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<< Previous   of   Next >> Rockstar Games  (click to enlarge) A screen shot from the long-awaited "Grand Theft Auto IV." Associated Press  (click to enlarge) In Los Angeles, three 10-story-high murals promote the debut of "Grand Theft Auto IV."   ADVERTISEMENT   Related Stories • So many ways for teens to go wrong 4/29/08   CONTACT THE HERALD Mike Benbow, Business Editor benbow@heraldnet.com   Published: Tuesday, April 29, 2008 New 'Grand Theft Auto' debuts today Fourth edition of video game is expected to be blockbuster Los Angeles Times It's the video game that launched a $2 billion takeover war. "Grand Theft Auto IV" is expected to have one of the biggest debuts in entertainment history when it hits stores today. Analysts predict it will ring up more than $400 million at retail in the first week, topping "Halo 3," which in the fall smashed the previous record with $300 million. The "GTA" franchise, which lets players enact a host of criminal activities, has stirred up controversy with its sexually explicit and violent fare. This time, it's also generating corporate drama. With its eyes on the blockbuster game, Electronic Arts Inc. has offered $2 billion for Take-Two Interactive Software Inc., the game's New York-based publisher. Take-Two has told its suitor it's not willing to consider a deal, at least until after today. Company executives believe the game's launch will give its stock a turbo boost and force EA to sweeten its price. The 10-year-old franchise has sold more than 65 million copies worldwide so far. In the past, each installment has outsold the last, and "GTA IV" is widely expected to top "Grand Theft Auto: San Andreas," which has sold more than 14 million copies since its launch in 2004. Some analysts expect "GTA IV," which retails for $60, to ultimately sell 18 million copies and ring up nearly $1 billion in retail sales. Analysts say about 80 percent of that would go back to Take-Two as gross revenue, and the other 20 percent to retail outlets. So to a potential acquirer, the franchise would be worth "in the neighborhood of $700 million to $800 million," said John Taylor, managing director of Arcadia Investments, which owns shares of Take-Two and Redwood City, Calif.-based EA. That's roughly 70 percent to 80 percent of Take-Two's market capitalization, when its stock traded between $13 and $17 a share in the months prior to EA's February offer of $26 a share. EA's overall bid remains at $2 billion, but it lowered its per-share price to $25.74 to account for 2 million additional shares recently issued by Take-Two for executive compensation incentives. Take-Two's shares gained 6 cents to $26.20 Friday. "Historically, people have felt that this game has a lot to do with the company's valuation," Take-Two Chairman Strauss Zelnick said. "But as we develop more hits like 'BioShock' and 'Civilization,' we've become a much more diverse company. That said, 'GTA' is the 1,000-pound gorilla." To its fans, "GTA" represents a singular experience. Created by Rockstar Games, now owned by Take-Two, the games generally revolve around a gangster plot. The first two versions sold well, but the third, 2001's "Grand Theft Auto III," raced off the charts. It lets players roam around a gritty urban environment, steal cars and run errands for various unsavory mob bosses while being chased by the police. Competitors tried to mimic its success, including EA, which released "The Godfather" in 2006. But none took off. "'GTA' speaks to a certain audience in a way that no other game does," said Geoff Keighley, editor of Gameslice, a Web site that covers the game industry. "They're movie buffs. They're music buffs. But they're not necessarily game buffs. I had friends who would go out and buy a console just to play this game, even though they wouldn't play any other game." Many "GTA" games could be played only on Sony Corp.'s PlayStation 2, at least when the games first came out, which many analysts said helped cement the console's success. This week, however, the game will debut simultaneously on the PlayStation 3 and Microsoft Corp.'s Xbox 360. Early reviews of "GTA IV" are glowing. "As a fan, my expectations were exceeded," said Ricardo Torres, editor of GameSpot, a game review site. "It's what 'GTA' was always meant to be, but couldn't be because of the technical limitations of the previous consoles. With the current hardware, they have a canvas that lets them paint whatever they want." The game industry is hoping that "GTA IV" helps boost its fortunes by giving reluctant consumers a reason to buy a console during the holidays. That would help other publishers, too. "A lot of people expect this game to kick off the industry's sales in earnest," Taylor said. Still, acquiring Take-Two carries risks for EA, the No. 1 game publisher. Although the series shows no signs of flagging, fans could grow tired of future versions. Also, the brains behind the franchise, lead developers Sam and Dan Houser, could move on when their employment contract ends in February.

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