So Much Is Riding on Grand Theft Auto
This is it.
Yesterday's release of Grand Theft Auto V is the industry's next-to-last chance of regaining the relevance that's been in a state of decline for a couple of years. However, if Take-Two Interactive's wacky share-price action yesterday is any indication, the market doesn't like to stick to first impressions.
Shares of Take-Two opened 2% higher yesterday, but quickly shifted into reverse. The stock spent most of the trading day in negative territory, ultimately closing 2% lower.
This may not seem like a big deal. The initial pop could be deemed silly. Everyone knew that Tuesday would be the release date. After several instances of pushing it back, Take-Two's been sticking to it for months. The stock has also soared nearly 70% over the past year, so a little "sell on the news" wouldn't be a surprise.
However, the initial reviews coming in earlier this week were markedly positive. Metacritic -- a website that aggregates reviews across leading gaming sites -- finds that the average score out of a perfect 100 among dozens of vetted reviewers is an impressive 97 for the PS3 version and 98 for the Xbox 360 edition. This was in line with the 98 that Grand Theft Auto IV scored on its release five years ago. In short, the quality of the franchise appears to be more than intact.
Expectations are high. Wedbush Securities sees Take-Two moving 14 million copies of the game this month alone. By the time the dust settles, analysts see sales well north of $1 billion for the game.
There could be a stumbling block, though. Gamers are saving their money for November's murderers' row of releases. Activision Blizzard's Call of Duty: Ghosts, the PS4, and the Xbox One will all be hitting the market in two months.
Diehard gamers have been sliding in numbers in recent years, but they still show up for marquee releases. Grand Theft Auto V is clearly a tentpole title, but the same thing also used to be said about Electronic Arts' Madden franchise of licensed NFL games. Then the stock took a hit earlier this month when the publisher revealed that Madden 25 sold more than a million copies of the game during its first week of release. It had cleared 1.65 million copies during the first week of availability last year.
There's plenty riding on Grand Theft Auto V as development costs are reportedly hovering around $270 million. However, the stakes are bigger for the industry as a whole. You can be sure that if Take-Two Interactive fails to impress here, that the industry will turn its nervous attention to Activision Blizzard with its early November release.
Coming up short this month for Take-Two Interactive would be criminal.
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The article So Much Is Riding on Grand Theft Auto originally appeared on Fool.com.Longtime Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Activision Blizzard and Take-Two Interactive . The Motley Fool owns shares of Activision Blizzard. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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