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Grand Theft Auto V is around the corner…or at least the trailer is
Shares of Take-Two Interactive surged 6 percent on Tuesday. But it had nothing to do with activist investor Carl Icahn, who owns a chunk of the company or any rumors about the company's earnings on Nov. 8.
What happened is that investors looked at the website of Rockstar games, the Take-Two-owned studio behind the Grand Theft Auto franchise. Its website had been replaced by a large Grand Theft Auto logo and a Roman numeral V wrapped around a banner saying "five."
Gamers have been salivating for GTA 5 since 2008, when the last game in the series came out, so much so that at least one analyst has said that the game could sell 25 million copies in its first year.
But the timing, price, features or any other details are not yet known. The only clue the company revealed is on its website: the trailer is coming out on Nov 2.
Dan Houser, one of its renown game developers, gave an extended interview to Gamespot last week to commemorate the 10th anniversary of the third version but was mum on new details about the newest game.
When the last version came out in 2008, it made over $500 million in its first week of release. The game has been criticized for glorifying crime, street violence and drunk-driving.
E3: Strauss Zelnick dishes on Wii U, Zynga and why foie gras tastes better than chewing gum
Take-Two Interactive occupies a massive booth at the Los Angeles Convention Center, where it’s showing off its new games and serving beer at the elaborate sports bar it constructed on the show floor. Under its CEO, Strauss Zelnick, Take-Two has been showing renewed financial health in recent quarters. In February, it posted its first profitable year in nearly a decade without a new release of its blockbuster video game franchise “Grand Theft Auto.” Zelnick sat down with Reuters for an in depth chat touching on everything from Nintendo’s new console to Zynga’s business model, and the difference between foie gras and chewing gum.
Reuters: Are publishers on board more than ever before with Nintendo on the Wii U?
Zelnick: Well, It’s hard to know, right? At E3, there’s always a great deal of enthusiasm, as there should be. It remains to be seen what the releases schedules look like. We do think it’s pretty interesting. What they are doing with one display in your hands and the other display that’s wireless in front of you and the ability to have them work independently as well as together, creates a lot of interesting creative opportunities and that’s what we’re looking for. We’ll see how our creative teams feel but right now it looks pretty interesting.
Reuters: Will the touchscreen appeal to the mass market?
Zelnick: It all depends on the execution. You can take that product and execute a kid’s game that’s simple or take that product and do something that’s very complex. It remains to be seen. And that was what was exciting about the Wii. We supported the Wii in the beginning. If you recall, we did “Carnival Games” for the Wii and we also did “Manhunt 2” for the Wii, so we did do an adults-focused title. As it turns out, the Wii turned out being more interesting from a family and kids point of view. It remains to be seen how the Wii U plays out but obviously it’s interesting. We support it. We love all our children equally and we support everyone.
Reuters: You launched a new franchise recently, “L.A. Noire” and a year ago you launched another entirely new franchise, “Red Dead Redempion.” How hard is it to launch new intellectual property in this landscape?
GlobalMedia-Ghosts of Atari haunt gaming sector dealmakers
The video game sector is often seen as being particularly ripe for consolidation, with some expecting old line media giants such as Time Warner to swoop in and scoop up a publisher to diversify their entertainment rosters.
But Strauss Zelnick, chairman of “Grand Theft Auto” publisher Take-Two Interactive, remains surprised by the lack of action on the consolidation front. “I think the legacy media companies have not been especially aggressive about interactive entertainment,” he said at the Reuters Global Media Summit in New York on Wednesday. His company, of course, fought off Electronic Arts’ hostile takeover bid in 2008.
“I have to admit there are times when I’m surprised they’re not more exposed.”
He said media world executives have long memories, which may explain in part their reluctance to buy a video game outfit. He said one name in particular, Atari, remains a cautionary tale. Warner Communications bought the iconic video game name in 1976 in what turned out to be a disastrous deal.
“The people who have run companies have all been around long enough to remember the Atari debacle that almost destroyed Warner Communications, and they just can’t get it out of their minds. Never mind that we’re not in the cartridge business anymore, never mind that was a licensed product, never mind that that it was badly managed situation. They just can’t forget that it almost tanked Warner Communications and actually changed the balance sheet of the company.”
That kind of skittishness isn’t warranted, he argued, maintaining the video game industry is “less volatile and less risky than their motion picture businesses.”
“If I were managing one of the old media business, heaven forbid, I would be integrating heavily into interactive entertainment because it’s a growth business.”
Take-Two to EA: Check us out in private
Video games company Electronic Arts has just updated Wall Street on the latest stage in its drawn-out $2 billion bid for Take-Two Interactive Software with news that it will allow its tender offer to expire at midnight New York time.
But Take-Two, maker of the Grand Theft Auto video game franchise, said it is now willing to provide a management presentation to EA containing non-public information in connection with the bid such as its three-year product release schedule and financial projections.
EA and Take-Two’s chief executives exchanged letters over the weekend and had a phone conversation on Friday.
Here’s an excerpt from Take-Two chairman Strauss Zelnick’s letter to EA Chief Executive John Riccitiello dated Aug 17:
The Company has made significant strides since EA first expressed interest in the Company….I believe our presentation will enable you to understand better the value of our Company to EA.
