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Chris

Microsoft Paid $50 Million for GTA IV DLC

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If you're wondering why it seems that only the Xbox 360 version of Grand Theft Auto IV is getting downloadable content, the reason is possibly because Microsoft have paid a whopping fifty million dollars for it.

Stock analysis website SeekingAlpha have referenced last weeks press release from Take-Two regarding it's financial results and a conference call in relation to that, where it is revealed that the $50 million "Deferred revenue" figure is actually coming from Microsoft, who will pay Take-Two $25 million for one downloadable episode in March '08 and the other $25 million later on in fiscal '08 for the second episode. We can assume from this that these are likely to be the dates when we will actually receive the content, although it's not certain.

It's a long article to read in full but this is the quote which confirms the above:

as it relates to the deferred revenue chunk associated with the episodic content on X-Box 360, you can see that $25 million of that moved into short-term deferred. Could you give us any sense of when that’s going to hit the P&L? Will we see $25 million at one time and then the second 25 or will it be a slow bleed?

The first 25 is for the first episodic content package that’s supposed to go out and that is in March of '08. That’s why it moved into current because it’s in the next 12 months. The second 25 will be for the second episodic, the episode, and that will be later in fiscal '08.

This screenshot below shows part of the financial results with the deferred revenue figure being talked about above: (in '000s)

50million_dlc.jpg

What we're trying to work out is where exactly Microsoft are getting their money back and profiting from this. Clearly they are doing this to help sell consoles as well as copies of the game, but even then, not everybody is going to buy the content, and assuming it will be priced at 800 points (that's $10) - 5 million people would have to download the content just for Microsoft to break even. The actual price is not yet known and it's very possible that it will cost more than this.

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Hmm, thats interesting. Since I don't have a XBox360 yet, can anyone explain to me what this point system is? 800 points means what?

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Ah, I had a feeling. So they haven't moved away from Sony and PlayStation at all. To be honest I can't see the downloadable content being anything amazing, for the simple fact that they are only supporting one console, but I guess it's really to early to say.

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wow, this is why microsoft is one of the biggest company in the world, they even concentrate on ONE game!

i bet Sony Playstation has another strategy to beat microsoft ;) , but lets face it, they are few points ahead than sony

i guess R* wouldn't have to worry about money for a while huh? :lol:

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I dunno what the whole points thing is, but I would say Microsoft has control over how many points an item recieves, so it's at their discresion as to what an item is rated, it can't represent the actual quality of it. Try and remember MS is down 50 million, so they will be looking for extra cash to fix the investment.

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Well with the PlayStation 3 you only have to pay for games and everything else is for free.

but still, there's no downloadable content on PS3, and those points are made for downladable, you play for nothing, no money down.

i think the advantage is for the Xbox 360

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Well I knew there was money involved but I think $50 million is quite a bit, Chris said 5 million people would have to buy it to break even and theres only about 11 million 360 owners in the world. I think they could lose money on this

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50 million doallars ? Who they kidnapped ? Chelsea Clinton ?

I knew that M$ has lots of money, but 50 mills for some DLC ... Still, M$ are the richest company ... Let`s not underestimate their way of making bussines, altough I doubt they`ll get some profit out of this ...

50 million doallars ? Who they kidnapped ? Chelsea Clinton ?

I knew that M$ has lots of money, but 50 mills for some DLC ... Still, M$ are the richest company ... Let`s not underestimate their way of making bussines, altough I doubt they`ll get some profit out of this ...

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I never liked episodic games like Sam & Max, but this could be different maybe one episode can upload another with new vehicles and people, weapons and places.

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Does anyone know how many people are on Xbox Live? According to VG Chartz they have sold around 10million consoles, So would more than half be signed up and would they want to pay for this extra content? I think they will loose some money on this.

But $50 million just for downloadable content? They surely want this to sell well, but we are talking about MS here, $50 million would be nothing to them :P

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Well with the PlayStation 3 you only have to pay for games and everything else is for free.

but still, there's no downloadable content on PS3, and those points are made for downladable, you play for nothing, no money down.

i think the advantage is for the Xbox 360

Yeah there is, they have the PlayStation Store. But he's right, that is one advantage of the PS3 is that you don't have to pay a subscription fee for online gaming.

