Microsoft paid $50m for 2 exclusive GTA4 episodes

[Podfork]

An interesting story over at texyt (http://www.texyt.com/Microsoft+pays+$50m+for+GTA+4+episodes+00111) details just how persuasive Microsoft could be. No, no horse heads in Sam Houser's bed, instead:

Microsoft is paying an unprecedented $50 million for exclusive rights to publish two episodes of the forthcoming game, Grand Theft Auto IV, on its Xbox 360 games console, according to statements from a senior executive at GTA IV publisher, Take-Two Interactive.

Take-Two has already recorded the payments in financial filings as deferred revenue, explained Lainie Goldstein, Take-Two's newly appointed CFO, in a conference call with analysts.

Interestingly..

The unprecedented scale of the $50m deal is indicated by the fact that it exceeds Take-Two's average quarterly revenue of $43 million received from all its Xbox 360 titles combined.

So the cost to Microsoft was $50m. How much will the cost to the consumer be and, just as importantly, out of Microsoft, Rockstar and the consumer, who benefits the most from this transaction?

[MaiXu]

The wording is a bit unclear ... is that "episodes" as in "iterations of GTAIV," meaning GTAIV and GTAIV Vice City (or its inevitable equivalent) are only going to be on the 360? Or does it mean only two episodes (as in, downloadable content episodes) will be 360 exclusive?

Well, dumbass, read the article! It appears that fifty million bones for two downloadable episodes. Which means you know MS is going to charge out the ass for these once they hit Live. And it also means MS hugely overpaid for such a small feather in its cap.

[Rirath]

Well, the consumer gets more content than would have, presumably, otherwise been available. That is, if MS is funding this content being made rather than just insuring it's exclusive to Live. While I'd like to keep wishing this stuff would be free, downloadable content or 'chapter' is just the new way to say 'expansion pack'.

[Norse]

It's good to see that Bill Gates still spend money on charity....

[Gorvi]

That's kinda nuts. I mean, is it really worth that much? Shit, the game isn't even exclusive, just 2 "episodes" that people are going to have to pay extra for anyway.

[Vandenh]

If GTA sells 3 million and each episode would be $10 they will have the money back ;) (and maybe 500K extra 360s due to having the best version of GTA?)

I guess it all depends on how big these episodes are and how good GTA will be. If they are Shivering Isles kind of stuff everybody will be happy.

So the cost to Microsoft was $50m
Not sure about that... it looks like this Take-Two report is just about expected revenue from these episodes not money paid now.

The big gap between releases points to pretty big episodes...

[johnymitsu]

sounds interesting. oh well i love me some gta and its very likley ill be buying these episodes the day they come out.

[Dr.Finger]

Wow. It shows how important the GTA franchise really is.

[bapenguin]

People are looking at this wrong. Now Microsoft can't use the world exclusive on the GTA Box. It's a marketing strategy.

In a sense they can trick consumers into thinking that GTA IV is Exclusive in to the XBox 360. Simply tag on the end of a commercial - "Exclusive GTA IV Episodes Available on the XBox 360" and there ya go. People don't even have to buy the episodes for Microsoft to get a return on the investment.

[Rirath]

It's good to see that Bill Gates still spend money on charity....

Oh please. Don't start. You know good and while how much money that man gives out to humanitarian causes, and the what his foundation has done on that front. If you don't, educate yourself.

Let's face it, $50 million ain't what it used to be in the days of Google buying a company for 3.1 BILLION. The old "shocking" amounts have changed, just look at the Hollywood movie budgets and salaries.

[DangerousDaze]

This is the kind of stunt that gets Microsoft into trouble for anti-competitive practices. They are using overwhealming finiancial might to influence an important market and I wouldn't be surprised if this wasn't questioned at some point.

[JazGalaxy]

whats' funny about this is how low the completion rate for Grand Theft Auto games is.

That is to say, people don't WANT more missions. They don't finish the ones they have.

The want new playable chracters, weapons and environments, better graphics and interactivity. That's why they buy new GTA games.

I can't expect to see anyone getting excited about expansion pack material.

