The numbers are in and they are impressive: Take Two Interactive racked up more than $500m in just one week from sales of Grand Theft Auto IV, the fourth installment of its blockbuster video game franchise.
Anaylsts had predicted sales of around $400m. GTA IV also smashed the previous, $300m record for opening week sales, which was set by Microsoft’s Halo 3 Xbox title.
The ultra-violent and surprisingly nuanced game has been widely praised by gamers – both the Playstation 3 version of the title and the Xbox edition have achieved “universal acclaim” (and scores of 99/100) on Metracritic, which aggregates reviews.
But it’s not just gamers and critics who’ve been won over; Wall Street analysts are similarly impressed, noting the strong performance of the title may strengthen Take Two’s bargaining position with Electronic Arts, which launched a hostile $2bn bid for its rival in February.
Take Two rejected EA’s offer as too low, and said it substantially undervalued the company. Moreover, Take Two chairman Strauss Zelnick had refused to enter discussions with EA until after the game’s launch. That strategy appears to have paid off.
As UBS analyst Ben Schachter told Reuters: “These ratings are quite extraordinary. It’s something special and helps us understand why Take-Two was so confident and adamant that they wanted to wait.”
GTA IV isn’t the only video game that’s found favour on the Street. Last week, Viacom reported a 33 per cent increase in first-quarter, helped by strong sales of its addictive Rock Band title.
And then there are the comic books, or more accurately, big budget movies based on comic book characters. Take Iron Man, for instance. The movie – based on the Marvel comic of the same name – scored $100m in its opening weekend, and helped lift Marvel’s shares by 9 per cent.
Marvel’s next release, The Incredible Hulk, hits cinemas next month, while Iron Man 2 and Thor are due in 2010, The company will release Iron Man 2 in 2010, along with a big screen adaptation of Thor. A Captain America movie will follow in 2011, as will The Avengers, in which Iron Man, Hulk, Captain America and Thor – will unite on screen.
What makes Marvel even more compelling in the current environment, according to Joseph Hovorka, a media analyst with Raymond James, is that it’s not very closely correlated with the wider economy:
“When you are talking about spending eight to ten dollars on a movie ticket or toy, that is a lot less economically sensitive than buying a $20,000 boat….So content drives that [type of company] more than the economy.”