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Analyst: 2 million Lost and Damned, next GTA by Nov. '10

Wedbush Morgan's Michael Pachter expects first Grand Theft Auto IV DLC to go double-platinum by October 31; raises rating on Take-Two stock, believes new full game due during publisher's next fiscal year.


Last Friday, Microsoft triumphantly announced that Grant Theft Auto IV: The Lost and Damned had "eclipsed first-day revenue for all previous downloadable content on Xbox Live." The software giant also played up the fact that the Xbox 360-exclusive expansion--the first of two due this year--was the "highest-reviewed downloadable content ever from Rockstar Games."

Profits for life, Lost forever!
Profits for life, Lost forever!

What Microsoft didn't do was offer any sales figures for The Lost and Damned, which won't be tracked by the retail-focused research firm the NPD Group. Today, Wedbush Morgan analyst Michael Pachter stepped into the breach, estimating that the $20 add-on has sold more than 1 million units to date. The game-industry cognoscenti went on to predict that it will go on to sell more than 2 million units by October 31, the end of Rockstar Games parent Take-Two Interactive's fiscal year.

Pachter went on to say that he considers Take-Two a "one-hit wonder." Luckily, that one hit is the Grand Theft Auto series, which the analyst is confident will haul the publisher's stock out of Wall Street's basement. Initially valued at $26 a share in Electronic Arts' rejected buyout offer last year, Take-Two stock was trading under $6 as of press time--still almost four times as much as General Motors, and nearly six times as much as Citigroup.

However, Pachter upgraded his rating on Take-Two today from "hold" to "buy," and set a target price of $10 for its stock. He pointed to Take-Two's recent signing of long-term contracts with Rockstar Games founders Dan and Sam Houser as ensuring a steady stream of top-quality GTA games for the foreseeable future. That's in addition to the all-new franchise the brothers are working on, possibly exclusively for the PlayStation 3.

"We acknowledge that this upgrade may appear early in light of the company's cautious outlook for near break-even results in fiscal year 2009," wrote Pachter, before making an industry-rattling prediction. "However, we believe that the company's share price fully reflects the cautious guidance, and disregards a potential GTA release in fiscal year 2010, as well as better performance in the future." (Emphasis added.)

Pachter went on to say it was a "reasonable expectation" for the next GTA to arrive sometime between November 1, 2009 and October 31, 2010. That means that the next game in the series could hit anytime: Although installments in the series traditionally shipped during October, last year Grand Theft Auto IV launched in April after months of delays. He also believes that it's likely the next batch of GTAIV DLC will arrive after Take-Two's current fiscal year ends in October.

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