On eve of GTA release, Take-Two shares slip

  • By Curt Feldman, GameSpot
  • Posted Oct 25, 2004 5:31 pm PT

The price of success takes it toll on Grand Theft Auto publisher as share price dips on the Nasdaq; analysts look for what's due post-GTA.

The good news is you have the single most sought after title of the year. It's the game every reviewer wants to be locked in a room with; the game every gamer is ready to skip class or work in order to play. So wildly sought after is the virtual crime spree that factory workers involved in the CD's pressing are willing to risk criminal prosecution to pilfer the game--just to play it a few days early.

The bad news? The single most sought after game is, effectively, your only triple-A product, and that's just not good enough for Wall Street.

Such is the predicament Grand Theft Auto: San Andreas publisher Take-Two finds itself in today, the eve of the game's worldwide release.

With industry analysts checking in with sales figures that range from first week tallies of half a million in the US to more than four million worldwide, the boon to publisher Take-Two seems measurable in terms of units moved, but elusive in terms of effect those projected sales have on its stock price.

Jupiter Research vice president Michael Gartenberg told GameSpot today, "We don't project formal sales numbers," but he still checked in with visions of sugar plums for the publisher. "There's no doubt that GTA will be one of the hottest titles of the season, [and] in a holiday season likely to be driven by software, this is going to be a major title that could easily sell a half million units in the first week."

Reuters was uncharacteristically vague, but still pulled a figure out of its hat. Declining to reveal analysts by name, in a story today it referenced sources that indicated to it that worldwide sales of 4.5 million during the game's first week are a possibility.

The fallout on Wall Street from all this excitement? Surprisingly, the stock closed down over a dollar today to $31.49--toward the low end of the company's 52-week range of $27.84-$40.43.

Investors aren’t the only ones yawning. Earlier this month, Southwest Securities downgraded Take-Two from a "strong buy" to "neutral." Banc of America Securities analyst Gary Cooper actually downgraded Take-Two today, from a "buy" to "neutral."

Reportedly, he downgraded the stock based on the lack of any significant product releases in the company’s pipeline. "Beyond GTA, there remains no other blockbuster releases in Take-Two's lineup," said Cooper. "We have only moderate expectations for Rockstar's releases after San Andreas."

A survey of analysts by First Call/Thomson Financial sees 19 analysts covering the stock, with 10 analysts rating the stock "hold," five a "buy," and four a "strong buy." The consensus isn't awful, but it isn't stellar, either.

Retailers GameStop and Electronics Boutique, both in line to benefit from whatever is selling this week, were on either side of the win/lose column: EB shares were up a modest $.15 to $32.77, while GameStop shares closed down $.07 to $19.20.

Gamers can soon come to their own conclusion as to how they value the work of Take-Two and its game publishing arm Rockstar Games (as well as the game's developer, Rockstar North). Grand Theft Auto: San Andreas goes on sale tomorrow.

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