Take Two: GTA:VC, DN:F, and The Warriors

From CNNMoney Take Two drives Grand Theft Auto to profitability. - Feb. 27, 2003 :

Bat-wielding gangsters are the heroes of Take Two Interactive Software these days, but Duke Nukem’s popularity is starting to fade. The exceedingly popular

(and controversial) “Grand Theft Auto: Vice City” has sold more than 8.5 million copies worldwide since its late October debut. Those sales, according to the company, made up 68 percent of Take Two’s first quarter revenue of $408.8 million.

The video game publisher reported a first quarter profit of $50.5 in its fiscal first quarter, compared to $34.8 million in 2002. Additionally, the company raised guidance for its full fiscal year to $970 million. Write-downs and impairment costs totaled $14.5 million, with a significant portion of that blamed on the anticipated, but long-delayed action game “Duke Nukem Forever”. First announced in 1998, the game still has no targeted release date. And company officials said there’s no hope of it shipping within the next three months.

GTA:VC – Holy shit. No wonder everybody’s looking to make that one monster game. 68% of $408 million is…wait, let me get my calculator out here…a lot of friggin’ money.

DN:F – A “significant portion” of TT’s write-downs and impairment costs of $14.5 million were attributable to DN:F! “A significant portion” is corporate-speak for “basically all.”

The developer has 11 titles in the works, only three of which have been publicly disclosed - the next “GTA” game, “Manhunt” and a game based on the 1979 film “The Warriors”.

I hadn’t heard about the Warriors game. Anyone know anything? Will we get to clink empty beer bottles together? If we get to do that, I’m like way there.

Thanks. Now I’ll be saying, “Warrrrriors, come out to PLAAAAYYYIIIIAYYYYY” for the rest of the day.

“No, Cyrus… it was the Warriors…”

Yeah, I do that with empty Diet Pepsi cans.

(clink)… (clink)… Tom Chi-iiiick… (clink)… (clink)… come out to pla-aaay… (clink)… (clink)…

-wumpus

I wonder if they will get Patti Smythe to sing “The Warriors '03.”

This DNF news is being completely misunderstood by those who read this. The bottom-line is that TTWO had a tremendous quarter, and so they’re expensing the fee that they paid to Infogrames (not 3D Realms – we didn’t get a penny of the $12 million) in there just-completed fiscal quarter, rather than in the quarter when the game comes out. Very smart revenue management. They get to expense the game now, and still beat EPS (earnings / share) estimates, and then when DNF ships, it’ll be pure profit on their books.

TTWO (their stock symbol) can do this because of having such a great quarter via Vice City sales.

This doesn’t reflect any confidence level in the game by TTWO in the least – in fact I know they are extremely impressed with the current state of the game, having seen it just last week.

This DNF news is being completely misunderstood by those who read this

Is that you George? :D

It’s his partner, Scott Miller. I have this in my sig, but it doesn’t work (and yes I’ve told the profile to post my sig).

Aw, we know you guys are good businessmen at 3DRealms. It’s just that when you have a game that’s five years old and not finished yet. you’re an easy target.

Mark, this financial maneuvering by TTWO doesn’t have a thing to do with 3DR in the least. They paid Infogrames to buy the entire 3DR/Apogee catalog of games back in early 2000, and DNF was part of the package (which also including the several Duke console games, which were still making money). 3DR did not see a penny of this buy-out. For us, we simply got assigned to a new publisher (and thank god, Bruno Bonnel (sp?) is as clueless a CEO as Trip Hawkins – we were lucky to escape, and certainly IFGMs stock has plummeted since that time, while TTWO’s has soared).

Anyway, DNF is and has been entirely funding by 3DR and us alone. There’s no cost to TTWO. They cannot point a finger at us and say we’re costing them money. When we hand them the gold master, it’ll all be profit, except for any portion of that $12M fee that they attributed to DNF.

A little known fact, too, is that IFGM also originally had the rights to Max Payne, but I worked a deal to get that to G.O.D., and thus TTWO became the publisher. TTWO is in no position to complain. ;-)

Of course the other possiblity is they are looking to sell the publishing rights to someone else. Take the loss now so that any amount of money will look like a profit in the future. Also I imagine that whatever they are paying to have DNF ported to the gamecube was flushed as well.

Why would they sell the publishing rights if 3DRealms is self-funding? That’s a publisher’s dream. All the publisher risks is the marketing and COGs expense, and DNF will surely make that back.

Scott and George are sharp guys. They’ve leveraged one five year old blockbuster game into lots of wealth. The Duke 3D money let them fund Max Payne and look how that turned out.

Still, it’s fun to make fun of them for not getting DNF out.

They paid Infogrames to buy the entire 3DR/Apogee catalog of games back in early 2000, and DNF was part of the package…certainly IFGMs stock has plummeted since that time, while TTWO’s has soared

Let’s see here, December '99…looks like TTWO was around 18. Currently it’s at…20.91. Why, it’s soared 16% in three short years!

Well, when TTWO bought G.O.D., their stock was around $12. So, for us, it definitely has done well. We sold it all at an average price of $28.50ish. And we got a new boatload of TTWO stock when we sold the Max IP rights.

OTOH, the stock we got from GTIS (later bought by IFGM) in 1997 plummeted, losing some 95% of its value.

And yeah, TTWO’s stock is in the very low $20’s now (thanks in large part to the pending war, which has slammed practically everyone’s stock), but it’s recently been as high as $31. IFGM’s stock has always trended lower, and lower, and lower. Frankly, I don’t know why companies like Epic would want to continue their relationship with IFGM. High profile devs can always work stock into the equation (Id got $5M worth of ATVI stock for DOOM3), and therefore you want to go with a strong publisher, not one that may not even be around in a 1-2 years.

Scott Miller

Lynne Thigpen, the voice and lips of the DJ in The Warriors, died last week. I was really hoping they’d hire her to reprise the role for the game.

Good night sweet princess, and may a flight of middle-aged dorks without musical accompaniment sing thee to thy eternal rest.

So is the writing in DNF as good as the writing in Max Payne?

>>> So is the writing in DNF as good as the writing in Max Payne?

I hope so – we’ll happily take 3.6 million sales. ;-)

Seriously, though, the writing in both Max 2 and DNF is significantly improved.

Scott, CEO
3D Realms

Man, people knocking the writing in Max Payne are on crack. I loved the style - it was deliberately pulp. The plot was a bit cheesey but it fit in with the theme of the game.

It’s hard to say. I know some people argued that Max Payne narration was so over-the-top it was funny by design, but it didn’t seem to have the right tone to be parody. The story was rather grim.

It’s hard to tell with the hardboiled stuff. I think this is meant to be funny:

“Her breasts were so full and firm and abundant that each of them might have been both of them.” from Everybody Had A Gun by Richard Prather.

This, from Max Payne, just doesn’t work as humor:

“The sun went down with practiced bravado. Twilight crawled across the sky, laden with foreboding.”

I didn’t find Max Payne funny, I just found it a great pulp narrative wrought as a game. It’s not as funny as say… Very Bad Things, but it works nicely on a Payback level. Just because it’s crude fiction doesn’t mean it’s bad - the style suited the game and vice-versa.