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Analysts See 'Silver Lining' In BioShock 2 Delay, Next GTA By 2011?
by Leigh Alexander
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July 14, 2009
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Analysts are disappointed by Take-Two's push-out of BioShock 2 into its fiscal 2010, but feel positive on the outlook for the company's next two years -- especially with the next Grand Theft Auto already in the works.
Wedbush Morgan's Michael Pachter says he has confirmed with Take-Two that the next GTA is in development and has been for over a year "using the same game engines as the last version."
"Management also told us that the team at Rockstar North is highly motivated to get the game out, and that the team understands that its highest payday will come from working on GTA instead of any other game," says Pachter.
Plus, the company stands to benefit in the long run from its IP portfolio, says Cowen Group's Doug Creutz -- Mafia II, Red Dead Redemption and Max Payne 3 will all launch next year too.
"The silver lining in yesterday’s cloud is the fact that next year’s lineup just became significantly stronger," agrees Pachter -- who estimates that Take-Two's lineup for next year can generate year over year sales of 12 to 15 million units, assuming each game in the portfolio, including BioShock 2, sells 2 million units.
"Our estimates include contribution from Max Payne 3, Red Dead Redemption, Mafia 2, L.A. Noire, Midnight Club 4 and a new property from Ken Levine of 2K Boston," Pachter notes. All this means that Take-Two could post year over year revenue growth of $550 – $700 million units, all from owned IP.
The big question, of course, remains when the company's next GTA, a sure-fire sales hit, will launch -- Take-Two won't estimate even a general launch window at this stage. Creutz says a new multiplatform release between now and next holiday is "unlikely."
But Pachter says the next GTA won't be much longer than that. "When we do the simple math, we conclude that the next installment is likely to be completed by some time in 2010," estimates Pachter, "although given the frequency of game delays, it is not clear that it will necessarily come before October 31, 2010."
"However, it is clear to us that the next version of GTA will arrive before the end of FY:11," he adds -- Take-Two's fiscal 2011 begins on November 1, 2010. And when it launches, according to the analyst, given that console install bases are projected to have grown by 60 percent since the launch of GTA IV, the game could sell at least 15 million units, possibly 18 million or more.
All of this means, according to the analysts, that the delay of BioShock 2 simply helps strengthen the company's anticipated performance over the next two years, even though Pachter's estimate is that the push-out shaves some $90 million in revenue off of the company's fiscal 2009.
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Well, but GTA 2, they always followed that pattern (GTA 1 had the three tradicional cities in one... GTA 3 has Liberty City, Vice City and San Andreas in separated games, but share the same engine and gameplay, and GTA 4 again started on Liberty City, the starting level of GTA 1 and the first city of GTA 3...)