[CaptStu]

This is the kind of stunt that gets Microsoft into trouble for anti-competitive practices. They are using overwhealming finiancial might to influence an important market and I wouldn't be surprised if this wasn't questioned at some point.

The last time I checked, Sony was a multi-billon-dollar company too. They had a chance to pony up. Capitalism at its best. :)

[Telefrog]

This is the kind of stunt that gets Microsoft into trouble for anti-competitive practices. They are using overwhealming finiancial might to influence an important market and I wouldn't be surprised if this wasn't questioned at some point.

What? Questioned by whom? This isn't some kind of unfair business practice. Sony is free to match or beat the MS offer. It's not like Sony doesn't have the financial clout to make it happen. In fact, I'm sure behind closed doors there was some negotiations about it between Take Two and Sony. They passed, so now we will see who is the wiser.

[Skyelan]

This is the kind of stunt that gets Microsoft into trouble for anti-competitive practices. They are using overwhealming finiancial might to influence an important market and I wouldn't be surprised if this wasn't questioned at some point.

Yeah. I'm sure the handful of times that companies were told to suggest that something was PS3 exclusive for a while, even if it never was, was just them asking REEEEAAAAL nice.

No one can resist Krazy Ken's puppy eyes!

[fitbabits]

This is the kind of stunt that gets Microsoft into trouble for anti-competitive practices. They are using overwhealming finiancial might to influence an important market and I wouldn't be surprised if this wasn't questioned at some point.
Yeah, kinda like EA Sports with the NFL license.

Don't think for a second that Sony wasn't offered this chance - they just didn't take it.

[D.D.D.]

The last time I checked, Sony was a multi-billon-dollar company too. They had a chance to pony up. Capitalism at its best. :)

And who's to say that Sony didn't pay for GTA:VC and GTA:SA's 1-year exclusive run for the PS2? They might have but we never heard a number like $50 million about those~ :eek: (At least not that I recall...)

[CaptStu]

And who's to say that Sony didn't pay for GTA:VC and GTA:SA's 1-year exclusive run for the PS2? They might have but we never heard a number like $50 million about those~ :eek: (At least not that I recall...)

Exactly. It is what it is.

[Dukefrukem]

This sounds like a move the Yankee's would do if they were just trying to outbid the Red Sox.

[menage]

Yeah. Not condoning practices like this. But Sony hasn't got a real clean slate in Marketing either, and neither has Nintendo. This is just business. We will see how it works out, but I find the move quite smart.

[Dukefrukem]

I dont disagree with it. I just think its waaaay overpaid. Considering they already said in the article this is over 100% of Take Two's income on all 360 games combined.

[Bydo_Empire]

I don't know that platform-exclusive DLC will really factor into people's purchasing decisions. Exclusive GAMES, sure, but just some bonus missions? It's probably something for the back of the box, like BA says. Especially since people don't know what the bonus missions are ahead of time.

[Dukefrukem]

I don't know that platform-exclusive DLC will really factor into people's purchasing decisions. Exclusive GAMES, sure, but just some bonus missions? It's probably something for the back of the box, like BA says. Especially since people don't know what the bonus missions are ahead of time.

i agree with this, but, Microsoft will make a ton of money off the price of downloading the exclusive content... look how much they charge for 3 Songs on Guitar Hero.

[beefyjr]

I don't know that platform-exclusive DLC will really factor into people's purchasing decisions. Exclusive GAMES, sure, but just some bonus missions? It's probably something for the back of the box, like BA says. Especially since people don't know what the bonus missions are ahead of time.
While nobody knows for sure what shape the content is going to take, I'd like to think that Microsoft knows better than to throw $50m away on some bonus missions that Rockstar could shit out in a couple of weeks. Let's hope it's something substantial that warrants both the cost on Microsoft's end and on the consumer's end.

[Arglor]

the burning question on everyone's mind after reading this, what is 50 million dollars worth in bonus "episodic content"?

I can't wait to find out.

[DangerousDaze]

The financial health of the two competing groups are very different, as are the relative sizes of the two corporations. SNE's market cap is just 54.6B as compared to MSFT's 293.1B.

