Take Two pins its hopes on Grand Theft Auto

Amid the furore surrounding the violent content of video games, which may soon be forced to carry cigarette-style health warnings, a new release of one of the most controversial but successful franchises is set to play a crucial role in the grittiest takeover battle the sector has seen in years.

Grand Theft Auto IV, a dark adventure in the seedy underworld of Liberty City, promises to be the biggest computer games event of 2008.

The game's success is critical to the future of Take Two, its manufacturer, which is trying to stave off a $2 billion bid from Electronic Arts, its larger rival.

Despite its violent and amoral content, some believe the game could sell as many as fivemillion copies in its first week, generating more than $300 million (£149 million) at retail.

The Grand Theft Auto franchise is the best-selling console game devised by a company not tied to one of the major hardware manufacturers. More than 70 million games in the series have been sold this decade, according to Take Two. The last major release in 2004, Grand Theft Auto: San Andreas, sold 21.5 million copies.

With its gritty urban environment, Grand Theft Auto is particularly popular in North America and Europe. Ed Barton, a games analyst at researcher Screen Digest, said that the game “is one of the few AAA games that can actually persuade people to go out and buy a console”.

Despite worries about violence in computer games, Grand Theft Auto IV is not expected to make any politically correct compromises. The game is based on a series of open-ended missions - in one, the hero Niko Bellic has to assassinate somebody laid up in hospital. Visits to strip clubs are also part of the gameplay.

Electronic Arts has promised to respect Grand Theft Auto's edgy heritage to ensure that the game's key developers stay loyal if the company was to succeed with its bid.

Take Two is sensitive about making predictions about the next Grand Theft Auto but it does forecast that Rockstar, its publisher, will “represent 60 per cent of our publishing revenue in fiscal 2008” , with the game itself representing a significant portion of that. The company's turnover is expected to hit $1.4 billion in the year to October - a little over half of which will come from publishing its own games.

Despite this upbeat outlook, Take Two is finding that it must prove that it is the best owner and distributor of Grand Theft Auto. Some analysts believe that Electronic Arts's greater size and more sophisticated distribution operation means that it would be able to sell more copies.

Take Two does, however, have arguments in its favour. It claims that Electronic Arts is valuing it at only 18 times future profits, whereas Vivendi was willing to value Activision at 29 times in its recent takeover. That, though, will mean nothing if Grand Theft Auto's sales disappoint in the first week after its launch on April 29.

Source [Business.Timesonline]