• The Wall Street Journal, Friday, March 30, 2007 10:30 AM

As expected Take 2 Interactive Software's shareholders, who own a 46.1 percent majority stake in the company, removed its existing board, nominating ZelnickMedia's Strauss Zelnick as chair and replacing Paul Eibeler with Benjamin Feder as acting chief executive. In all, six board members were ousted, and a seventh, Grover Brown, was added (and consequently reappointed) as the last director. The new board plans to spend the next several months deciding what should be done about the video game maker's ailing financials, caused by poor game sales from some of its units and an options backdating scandal involving former chairman and CEO Ryan Brant.

It's pretty simple: to get right, Take Two needs to trim the fat. The game publisher holding company has a couple of flagging units, most notably Joytech and Global Star Software, that haven't added any value recently. The board may also consider dumping the moderately successful 2K Games and the more-successful 2K Sports to focus on Rockstar, maker of the "Grand Theft Auto" series.

The shareholder coup came from four primary institutional shareholders -- mutual-fund firm Oppenheimer Funds, D.E. Shaw Portfolios LLC, Tudor Investment Group and the hedge fund S.A.C Capital-not known for activist investing. At a meeting earlier this week, Zelnick confirmed that the new board has no plans to sell the company. There's no vision for an exit," he said, adding that the "creative talent will remain in place."

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