Don't get me wrong, I believe in capitalism just as much as the next western consumer. I'm just pointing out that using raw financial muscle to sway a market has traditionally got MSFT in trouble in the past. ;)

[vash]

i see no problem in the amount of money spent, there are enough people on live who would pay 2$ to get a new hairstyle ^^


So the cost to Microsoft was $50m. How much will the cost to the consumer be and, just as importantly, out of Microsoft, Rockstar and the consumer, who benefits the most from this transaction?

im sure the consumer is the last one on that list of benificiaries ;)

[epyon]

Prob will get it for PS3 anyway. I think *** is gonna charge people alot for this (15-20 I bet). Which leads us to question if there gonna be enough content in these things to be worth the high price tag.

[vherub]

this is great, microsoft's patronage is allowing rockstar to create content that otherwise would not have existed. The game will still be available on multiplatform, but ms rather than steal the entire game, has created an incentive to buy their edition.
MS wins, rockstar wins and gta gamers win.
Sounds good to me.

[Rune_74]

Why is everyone assuming its just going to be missions....imagine if you will they add whole areas to the game....even doubling the area....which version would you buy then as a consumer?

[Ancalagon]

Considering that $50 mil is more than Take Two makes from all of their other games combined for the 360, I'm surprised that GTAIV itself isnt exclusive.

Take Two has been bought and paid for like a $50 million hooker. so now we hope that their services dont disappoint, and that MS passes these onto the consumer without a 1 billion % markup.

To be honest I'm not sure whether this as much about making money from episode sales as it is MS kicking Sony when they are down. They have the larger install base, now they are going after titles that were traditionally Sony titles.

*edited for grammar, hope nobody noticed the mistake!"

[Reanimated]

So the best version of GTA is on the 360?

Nice.

[Yeti2005]

I think the 50 million is more than just the two episodes. While it doesn't officially say it, I think this probably includes:

1. MS's right to make the GTA announcement at E3 a year back (notice Sony didn't say anything at the event about GTA)
2. MS blocked a potential Sony time exclusive (it's launching the same day now)
3. Development funding for the 360 version

Is all that worth 50 million? Well NO ONE can make that call until after the game is released and we see the sales of the game itself and the episodes.

[Mr.Green]

Well it sure seems like a shitload of money but I guess they thought about it a little longer and in depth than a bunch of nerds on the internet. ;)

[Zanch]

We'll only know the true value of this deal once we see how much content these "episodes" are actually offering.

[Dr.Finger]

My guess - the episodic content will introduce a Long Island-like area of the game. Similar to the Shivering Isles expn for Oblivion.

[Varsity]

The want new playable chracters, weapons and environments, better graphics and interactivity. That's why they buy new GTA games.
Who's saying the episodes don't include some or even all of those things? Look at HL2 Episode Two.

[Ancalagon]

Who's saying the episodes don't include some or even all of those things? Look at HL2 Episode Two.

Unfortunately I'm constantly reminded of Episode 1: 4-6 hours gameplay, one or two new monsters and no new weapons.

[Stryfe01]

This is the kind of stunt that gets Microsoft into trouble for anti-competitive practices. They are using overwhealming finiancial might to influence an important market and I wouldn't be surprised if this wasn't questioned at some point.

Alright this is dumb. This happens all the time. Why are people hating? Sony did the same thing. The only thing is they managed to not disclose how much they paid to Take Two. Once more, Take Two wasn't under this much scrutiny either at that time. Give it a rest, MS is not doing anything different than what others have. The just have the money to spend this time, where Sony does not.

[Rirath]

Don't get me wrong, I believe in capitalism just as much as the next western consumer.

Tangent time.

The longer I live, the more I'm starting to think I don't.
As Wikipedia says in it's critics section:

Some problems claimed to be associated with capitalism include: seemingly unfair and inefficient distribution of wealth and power; a tendency toward market monopoly or oligopoly (and government by oligarchy); imperialism, various forms of economic exploitation; and phenomena such as social alienation, inequality, unemployment, and economic instability.

