Gene G. Marcial of Business Week has discussed the possible Take 2 acquisition a bit more in his latest article, A Play For Take-Two:

But [Microsoft] has a ways to go to catch up with Electronic Arts, Activision, THQ, or Take-Two Interactive Software.
So Microsoft might bid for one of them. Some pros are betting on Take-Two , which sells games for Sony, Nintendo, Apple Computer, and Microsoft machines. A strategist at one investment bank says Take-Two is attractive not only for its products but also because it is the most undervalued: It trades at 14, or 12 times estimated 2002 earnings of $1.15 a share, vs. Electronic Arts' p-e ratio of 91, Activision's 30, and THQ's 28.

Both Microsoft and Take 2 have been silent about the matter, but the rumors continue to arise. (Thanks Ministry Of Security)