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Pachter: T2 strategy won't pay off in 2009
Pachter: T2 strategy won't pay off in 2009
GamaSutra - December 18, 2008
Submitted by deftangel (291) at 12:03PM PST on December 18, 2008
Wedbush Morgan's Michael Pachter suggests Take 2's strategy for 2009 won't pay big dividends in 2009 citing a potential over-reliance on sales of GTA:IV episodes as well as a back loaded catalogue.
He estimates GTA:IV 360 has sold 7m copies and 5m of which are Live users. Even so, his take on it is that the addressable market for DLC is half that again, even with the DLC providing a boost to sales of the retail disc.
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1apujanata posted on Take-Two Interactive, Inc. (TTWO) at 3:01PM PST on December 18, 2008. RE: Pachter: T2 strategy won't pay off in 2009@deftangel,
How many episodes will GTAIV have ? If there are too many (more than 2), then people will realize that the DLC (3x$20) are = or > than the stand alone game ($60), and most people might not buy the 3rd or 4th episodes (just like .hack 3rd game and 4th game).
Long tail games (or episodes) on X360 ? Are past evidence of it (other than Halo 3) ? IIRC, GTAIII, SA and VC doesn't have long tail on XBOX.[ Oracle ] [ Level 30 ] [ Rank: 14935 ]bids
1deftangel posted on Take-Two Interactive, Inc. (TTWO) at 12:06PM PST on December 18, 2008. RE: Pachter: T2 strategy won't pay off in 2009@deftangel,
I found the next part more interesting. It's well known that Microsoft's standard royalty is 30% and that they've advanced Take 2 $50m of sales. This means they need to sell 1.75m copies of each episode (assuming they take $14 per unit) before it can make a profit.
Personally speaking I'm a little more optimistic than Mr Pachter...these episodes will be marketed to hell and back and will naturally have a long tail. It'll be a good earner for them IMO.[ Oracle ] [ Level 21 ] [ Rank: 291 ]bids
12deftangel posted on Take-Two Interactive, Inc. (TTWO) at 12:03PM PST on December 18, 2008. Article: Pachter: T2 strategy won't pay off in 2009Wedbush Morgan's Michael Pachter suggests Take 2's strategy for 2009 won't pay big dividends in 2009 citing a potential over-reliance on sales of GTA:IV episodes as well as a back loaded catalogue. He estimates GTA:IV 360 has sold 7m copies and 5m of which are Live users. Even so, his take on it is that the addressable market for DLC is half that again, even with the DLC providing a boost to sales of the retail disc.[ Oracle ] [ Level 21 ] [ Rank: 291 ]
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I don't think you can compare the long tail of GTA:IV episodes on a relatively successful platfom with a full game retail release on a less successful one a few years ago.
There are two exclusive "episodes" agreed. This is relatively new ground. The closest comparison would be the Half Life 2 episodes but the Xbox 360 is a platform almost built around this sort of content, I'd say all bets are off as to how well it might do.