BioShock buoys Take-Two shares

On Friday, Take-Two Interactive stock ended the day's trading at $12.02. The same day, glowing reviews began to pile up for the publisher's Xbox 360 and PC game BioShock. While critical acclaim doesn't always translate into commercial success, investors took note of the praise and pushed the stock up in anticipation of the game's Tuesday release. By the close of trading yesterday, the stock was up more than 21 percent to $14.55.

While that jump is welcome news to a company whose stock has been down since it announced the delay of Grand Theft Auto IV into 2008, not everyone is feeling the enthusiasm over BioShock.

"Bioshock looks great, but its not the next GTA," warned Nollenberger Capital Partners' Todd Greenwald in a note to investors. "While we were impressed by the quality of Bioshock, we are concerned that investors' expectations may be getting carried away. While many initially expected Bioshock to be a modest hit and sell 500,000 to 1 million units, it now seems clear to us that it may sell in the 1.5-2.0 million unit range. However, with the stock up over 20 percent in the last few days, we have heard of expectations in the 3-4 million unit range, which we believe are unrealistic."

Greenwald mentioned the "unbelievably strong" Metacritic average of 97 for the game, but pointed out that it is being released on only one console so far, and that the first-person shooter style of play is traditionally suited more to hardcore gamers.

"The game is very dark, very complex, and will have a hard time penetrating the mass market, in our view," Greenwald said.

While Greenwald noted that Gears of War was a fairly hardcore Xbox 360 exclusive that found commercial success (2.4 million copies sold in the US alone according to the NPD Group), he thinks BioShock's situation is significantly different. Specifically, Greenwald said Gears of War was more accessible, and benefited from better marketing support and a holiday release window. Finally, Gears of War didn't have to compete with Halo 3, which is set for release in five weeks on September 25.