The Fallout of EA and Take-Two's Falling Out
Chris Morris of Forbes points out that in a five-month timespan, 2004's Grand Theft Auto: San Andreas actually outsold this year's blockbuster Grand Theft Auto 4 by a margin of 5.5 million to 4.8 million. A margin of less than one million copies may sound insignificant, but the greatly increased production costs involved in GTA4 mean that its premature sales slowdown isn't good news for Take-Two's profits.
Analyst Michael Pachter has another number to add to Take-Two's headaches: the Houser brothers have five months left on their contracts. As relayed by GamesIndustry, Sam and Dan Houser, producers of the GTA series, can expect to command more pay in their new contracts in February 2009. According to Pachter, Take-Two faces two options, both bad: the brothers either take a high bid from a competing publisher, leaving the GTA series without its rockstar auteurs, or they stay with the publisher but cost more money, eating into the company's profits.
If it seems odd to a gamer that news about a publisher centers on one game, it's deeply unsettling to investors. "What worries me is [Electronic Arts] saw everything [Take-Two] has in the pipeline and weren't impressed enough to make an upgraded offer," wrote Morris on a Shacknews comment predicting the stock plunge.
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What are the odds that the Housers end up at EA?
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I don't think that it is likely at all. It's just Pachter that consistently points that out.
The Housers has the best contract in the industry, making a lot of money each release of GTA.
If they end up at EA, they have to form a new studio, make new tech, create a new IP and they have to compete with GTA. If they stay, they will own that genre completely.
The last contract alos involved a lot of stocks, so they will also take a big hit financially if they leave.
And I don't think EA will pay them much more than they do to Will Wright or the Bioware Guys.
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