website=[[The Wall Street Journal]] |archive-url=https://web.archive.org/web/20180904192056/https://www.wsj.com/articles/videogame-civilization-to-make-inroads-in-classrooms-1466720101 |archive-date=September 4, 2018 |url-status=live}}</ref> Take-Two had already supported the studio by using their acquisition of the ''Civilization'' license to support publishing of ''[[Civilization IV]]''.<ref>{{cite web |url=https://www.gamesindustry.biz/articles/firaxis-games-acquired-by-take-two-interactive |title=Firaxis Games acquired by Take-Two Interactive |first=Paul |last=Loughrey |date=November 8, 2005 |access-date=September 4, 2018 |website=[[GamesIndustry.biz]] |archive-url=https://web.archive.org/web/20180904225623/https://www.gamesindustry.biz/articles/firaxis-games-acquired-by-take-two-interactive |archive-date=September 4, 2018 |url-status=live}}</ref> [[Irrational Games]] was acquired around January 2006 for about {{USD|10 million}}, including both its Boston and its Canberra studio.<ref name="Hot Coffee" /> At the time Irrational had already established a publishing deal with Take-Two for their upcoming ''[[BioShock]]'' game. With the deal, Irrational became part of the 2K label.<ref>{{cite web |url=https://www.gamesindustry.biz/articles/take-two-interactive-acquires-irrational-games |title=Take-Two Interactive acquires Irrational Games |first=Ellie |last=Gibson |date=January 10, 2006 |access-date=September 4, 2018 |website=[[GamesIndustry.biz]] |archive-url=https://web.archive.org/web/20180904225638/https://www.gamesindustry.biz/articles/take-two-interactive-acquires-irrational-games |archive-date=September 4, 2018 |url-status=live}}</ref> It also acquired PAM Development from the Gaia Capital Group for {{US$|11.4&nbsp;million}}, giving them access to the ''[[Top Spin (video game)|Top Spin]]'' series of tennis games.<ref name="Hot Coffee" />

However, during this period, the [[U.S. Securities and Exchange Commission]] (SEC) began examining Take-Two's business records, based on complaints filed from 2001 that Take-Two's earnings did not seem to match figures of game sales reported by [[NPD Group]]. The SEC's formal complaint found that the company had purportedly sold products to distributors as a "parking transaction" for a quarter, as to artificially increase their revenues for investors, which it estimated was a {{USD|60 million}} fraud.<ref name="Guilty Plea">{{cite web |url=https://www.nytimes.com/2007/02/15/business/15options.html |title=A Guilty Plea for Options Backdating |first=Matt |last=Richtel |date=February 15, 2007 |access-date=September 3, 2018 |website=[[The New York Times]] |archive-url=https://web.archive.org/web/20180903215543/https://www.nytimes.com/2007/02/15/business/15options.html |archive-date=September 3, 2018 |url-status=live}}</ref> A lawsuit was filed against Take-Two in December 2001, alleging that the company had lied to shareholders.<ref>{{cite news |url=https://www.newspapers.com/clip/86413224/video-game-publisher-lied-to/ |title=Video-game publisher lied to shareholders, suit says |newspaper=[[The Baltimore Sun]] |date=December 27, 2001 |page=2C |via=[[Newspapers.com]] |access-date=October 3, 2021 |archive-date=October 3, 2021 |archive-url=https://web.archive.org/web/20211003160755/https://www.newspapers.com/clip/86413224/video-game-publisher-lied-to/ |url-status=live}}</ref> Take-Two initially restated seven quarters of past financial results in February 2002, then five years in January 2004.<ref>{{cite news |url=https://www.newspapers.com/clip/86412951/reports-are-early-warnings-but/ |title=Reports are early warnings, but technique is questioned |first1=Mark |last1=Maremont |first2=William M. |last2=Bulkeley |newspaper=[[Star Tribune]] |date=April 21, 2002 |page=D10 |via=[[Newspapers.com]] |access-date=October 3, 2021 |archive-date=October 3, 2021 |archive-url=https://web.archive.org/web/20211003160809/https://www.newspapers.com/clip/86412951/reports-are-early-warnings-but/ |url-status=live}}</ref><ref name="newsday chairman">{{cite news |url=https://www.newspapers.com/clip/86411638/city-inc/ |title=City Inc. |agency=[[Associated Press]] |newspaper=[[Newsday]] |date=March 17, 2004 |page=A33 |via=[[Newspapers.com]] |access-date=October 3, 2021 |archive-date=October 3, 2021 |archive-url=https://web.archive.org/web/20211003160756/https://www.newspapers.com/clip/86411638/city-inc/ |url-status=live}}</ref> Brant stepped down as chairman in March, being succeeded by Richard Roedel.<ref name="newsday chairman" /> After the SEC's issuance of the complaint in 2005, Take-Two agreed to pay a {{USD|7.5 million}} fine, along with Brant and other executives paying fines totaling around {{USD|6.4 million}}. Brant, who had remained with the company in the non-executive role of "Vice President of Production", ultimately resigned from the company in October 2006, following a four-month disability leave due to a bad back.<ref name="ign brant departure">{{cite web |url=http://www.ign.com/articles/2006/10/18/take-two-founder-resigns |title=Take-Two Founder Resigns |first=Daemon |last=Hatfield |date=October 18, 2006 |website=[[IGN]] |access-date=July 18, 2018 |archive-url=https://web.archive.org/web/20180903215628/http://www.ign.com/articles/2006/10/18/take-two-founder-resigns |archive-date=September 3, 2018 |url-status=live}}</ref>

