Executives at Electronic Arts have to be kicking themselves right about now.
It appears that Take-Two Interactive, the video game publisher EA has been trying to buy for the last couple of months, has a potentially record-breaking hit on its hands with Grand Theft Auto IV. And EA isn't pocketing the cash.
While it's too early to know exactly how many copies of GTA IV sold Tuesday, the game's launch day, anecdotal evidence suggests it will likely be one of the most successful launches in the entertainment industry's history--if not the most.
"We are saying that the launch of this game is tracking to be one of the top three best-selling games," said Chris Olivera, vice president of corporate communications for GameStop, "not of just this year, but the top three games in (our) company's history."
The latest title in what was already one of the most blockbuster game franchises of all time, GTA IV hit store shelves Tuesday morning with midnight madness events nationwide. The game had sparked controversy, with some politicians and critics calling for retailers to avoid selling it, but that didn't seem to dissuade consumers.
"Thirty-five hundred of our stores nationwide did midnight launch events," Olivera said. "One thing was constant through all of it, that there were lines around buildings and down mall corridors" wherever GameStop's stores were.
Last year, Microsoft took the unusual step of releasing first-day sales figures for its mega-hit Halo 3 because that game set the all-time entertainment industry record for launch day sales, $170 million.
While we may not know if that's true until industry analyst firm The NPD Group reports April sales early next month, there's reason to believe the Halo 3 record will be short-lived.
Partly, that prediction stems from reports that GTA IV publisher Take-Two said it had worldwide preorder demand of 6 million copies of the game--or about $360 million worth at the game's $60 price tag.
There are also comments, like those expressed to CNET News.com sister site GameSpot by Wedbush Morgan Securities analyst Michael Pachter: "There is no question that GTA will be huge. I think that the game will sell 11 (million) to 13 million copies by calendar year end, with probably 4 million the first week."
On the other hand, suggested NPD analyst Anita Frazier, if GTA IV breaks the Halo 3 record, Take-Two might find a reason to release the game's first-day sales numbers itself.
The console factor
One interesting difference between the launch of GTA IV--which was released for Xbox 360 and PlayStation 3--and its predecessor, the hugely popular GTA: San Andreas, is the install base of the consoles the games are available on.
Frazier said that when GTA: San Andreas was released in 2004, there was already an install base of 25 million PlayStation 2s, the only console that game was initially released on. By comparison, GTA IV is coming out earlier in the release cycles of the Xbox 360 and PlayStation 3.
"The combined install base of the PS3 and Xbox 360 now sits at 14 million," Frazier said, "and surely huge hardware numbers will be driven by the release of GTA IV.
"This (game) is definitely drawing people into (GameStop) stores to also pick up hardware," Olivera said, "both the Xbox 360 and the PS3."
Another metric of the intense interest in GTA IV: statistics from Gamespot's Trax service, which measures site traffic for specific games.
According to Gamespot Trax, Gamespot users did 70,441 searches for "Grand Theft Auto IV" in the 30 days prior to its release, vs. 20,772 for Halo 3 and 10,598 for Guitar Hero III, another one of the best-selling games of all time.
So, as Take-Two's executives are no doubt popping champagne and toasting the massive initial success of their new game, one has to wonder what the thinking is over at EA and whether it will have to modify its $2 billion bid for Take-Two.
As Lazard Capital Markets analyst Colin Sebastian told me Monday, "The expectations for GTA were already justifiably very high. EA understood that when they made their bid...Every day that passes, they're (going to be) losing out on GTA revenues, so they're likely to lower their bid over time...But if GTA massively exceeds their expectations, that could be a scenario where EA might have to raise their bid."
In the meantime, stay tuned to see if Take-Two issues any press releases about GTA IV Wednesday. If it does, I'm willing to bet that will mean Halo 3's record will be history.