Electronic Arts, behemoth of the video game industry, was supposed to finish its bid to take over video game publisher and developer Take-Two Interactive ages ago (back in February, to be precise).

Instead, the $2 billion deal was drawn out, with the deal “expiring” and then renewed multiple times. On August 25, 2008, the two companies finally entered a confidentiality agreement, according to an SEC filing. The non-disclosure agreement doesn’t mean that the two companies will reach a deal, though. Instead, it simply means they’ve taken a small step towards some sort of closure.

Still, a step is a step, right? Will EA and Take-Two finally reach an agreement? After talking to both Lan Haiwen, CEO of China-based Ultizen Games (which I covered here) and Brian Shiau, founder of the simExchange, they offered their thoughts on the deal and the possible effects it might have on the industry.

Back in February, EA, with all the cockiness of an industry giant, offered Take-Two a deal that EA probably assumed they couldn’t refuse. And they had reason to be cocky. EA is responsible for blockbuster series, especially when it comes to their popular money-milking sports titles, and more recently for most of the games released over summer.

However, Take-Two has the controversial but popular “Grand Theft Auto Series,” developed by their subsidiary Rockstar Games. Another subsidiary includes 2K Sports, which is the biggest competition for EA’s sports titles (more on this later, though).

Shiau believes the deal was drawn out partly because of the timing of the initial offer. For one thing, “Grand Theft Auto IV,” widely anticipated as one of the biggest games of the year, was set to release at the end of April.

“Take-Two had said they were hoping for GTA sales data to warrant a higher valuation for the stock,” says Shiau.

Haiwen offers another possible explanation: “[Take-Two] may have been a little scared – it’s a big merge.”

Now, though, the confidential talks will allow Take-Two to convince EA that the company is of greater value, and the two can try to work something out. While anything decided on is hush-hush for now, signs seem to point towards a deal.

“EA’s offer is good,” says Haiwen, “and Take-Two will probably learn from Microsoft and Yahoo.”

Take-Two’s stocks confirm this sentiment. “Take-Two continues to trade well above its price prior to the deal announcement,” Shiau affirms. “It appears investors continue to believe that a deal will eventually occur.”

Shiau goes on to say the stock prices also “imply the market is predicting some value being created by the merger.”

This value could also be a drawback, especially regarding sports games. “There is certainly some question regarding the effect of the elimination of Take-Two’s sports games, which have largely been the only competition for EA Sports,” says Shiau, adding that it largely depends on “how much EA’s management will meddle with Take-Two’s studios if and once a merger takes place.”

Beyond the “Grand Theft Auto” series, which would still be a valuable asset, sports are probably the biggest point of interest for the company. EA already operates a virtual monopoly when it comes to sports, and taking over its main competitor will only further solidify EA’s status as the provider of sports games.

Haiwen, though, sees a slightly different story when it comes to Asia. “EA and Take-Two have less impact in East Asia,” says Haiwen. “Not too many people in China talk about the deal.”

As such, the possible monopoly EA will hold over video game sports is not as much of a concern in China, though that’s not to say there won’t be any effect. Haiwen remains confident that the combined assets of Take-Two and EA would allow for more penetration into the Asian market, particularly in PC gaming.

“I see the market share of PC gaming growing a lot more in the next 3 years, especially in China,” states Haiwen.

PC gaming may seem like an endangered species in North America, but it’s most definitely thriving in Asia, and this growth may become even more apparent should the powerhouse EA grow even larger with an acquisition.

Of course, EA has been singled out by gamers as a heartless company-eating giant that simply churns out rehashed titles and licensed fare. More recently, though, EA has been breaking down that image with original titles in its lineup and a focus on appealing to the core gamer. It remains to be seen, then, if EA can fully shake off its lackluster reputation within the gaming community should the deal with Take-Two actually go through.