Not that I have a better solution, mind you. I just hope we all find a new, better system some day in the future. Capitalism and Democracy as we know it right now are the best we have, but everything can be improved upon.

Maybe I've just watched too much Star Trek lately.

[DangerousDaze]

I think it was Sir Winston Churchill who once said "No one pretends that democracy is perfect or all-wise. Indeed, it has been said that democracy is the worst form of government except all those other forms that have been tried from time to time." ;)

[Ancalagon]

Not that I have a better solution, mind you. I just hope we all find a new, better system some day in the future. Capitalism and Democracy as we know it right now are the best we have, but everything can be improved upon.

This is a whole other debate, but I kinda agree these days, I think we can do better, but people are too afraid to let go or clamour for change. One of the reasons for this is, quite simply, greed. If you can get people to think there is a 1 in a million chance that will be rich beyond their wildest dreams, they will take that chance.

Also, it could be argued we dont have very good implementations of democracy and capitalism in the world today. Look at the USA - corporations influence the goverment a huge amount, they can lobby for their own laws. And are immune to legal proceedings, because incorporated individuals arent generally responsible for what their their company does. So world democracy is fucked over by capitalism.

The EU seems to be doing good in this regard, they dont seem to take kindly to corporations.

[Rirath]

This is a whole other debate, but I kinda agree these days

Well put, nice post.

[Metal Jesus]

Honestly, this is smart...cuz it's one more reason why I DON'T need to buy a $600 PS3 to play one of my favorite games.

[oldjadedgamer]

And don't forget that this could mean lots of "marketing support" or simply lowered royalty rates from MS instead of a straight cash payment.

[IrishWhiskey]

I think it was Sir Winston Churchill who once said "No one pretends that democracy is perfect or all-wise. Indeed, it has been said that democracy is the worst form of government except all those other forms that have been tried from time to time." ;)I think it was Abraham Lincoln who once said "If you are a racist, I will attack you with the North."

[BGSS]

I can't beleive that even some of you are disappointed that they (the episodes) won't be free. You obviously have NO IDEA how much time, money, and effort goes into making something like downloadable/episodic content (weather it's funded my Microsoft or not). A single level of a game can take months of time from several (moderately high paid) men/women to perfect, so it's extremely ignorant to expect something like extra episodes to be free. Grow up people.

[Rirath]

Grow up people.

Because telling people over the Internet expressing a different view to 'grow up' is the height of maturity.

I'm not sure anyone said they should be free. I mentioned something to the effect that it'd be nice if we still got extra content for free these days, but no, I don't expect whole chapters for free. As I said, it's the modern term for 'expansion pack'. I didn't mean that as a negative.

[Ancalagon]

I can't beleive that even some of you are disappointed that they (the episodes) won't be free. You obviously have NO IDEA how much time, money, and effort goes into making something like downloadable/episodic content (weather it's funded my Microsoft or not). A single level of a game can take months of time from several (moderately high paid) men/women to perfect, so it's extremely ignorant to expect something like extra episodes to be free. Grow up people.

By the time development has proceeded that far, adding on extra content shouldnt be that hard. the tools will be in place, lots of content will already be there.

Besides, such considerations aside, do we need to care how much it costs them? We pay hard earned money for games, sometimes for little in return. And let us not forget what a feather in MS' cap it would be if they were free.

[JCtheMC]

The EU seems to be doing good in this regard, they dont seem to take kindly to corporations.

We certainly don't.
Remember the whole deal with the integration of Windows Media Player and IE in Windows XP? MS paid a hefty sum for that, and they definitely will not be the last corporation that gets bumfucked for not playing by the rules.

Edit and Ps.: It's not like we're going to overcome capitalism anytime soon, so the best thing a government could do for it's people is fuck corporations out of their excess money, so maybe we can build an extra school or 2 or give a teacher a raise. The EU actually does this.

[karak]

When it comes to consoles Sony has an incredible trackrecord for the same kinda stuff.
Its one of those things that you just have to accept. But I also think its good to offer the game on a format that actually has a large number of users.

