Grand Theft Auto IV Episodic Content Exclusive to 360

[Brad_Grenz]

I don’t know. This statement is weirdly specific about “episodic” content when there are other kinds of downloadable content. This could easily be true with the Xbox getting exclusive, regular releases of episodic add-ons while at the same time the PS3 gets new areas or vehicles or an expansion pack.

[JD]

@"rjcc"

According to some interpretations of the Take Two investors conference call, microsoft is paying $50 million for the DLC.

I’m sure that money was involved at some point to get them to not release that content on the PS3 as well, but couldn’t the statement in the conference call also simply refer to the money they’re expecting to earn by releasing and selling the episodes?

@"Conference Call"

Evan Wilson - Pacific Crest Securities

Thank you. And as it relates to the deferred revenue chunk associated with the episodic content on X-Box 360, you can see that $25 million of that moved into short-term deferred. Could you give us any sense of when that’s going to hit the P&L? Will we see $25 million at one time and then the second 25 or will it be a slow bleed?

Lainie Goldstein

The first 25 is for the first episodic content package that’s supposed to go out and that is in March of ’08. That’s why it moved into current because it’s in the next 12 months. The second 25 will be for the second episodic, the episode, and that will be later in fiscal ’08.

-Julian

[Brad_Grenz]

Yeah, JD’s reading seems far more likely as $50 million is a bizarrely large amount of money for anyone to be paying for simple exclusivity and it makes no mention of that amount being a payment from anyone.

[JD]

Really, if I was handing $50 million to someone, I’d expect them to make the actual game exclusive to my platform. Because that amount of money surely would cover the development costs of the title, or at least the large chunk of that. And they’d still sell millions of copies.

Also, they’re talking about revenue. Since they’re certainly not going to release the episodes for free, that amount simply has to factor in the money generated by sales.

-Julian

[JD]

And the misreporting begins.

[rjcc]

@JD1

I’m sure that money was involved at some point to get them to not release that content on the PS3 as well, but couldn’t the statement in the conference call also simply refer to the money they’re expecting to earn by releasing and selling the episodes?

-Julian

and that’s what I thought too, but without more of the conference call I can’t be sure. but it certainly makes sense. I love how NeoGAF is credited w/ the reporting as well.

[Brad_Grenz]

@JD1

And the misreporting begins.

Let’s all send snarky corrections via email!

[Kevin_Grey]

@Brad_Grenz

Yeah, JD’s reading seems far more likely as $50 million is a bizarrely large amount of money for anyone to be paying for simple exclusivity and it makes no mention of that amount being a payment from anyone.

True but they are earmarking the $25 million gained to occur the same month the content goes live which suggests one lump payment.

[instant0]

Clever they be and release different content to each platform… people have to buy the game twice to get everything. Just like Metal Gear Solid / Substance/Subsistence

[Fuzzydevil]

EDIT: Removed. Beaten by a long way. That’ll teach me not to read threads.

[Jason_Becker]

For $25 million a pop I hope MS has guaranteed from Take-Two that its more than a few new mission and vehicles type things thats the usual for add-on stuff.

[Brad_Grenz]

I emailed Next Gen and they updated their story after a little more research. Sounds like MS actually gave TT an advance of $50 million against the expected earnings from the episodic sales. So we’re actually talking about something like a loan securing exclusivity and not a out and out payment. If the DLC doesn’t sell to expectations, TT would be required to return whatever amount wasn’t covered.

[Editer]

Assume $20 per pack for the DLC*, to make back $25 million is going to require selling to a significant percentage of the installed base.

This should be interesting.

• I have zero knowledge of this deal besides what I’ve read on the Intarweb, so I have no idea what the DLC will cost. For all I know, they plan to sell 25 copies at $1M each to various sports stars, Saudi Sheiks, and Gary Coleman.

[Jason_Becker]

I doubt they will look at the money spent as a success solely as to whether they make it all back in DL sales. Its as much for promotional reasons to get more people to buy the 360 version in the first place.

[Brad_Grenz]

@Jason_Becker

I doubt they will look at the money spent as a success solely as to whether they make it all back in DL sales. Its as much for promotional reasons to get more people to buy the 360 version in the first place.

From Microsoft’s perspective, sure. Take Two is the one who has an interest in seeing high enough sales to cover the full amount of the advance.

[rjcc]

@Brad_Grenz

I emailed Next Gen and they updated their story after a little more research. Sounds like MS actually gave TT an advance of $50 million against the expected earnings from the episodic sales. So we’re actually talking about something like a loan securing exclusivity and not a out and out payment. If the DLC doesn’t sell to expectations, TT would be required to return whatever amount wasn’t covered.

slick

[Factory]

Regardless of the terms of the deal, consider that MS lost basically 1 billion odd a year over the life of the xbox. 50 million sounds like chump change compared to that figure.

[Linoleum]

Take 2 gets some cash to improve their financials, Microsoft gets some exclusive lock-in. Everybody wins…except for Sony.