TTWO reports a $500 million week:
GTA IV's First Week: 6 Million copies, $500 Million, (TTWO)
Vasanth Sridharan | May 7, 2008 6:38 AM
Take-Two was hoping for a monster first week from their landmark franchise, Grand Theft Auto. Did they get it?
The NYT reports that Take-Two (TTWO) will announce today that GTA IV has sold 6 million copies in its first week, generating $500 million at retail. That works out to an average of $83 per unit, but GTA IV retails for $60 in the U.S. So we're assuming that a good chunk of those sales came from overseas.
Those are eye-popping numbers. The real question: Exactly how good are they? The NYT says that it's about 20% better than analyst predictions of 5 million units. We'd previously reported, incorrectly, that analysts had higher expectations.
Today we'll see what the market thinks. TTWO shares have been hovering in the $26 range for the last week; Electronic Arts (ERTS) has offered $25.74 for the company. 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.
alleyinsider.com
A $500 Million Week for Grand Theft Auto
May 7, 2008
By MATT RICHTEL
SAN FRANCISCO — Grand Theft Auto IV, the latest iteration of the hit video game franchise, racked up first-week sales of $500 million, Take-Two Interactive, the game’s publisher, plans to announce on Wednesday. The report exceeded the sales expectations of analysts.
The company is expected to report it sold six million copies of the graphically violent game, 3.6 million of them on the first day.
The sales exceed projections of industry analysts who were estimating that some five million consumers would purchase the game in the first two weeks.
The significance of the sales extends beyond buoying Take-Two, a company that has had its share of legal, financial and management struggles in the last few years. The company is the subject of a $2 billion hostile takeover effort by Electronic Arts, which is offering Take Two shareholders $25.74 a share for control of the company. 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.
On Tuesday, Take Two’s shares closed at $26.35, up 29 cents.
Electronic Arts’ takeover bid turned hostile after Take-Two management said that it would not negotiate an acquisition agreement with Electronic Arts — or any suitor — until after the release of Grand Theft Auto IV. Now that the game is out, Take-Two may well have entered discussions with Electronic Arts and possibly other suitors who covet the Grand Theft Auto franchise, but Take-Two has declined to comment on whether such discussions are taking place.
If Take-Two and Electronic Arts wind up doing a deal, there is pressure on Electronic Arts and also on some Take-Two shareholders to get one done quickly. Electronic Arts has said that it needs to get a deal in time to subsume Take-Two’s assets before the holiday selling season.
Take-Two’s management has said that the success of Grand Theft Auto IV is awakening shareholders to the long-term value of the company’s stock and that if investors can be patient it can command a higher price in the long term.
Copyright 2008 The New York Times Company
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