[DarkDaY]

That's kinda nuts. I mean, is it really worth that much? Shit, the game isn't even exclusive, just 2 "episodes" that people are going to have to pay extra for anyway.

its worth if they can afford...and they can, its crazyto me, but im sure ms thinks in different terms.
Call it an investment that they can easily afford.
They want the market, and they will get it at all costs apparently.

O, and for all the people bitching about the cost of the dl content..
how many times does the sane in here have to say it.

DONT BUY IT. YOU WONT BE FORCED

[atariv8]

To simplify what's being posted, it's the difference between a GTA lover (which there are a lot of) with no next gen system saying, "Hmmm, do I get the 360 or PS3?" or saying, "Damn, 360 has more levels, ring me up!"

It's not the money made from the downloads they're worried about.

[donkeydrop]

whats' funny about this is how low the completion rate for Grand Theft Auto games is.

That is to say, people don't WANT more missions. They don't finish the ones they have.



My thoughts exactly; very few people complete every mission in GTA games (I certainly don't). These add-ons better have some completely unique content or I can't see the interest.

[Tel Prydain]

My thoughts exactly; very few people complete every mission in GTA games (I certainly don't). These add-ons better have some completely unique content or I can't see the interest.
I'm pretty sure that $50mil is enough to buy some completely unique content. :)

[kickmybum]

I was going to post this as news, too, but I read through the whole earnings transcript with Take Two and, while it does say it will be reporting figures of $25 mil each for the first two episodes, it doesn't mention anywhere about that money being Microsoft's. It seems like that's an assumption.

[Johan]

If MS really did pay Take Two, I have only one thing to say: Waste of money.

/Yeah, I said it.

[NeoSuplex]

Fuck... there goes any hope of this content being fairly priced. Without the PSN to release their content on at whatever price the publisher deems right, MS is free to Strongarm Take 2 into XBL's pre-set overprices.
"Then I have risked all and lost..." -Zapp

[Tel Prydain]

Without the PSN to release their content on at whatever price the publisher deems right, MS is free to Strongarm Take 2 into XBL's pre-set overprices.
Bwa-hahahahahahahahahahaha!

[Johan]

Bwa-hahahahahahahahahahaha!

Now that's not quite fair. You are, after all, getting a deal in New Zealand on Marketplace pricing.

Others? Not so much...

Though I'm of the "don't buy it" camp, not the "bitch about it" camp, anyways!

[NeoSuplex]

Though I'm of the "don't buy it" camp, not the "bitch about it" camp, anyways!

I am firmly entrenched in both camps.

[Tel Prydain]

Now that's not quite fair. You are, after all, getting a deal in New Zealand on Marketplace pricing.

Not really - we just get ripped off by everything else....

[The-Cable-Guy]

It's all about marketshare.

There's no doubt GTA 4 is going to be one of the biggest upcoming releases, but the reason companies such as microsoft/sony "buy" exclusivity is to get greater marketshare. The games that are on each particular platform will dictate the sales of that particular platform, for example, the way Gran Turismo is one of the reasons most people are swayed to buying a Playstation (although GT is made in-house). The more consoles you have in the marketplace, the greater marketshare you have, the more power you have when it comes to dealing with 3rd party developers/publishers (because having more consoles in the market means your more likely to sell more of their games, and asking for additional exclusive content, or even outright exclusivity of the title, will come at a much cheaper price), and of course, that financial gain then allows you to be more competitive on console price etc etc.

I'm fairly sure the GTA 4 "bonus" for X360 will have some fairly significant content, i mean you don't pay that kind of money for a couple of extra weapons and a few different cars, and at the end of the day, if you are a GTA fan (or become one when GTA 4 is out) then you are going to want the content regardless of price (hence it needing to be significant, hence i assume the 50M spent on it's development). Or, perhaps you may be waiting for it's release to decide which console to buy, and of course you're going to want the bonus material, therefore a 360, and if you don't have a 360, you'll at least consider buying one.

Mission accomplished right?

[Johan]

It's all about marketshare.