Here’s an excerpt from Riccitiello’s Aug 18 response:
Grand Theft Auto IV is cruising
That was fast. Already, in its first week, Grand Theft Auto IV sold more than 6 million copies globally, rocketing past expectations that were hardly modest to begin with.
So what is it with this game? Well, for one thing, it has been praised by gamers and critics alike who hail it as satirical and multi-layered, the equal of films like “The Godfather” or TV shows like “The Sopranos.”
Made by Take-Two Interactive Software”s Rockstar studio, the game also has its share of detractors, who say it’s too violent and sends the wrong message to kids and young adults. Given the big sales the first week, the criticism doesn’t appear to have hurt its popularity.
But the real question is what does more than $500 million of first week sales of GTA IV mean for Take-Two?
Silicon Alley Insider says this: “Take-Two management has long argued that Wall Street didn’t understand what a hit GTAIV would be. When they did, the argument held, they’d bid the shares up. Time to find out. ”
And the Wall Street Journal points out, “Depending on how the sales figures impact shares of Take-Two, they could strengthen the company’s argument that videogames rival Electronic Arts Inc. needs to raise its unsolicited bid for Take-Two above $2 billion. EA has launched a hostile tender offer of $25.74 for Take-Two shares, which Take-Two has rejected as too low.”
Keep an eye on:
“If Take-Two can exceed sales expectations on Grand Theft Auto IV, it has the potential to drive up the share price and force Electronic Arts to raise its offer,” The Times reported in an online article on Wednesday. As we just learned from the flameout of any Yahoo-Microsoft deal, however, the personal relationship between the key players can often be a critical factor for advancing a deal. Indeed, the close personal connections between the members of both EA’s and Take-Two’s Boards of Directors could serve to bring a deal to a satisfactory conclusion for both companies.
Grand Theft Auto’s very own Craigslist
It hasn’t been the easiest week for Craigslist, which is getting sued by minority partner eBay after spurning a buy-out offer. So pity Craig Newmark when he settles down for a nice, relaxing game of Grand Theft Auto 4.
The game, released this week, takes place in a ridiculously detailed virtual world that even has its own satirical Internet. Bloggers write on “blogsnobs.org,” porn sites abound, and there’s a free classified site called “craplist.org.” Real-life blog Some Bits has the description as it appears in GTA4:
“Craplist was started in San Fierro in 1995 by some basement dwelling sociopaths with the simple mission of creating a computer-based online forum where users can sell stolen bicycles and meet up at lunch time and [content bleeped out because MediaFile is a family-friendly blog] … Capitalists don’t understand us. Newspapers hate us. Stalkers love us. Craplist is here to stay. We are you.”
Actually, except for the stalker reference, maybe Craig will find some inspiration in that last bit.
Grand Theft Auto 4, delivered
There were indeed fans lined up along the streets of New York City awaiting the launch of Grand Theft Auto IV on Tuesday morning. According to the experts, they will not be disappointed.
Even the New York Times lavished praise of a sort on the video game from Take-Two Interactive’s Rockstar studio: “‘Grand Theft Auto IV’ is a violent, intelligent, profane, endearing, obnoxious, sly, richly textured and thoroughly compelling work of cultural satire disguised as fun.”
Though the vast majority of gamer blogs were even more emphatic in their love of the game, there were bound to be many naysayers if only because “GTA” deals with such edgy content, in this case an Eastern European immigrant who runs drugs, shoots cops and beats up prostitutes. The Parents Television Council thinks retailers shouldn’t carry the game according to Variety magazine.
Keep an eye on:
- Rupert Murdoch’s $580 million bid for New York’s Newsday, the Long Island newspaper, puts the News Corp chief on a collision course with the U.S. regulators. (Financial Times)
- Clear Channel Communications said a Texas court dismissed a request by a group of banks to delay a trial over funding for the $20 billion buyout of the radio station operator. (Reuters)
- Blockbuster is in talks about taking a stake in a new Viacom-led premium television channel that plans to compete with HBO, Showtime and Starz. (WSJ)
What will Microsoft do about Yahoo?
Things could get complicated soon in the saga of Microsoft’s quest to acquire Yahoo, since the software makers deadline for what was origianlly seen as a friendly deal — at the right price — passed this weekend without Yahoo saying “I Do.”
Now, that amicable offer could get downright hostile. Analysts say they believe Microsoft is planning to launch a hostile bid at its current price of $31 per share in cash and stock.
Three weeks ago, Microsoft said it will go hostile, or even call off its bid, if Yahoo did not agree to a deal before this past weekend. Now, Microsoft executives are poised to play their next card.
Keep an eye on:
- Teen Star Miley Cyrus apologozed for posing seminude in provacative photos. Disney Disney Channel backed up the rising star, saying — “a situation was created to deliberately manipulate a 15-year-old in order to sell magazines.” (Reuters )
- “The Takeaway”, a rival pulics radio morning show, launchs, adding a little competition for the popular news show “Morning Edition.” (WSJ)
- Grand Theft Auto IV’ may drive up Electronic Arts’ bid for Take-Two (Los Angeles Times) (Reuters)
(Photo: Reuters)
