For video game maker Take-Two Interactive (NASDAQ: TTWO), crime really does pay.
Helped by record-breaking sales of its Grand Theft Auto V title, Take-Two this week posted sales of $148.8 million – or $1.27 billion when adjusted for sales of the anarchic sandbox crime game through the first 13 days after its September 17 launch. Earnings per share for the quarter ending Sept. 30, including those GTA V sales, came in at $2.49, a record for the company and steep jump from the 11 cents a share the company posted in the same quarter of 2012.
Take-Two publishes plenty of popular titles, including the Bioshock, Borderlands and XCOM franchises, but Grand Theft Auto is in a class all its own. Known for bundling biting social satire with gleeful anarchy, the GTA franchise has always been something of a cultural phenomenon. This latest installment is no different – except when it comes to the costs and profits involved.
Rockstar, Take-Two's subsidiary, made a bold bet on the blockbuster project, sinking a reported $265 million dollars into it. The game took more than two years to develop and boasted a team of over 1,000 people. The investment rivals that of most major Hollywood movies, and the game’s sales put it on par with the worldwide box office take of many blockbuster films, including Iron Man 3 and the penultimate Harry Potter film.
What's more notable, though, is the sheer speed at which these profits came rolling in. While movie theaters are often crammed on opening weekends of summer blockbusters, their opening numbers pale in comparison to GTA V's. The last Harry Potter movie, raked in a record $483 Million for its opening weekend. Even this, though, pales in comparison to GTA V's opening, which blew past the $800 million mark in just three days. To be fair, a movie ticket costs around $13 while a new video game sells for $60.
Take-Two had already announced that the game had reached $1 billion in sales in just three days, much faster than any previous title. The title has sold over 29 million copies worldwide. The company’s latest earnings report suggests that some of that momentum will continue this quarter and into 2014.
This quarter, Take-Two launched an online Grand Theft Auto world to lure players and keep them spending. Taking a page from mobile apps like Candy Crush Saga, GTA players can exchange actual dollars for in-game money to use in the game’s virtual world. And with next-gen consoles like the Xbox One and PS4 coming soon, Grand Theft Auto V looks to be a cash cow that Take-Two will be milking for a while to come.
Take-Two's numbers outline a steady trend that threatens to usurp the silver screen. The kids of the ‘80s and ‘90s – those who grew up puzzling over Zork, trying to rescue the princess from yet another castle and developing strange calluses from their N64 controllers – have grown into full-fledged adults. They're still gaming, but they're demanding grown-up games with style, substance, and story – and they're willing to pay for it.