^^^THIS coming from the cable guy! Damn monopolist! ;)

[The-Cable-Guy]

no comment :p

[Rotting]

I may be totally wrong but I recall something about the developer complaining about something like the lack of a required hard drive or blu-ray on the 360 because they found it limiting. Maybe it was a different game/developer. If that is the case then this is just a (smart) PR move on Microsofts part. I was just planning on waiting for the reviews to decide which is the better release and this content just may tilt the favour in Microsofts direction.

Prior to reading about this I was predicting the PS3 would have come out on top between the two releases.

[Psyks]

Clever move by Microsoft.

Sony's biggest stronghold outside of Japan is Europe.
GTA sells shitloads in Europe (hell it's a British franchise)
A lot of GTA players are not hard core gamers and haven't gotten a next generation console yet.
Even rumours of the 360 having slightly more things will help it sales wise and loosen Sonys historically tight grip on Europe.

[Ancalagon]

GTA sells shitloads in Europe (hell it's a British franchise)

British? its made in america and set in america, have you ever played it?

Only the addon for the first game - London 1969 - was set in the UK.

[Rotting]

British? its made in america and set in america, have you ever played it?

Only the addon for the first game - London 1969 - was set in the UK.


Funny, I was under the impression it was created and developed by Rockstar North in Scotland.

[Twigz'N'Berries]

whats' funny about this is how low the completion rate for Grand Theft Auto games is.

That is to say, people don't WANT more missions. They don't finish the ones they have.

The want new playable chracters, weapons and environments, better graphics and interactivity. That's why they buy new GTA games.

I can't expect to see anyone getting excited about expansion pack material.

....so who would need to have bought any of the Oblivion content?

[donkeydrop]

Well, MS is now making the laughable claim that this money was actually an advance, and that they're going to make it back. Even assuming that they can sell 5 million copies, that would mean that everyone who buys the game would have to be willing to pay $10 for the dl content.

Considering that there are at least 30% of consoles that are never connected to XBL (even for free Silver accounts), and that 20% of those on XBL would be an incredibly succesful download purchase rate, even an optimistic figure would be 700k purchases for each of the two add-ons. If both were priced at $10 this is only $14 million in revenue. As I said this is very optimistic, so there's no question that most of this money is in fact a "gift" to Rockstar for exclusivity.

[Johan]

Funny, I was under the impression it was created and developed by Rockstar North in Scotland.

True enough...

but would a true Scotsman say he was British? :D

Let's ask fitbabits!

[donkeydrop]

True enough...

but would a true Scotsman say he was British? :D

Let's ask fitbabits!


Anyone who says he is British is English.

[Ancalagon]

Anyone who says he is British is English.

I see what you mean, and I think you right!

[Durka-Dan]

This is the kind of stunt that gets Microsoft into trouble for anti-competitive practices. They are using overwhealming finiancial might to influence an important market and I wouldn't be surprised if this wasn't questioned at some point.

I agree with that. This is the reason why I shuddered when I first heard Microsoft was heading into the game business. Their business approach to most problems is throw money at the problem, buy out competition. This is exactly the kind of crap I didn't want to see in my gaming. Sony and Nintendo were always competitive but they also kept it above the belt and fought nice. Microsoft has always been known as a dirty player and shenanigans like this are the things that lead to lawsuits down the road. Microsoft, quit being such a party pooper. When console makers start having a say in 3rd party games, thats where I draw the line. Them is fightin words. :mad:

[fitbabits]

True enough...

but would a true Scotsman say he was British? :D

Let's ask fitbabits!
Yes, I would. Scottish first, British second. However, it bothers me when people think 'English' when they see or hear "British".

[Gorvi]

Yes, I would. Scottish first, British second. However, it bothers me when people think 'English' when they see or hear "British".
I doubt that's going to change, but it's really just foreign ignorance. Hell, most people refer to GB as a whole as "England".

[fitbabits]

I doubt that's going to change, but it's really just foreign ignorance. Hell, most people refer to GB as a whole as "England".
I know... Believe me, I know it all too well. :(