In 2007, a separate investigation by the SEC found further issues with Brant and two other executives of the company. In an industry-wide sweep against [[options backdating]] (receiving shares when they are priced high but backdating their ownership to when they were priced low), the SEC had found Brant had received backdating options of over 2.1 million shares, though he had excised all options upon his 2006 resignation. Brant pleaded guilty to falsifying business records, but agreed to co-operate with the SEC and instead of receiving up to four years in prison, was fined {{USD|7.3 million}} and barred from holding any "control management positions" in a publicly traded company.<ref name="Guilty Plea" /><ref>{{cite web |url=https://www.nytimes.com/2007/08/01/business/worldbusiness/01iht-taketwo.4.6942622.html |title=Take-Two's former chief sentenced to probation in option backdating case |date=August 1, 2007 |access-date=September 3, 2018 |website=[[The New York Times]] |archive-url=https://web.archive.org/web/20180903221153/https://www.nytimes.com/2007/08/01/business/worldbusiness/01iht-taketwo.4.6942622.html |archive-date=September 3, 2018 |url-status=live}}</ref> Brant died of [[cardiac arrest]] in March 2019 at the age of 47.<ref name="dignity memorial" /><ref>{{cite web |url=https://www.gamesindustry.biz/articles/2019-03-25-take-two-founder-ryan-brant-dies |title=Take-Two founder Ryan Brant dies |first=Brendan |last=Sinclair |date=March 25, 2019 |access-date=March 25, 2019 |website=[[GamesIndustry.biz]] |archive-url=https://web.archive.org/web/20190325200305/https://www.gamesindustry.biz/articles/2019-03-25-take-two-founder-ryan-brant-dies |archive-date=March 25, 2019 |url-status=live}}</ref>

Further troubling Take-Two during this period was criticism and legal actions taken against the [[Hot Coffee mod|''Hot Coffee'' mod]], a user-made [[mod (video gaming)|modification]] to ''Grand Theft Auto: San Andreas'' that unlocked a hidden graphic sex scene that was built into the game, with concerned politicians and consumers stating the scene belied the game's [[ESRB]] content rating. Actions taken against Take-Two included an investigation by the [[Federal Trade Commission]] for deceptive advertising, to which Take-Two and Rockstar settled in 2006 on fines for any future violations of content ratings.<ref>{{cite web |url=http://www.nbcnews.com/id/13227126/ns/technology_and_science-games/t/grand-theft-auto-publishers-settle-ftc/ |title='Grand Theft Auto' publishers settle with FTC |first=Ron |last=Harris |date=June 9, 2006 |access-date=September 3, 2018 |website=[[NBC News]] |archive-url=https://web.archive.org/web/20180903215442/http://www.nbcnews.com/id/13227126/ns/technology_and_science-games/t/grand-theft-auto-publishers-settle-ftc/ |archive-date=September 3, 2018 |url-status=dead}}</ref> Take-Two completed a {{USD|20.1 million}} settlement related to class-action lawsuits filed against it in 2005 over the ''Hot Coffee'' mod, as well as to a class-action lawsuit brought by shareholders over the options backdating fraud, in September 2009.<ref>{{cite web |url=https://artsbeat.blogs.nytimes.com/2009/09/03/four-years-later-grand-theft-auto-lawsuit-is-settled/ |title=Four Years Later, Grand Theft Auto Lawsuit Is Settled |first=David |last=Itzkoff |date=September 3, 2009 |access-date=September 4, 2009 |website=[[The New York Times]] |archive-url=https://web.archive.org/web/20091006114532/http://artsbeat.blogs.nytimes.com/2009/09/03/four-years-later-grand-theft-auto-lawsuit-is-settled/ |archive-date=October 6, 2009 |url-status=live}}</ref>