Take Two Interactive (TTWO) Still Recession Proof?
Last week, Rockstar Games, a division of Take Two Interactive Software (Nasdaq: TTWO), released its first add-on to its blockbuster Vice City franchise. The interesting thing about this addition is that it’s can be purchased only through Microsoft’s (Nasdaq: MSFT) Xbox 360 live marketplace.
For those of you who missed the subtleties of this, lets break it down. One, they’re not spending the money on rebuilding a fictional Liberty City, but simply tweaking and adding updates to it. Secondly, the price on this update is closer to $20. Rather than the $50 charged for the Grand Theft Auto: Vice City IV Game.
Finally, this move to distribute the game through the Xbox Live format, basically online but accessed through the Xbox 360 consol, has to be a success for the teams at both Rockstar and Microsoft. This manner of distribution is about as ideal as they can get from a cost standpoint, which reminds us of some boardroom antics from last year…
Take Two had been fighting off a hostile takeover from Electronic Arts (Nasdaq: ERTS) for some time and has needed to give investors the proof they needed that an independent TTWO was in their best interests. EA’s central argument was that they could distribute games better. This kind of distribution channel pretty much negates that entire argument.
The last thing is we want to keep an eye out for how well this update does. In our current economic slump, even the game-industry once thought recession-proof, is seeing lower numbers. If this rollout works for Take Two, it will give new legs to their recession-resistance.
Companies mentioned in this article: TTWO, MSFT and ERTS.
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