Does anyone know how many people are on Xbox Live? According to VG Chartz they have sold around 10million consoles, So would more than half be signed up and would they want to pay for this extra content? I think they will loose some money on this.

But $50 million just for downloadable content? They surely want this to sell well, but we are talking about MS here, $50 million would be nothing to them :P

Yeah well I was told that there are just over 2 million subscribers, a lot more than the PS3 apparently too (at the moment) obviously since they've been going for an extra year. I'll have to check up on that though.

I personally think MS are losing money on this, in the short term anyway. $50m is nothing to them though, if you take a look at their figures from their balance sheet for Operating Profit you'd see it is a LOT higher than $50m.

@Jared: I would imagine the price to download the DLC (in points) is agreed on between the publisher and Microsoft.

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Well with the PlayStation 3 you only have to pay for games and everything else is for free.

but still, there's no downloadable content on PS3, and those points are made for downladable, you play for nothing, no money down.

i think the advantage is for the Xbox 360

Yeah there is, they have the PlayStation Store. But he's right, that is one advantage of the PS3 is that you don't have to pay a subscription fee for online gaming.

Does anyone know how many people are on Xbox Live? According to VG Chartz they have sold around 10million consoles, So would more than half be signed up and would they want to pay for this extra content? I think they will loose some money on this.

But $50 million just for downloadable content? They surely want this to sell well, but we are talking about MS here, $50 million would be nothing to them :P

Yeah well I was told that there are just over 2 million subscribers, a lot more than the PS3 apparently too (at the moment) obviously since they've been going for an extra year. I'll have to check up on that though.

I personally think MS are losing money on this, in the short term anyway. $50m is nothing to them though, if you take a look at their figures from their balance sheet for Operating Profit you'd see it is a LOT higher than $50m.

@Jared: I would imagine the price to download the DLC (in points) is agreed on between the publisher and Microsoft.

Well actually the PS3 has over 1.8m people signed up to the PlaystationNetwork, and they have only sold 3m consoles.

EDIT: Sorry, after doing some research the PSN has over 1.5m signed up (Not 1.8). But still, that's half of the people who own a PS3 have signed up!

Edited by ŠHẩĐõŴ

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Would it be wise to expect a pretty competitive price drop to comprehend the $50 million, and tbh, if the eposodic content is much like the addons already out I can bet that they will charge 2200 MS points much like Shivering isles. GTA 4 is going to be a massive seller as we all know but Microsoft are riding a lot on this game. If the change from 'cartoony' visuals and gameplay to more realism doesn't work out and people reject the game (which is deffinitly a possibility that we can't rule out) then who the hell will even buy the content? Looky for Gatesy that he is a rich bitch and is stepping down in a year or so :P

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Well I know I will get it. Most true GTA fans such as myself will do anything to get our hands on more content for GTA games. If it costs 2200 points then so what, I'm gonna get the content no matter what, I love GTA that much.

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Well I know I will get it. Most true GTA fans such as myself will do anything to get our hands on more content for GTA games. If it costs 2200 points then so what, I'm gonna get the content no matter what, I love GTA that much.

I love GTA too man but again, we can't rule out the possibility that the new approach may put some off, hope to god it doesn't *touching wood as i type*. To be fair and honest, I was actually going to buy the PS3 just for GTA4 because as we all know, there is something cool about reminissing the good old days of waiting in line at 12am, getting home and powering up the PS2 :P maybe it's just me...

Hope it works out for microsoft though, I know R* were questionning the abilities of both consoles, Hope they don't become biased towards the 360 because of the 5000G's Microsoft is shooving in their faces, that sort of money can put anyones concentration anywhere! who knows, R* may even port the 360 version!?! :o Crazy but possible!

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Well I know I will get it. Most true GTA fans such as myself will do anything to get our hands on more content for GTA games. If it costs 2200 points then so what, I'm gonna get the content no matter what, I love GTA that much.

Roger that. If you really like GTA, and want to seem smart when talking about it on online message boards, then you'll buy the content.

Oh and there are strong rumors of a 360 price drop to $199 for the Core and $299 for the Premium.

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