LOS ANGELES (MarketWatch) -- Despite already receiving regulatory clearance, Electronics Arts Inc. suddenly dropped its $2 billion bid for fellow video-game publisher Take-Two Interactive Software Inc. on Sunday.

In a press release, Electronic Arts ERTS said it decided to drop the bid after a management presentation from Take-Two TTWO, -1.86% and a review of the company's due diligence.

No reason was given for the move. The statement read, "EA has decided not to make a proposal to acquire Take-Two and has terminated discussions with Take-Two."

Electronic Arts and Take-Two confirmed they had begun formal discussions to merge in late August and shortly after the Federal Trade Commission said it would not stand in the way of such a marriage.

The two started their merger dance earlier this year when Electronic Arts, the publisher of "Madden NFL" and "The Sims" series, offered $26 a share for Take-Two, known primarily for its "Grand Theft Auto" series of video games. Take-Two rejected the proposal as undervaluing its business but said it was open to discussing a potential deal.

EA later lowered its bid price slightly to $25.74, after Take-Two implemented a management compensation plan that EA claimed lowered the value of the company.

In August, after the FTC paved the way for the deal to go through, EA indicated it wasn't fully ready to go ahead with the deal. But analysts had expected it to go through, particularly after the success of "Grand Theft Auto IV," the latest in Take-Two's series.

In its own statement Sunday, Take-Two said it remains focused on creating value for its shareholders and hinted that it is talking with other potential suitors, though none have yet made a competing bid.

"This has been our goal since EA launched its conditional and unsolicited bid six months ago, a bid which was repeatedly rejected by our stockholders," Take-Two chairman Strauss Zelnick said in the statement. "As part of that commitment, we remain actively engaged in discussions with other parties in the context of our formal process to consider strategic alternatives."

At the close Friday, Take-Two shares were up 1.1% to $21.89, roughly $4 below the last share price offer.