You’re probably thinking about Grand Theft Auto VI right now. Everyone is. But to understand how we got to a point where a single trailer can break the entire internet, you have to go back to the late nineties. It was a weird time for games. 1998, specifically. People ask when did Take-Two buy Rockstar because they assume it was some massive, multi-billion dollar Silicon Valley merger. Honestly? It was more of a rebranding of a tactical acquisition that almost nobody noticed at the time.
Take-Two Interactive didn’t actually buy a company called "Rockstar Games." They bought a small, struggling British publisher called BMG Interactive.
Think about that. The house that built Red Dead Redemption and GTA started as a line item in a purchase agreement for about $14.2 million in stock. That’s it. In today’s money, that’s basically the budget for a single high-end cutscene in a modern AAA title. But that small move in March 1998 changed the trajectory of entertainment forever.
The BMG Connection: Where Rockstar Actually Started
Before Rockstar was Rockstar, it was just the games division of BMG Entertainment (part of Bertelsmann). They had this weird, top-down 2D game called Grand Theft Auto. It was controversial, sure, but it wasn't a world-conquering juggernaut yet. It was just a glitchy, fun, somewhat ugly game developed by DMA Design in Scotland.
Take-Two was a young company back then, founded by Ryan Brant. They were hungry. They wanted a foothold in the UK and European markets. On March 12, 1998, Take-Two announced they were picking up BMG Interactive. This included the rights to everything BMG had been working on.
But here is the nuance most people miss. Sam Houser, Dan Houser, Terry Donovan, Jamie King, and Gary Foreman—the guys who basically invented the Rockstar "vibe"—were working at BMG. When Take-Two bought the assets, they didn't just want the games. They wanted the talent.
Creating the Rockstar Label
By December 1998, Take-Two officially formed the Rockstar Games label as a subsidiary. It wasn't an acquisition of an existing brand; it was the birth of a new identity using the pieces they’d just bought. Sam Houser was named President. They didn't want to be just another game publisher. They wanted to be a lifestyle brand. They wanted to be the Def Jam of video games.
They succeeded.
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Why the DMA Design Purchase Matters Too
If you're looking for the moment the "modern" Rockstar was truly assembled, you have to look at 1999. While Take-Two had the Rockstar brand and the publishing rights to GTA, they didn't actually own the developers who made the game yet. DMA Design—the actual studio in Edinburgh—was owned by Gremlin Interactive.
In 1999, Infogrames bought Gremlin. Then, in a move that looks like genius in hindsight, Take-Two stepped in and bought DMA Design from Infogrames for about $11 million.
Now they had the brand, the visionaries (The Housers), and the technical wizards (DMA). They eventually renamed DMA Design to Rockstar North.
Boom. The pieces were on the board.
GTA III was just around the corner, and the world was about to change.
The Numbers: Was it a Good Deal?
It's the understatement of the century.
Take-Two’s investment in BMG and DMA Design combined was less than $30 million. For context, Grand Theft Auto V has generated over $8 billion in revenue since 2013. It is arguably the most profitable media product in the history of the world. Not just games. Everything. Movies, books, music—nothing touches it.
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But it wasn't always smooth. The early 2000s were chaotic. Take-Two faced massive scrutiny from the SEC, internal leadership shuffles, and the "Hot Coffee" scandal that nearly sank the company. Yet, the Rockstar wing remained the golden goose.
A Culture of Autonomy
The real reason the Take-Two and Rockstar relationship worked is because Take-Two (mostly) let them do whatever they wanted. Rockstar operates differently than almost any other studio. They don't follow annual release cycles. They don't talk to the press much. They spend eight years on a single game and spend hundreds of millions of dollars doing it.
Most corporate parents would have revolted by now. But when you produce Red Dead Redemption 2, a game that sells 65 million copies, you get a lot of leeway.
Disputing the Myths
One common misconception is that Rockstar was a standalone indie studio that got "gobbled up" by a greedy corporation.
That’s not really it.
The Houser brothers were already working within the corporate structure of BMG. They were looking for a partner that understood their "rock and roll" approach to software. Take-Two provided the capital and the distribution, while Rockstar provided the edge.
Another myth? That the "Rockstar" name existed before Take-Two. Nope. The name was coined after the acquisition to give the BMG team a fresh start and a distinct voice. It was a branding masterstroke.
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The State of Play in 2026
As we look at the landscape today, the dynamic has shifted. Dan Houser is gone. Lazlow Jones is gone. Much of the original "brain trust" that came over in the 1998 BMG deal has moved on to new ventures like Build A Rocket Boy or Absurd Ventures.
Investors often wonder if Take-Two is Rockstar. While Take-Two owns 2K Games (NBA 2K, BioShock) and recently bought Zynga for a staggering $12.7 billion, Rockstar remains the undisputed crown jewel. The valuation of Take-Two basically fluctuates based on the proximity of the next GTA release.
What This Means for You
If you are a creator, a business owner, or just a fan, there are a few heavy-hitting lessons from the 1998 Take-Two deal.
- Value isn't always in the product; it's in the potential. Take-Two bought a 2D game that people thought was "okay" and turned it into a cultural phenomenon.
- Acquire talent, not just IP. If Take-Two hadn't brought Sam and Dan Houser into the fold, the GTA name would likely be a forgotten relic of the 90s.
- Patience pays. Rockstar’s shift from releasing a game every year to once a decade is a testament to the power of "premium" positioning.
How to Track the Rockstar/Take-Two Future
If you want to keep tabs on how this relationship evolves—especially with GTA VI looming—pay attention to Take-Two’s quarterly earnings calls. They are surprisingly transparent about their "pipeline." You don't need to be a Wall Street analyst to see the patterns.
Also, watch the movement of veteran developers. When "Lead Producers" leave Rockstar North, it usually signals the end of a major development phase.
The 1998 deal was small. The impact was infinite. We are still living in the world that $14 million purchase created.
Next Steps for Gaming Enthusiasts and Investors:
- Check the Credits: Look at the leadership of the upcoming GTA VI. See how many names remain from the original 1998 BMG transition. This tells you a lot about the "DNA" remaining at the company.
- Monitor SEC Filings: If you're curious about the financial health of the partnership, Take-Two’s 10-K filings provide a granular look at how much they rely on Rockstar compared to their other labels like 2K or Zynga.
- Follow the New Studios: Keep an eye on Absurd Ventures. Seeing what the Rockstar co-founders do next is the best way to understand what the "Rockstar" vibe was actually made of.