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GTA worth $900 million; look to PSP for future of franchise
Research analysts Jason Kraft and Chris Kwak have determined an answer to the question, "What's Grand Theft Auto worth?" Parent-company Take-Two has been rocked by some troubles of late. With rumors that the company is for sale, and that Elevation Partners is browsing around, the question has been on a lot of minds lately--ours included. First, they anticipate only two next-gen GTA games hitting the consoles in the next five years, versus the three current-gen titles. In the same period, they say "there is potential for up to six PSP titles (five, post Liberty City Stories) over the next five years," continuing, "Take-Two could develop unique PSP games between major next-gen console releases or ports of existing titles. Shorter development cycles on PSP enable Take-Two to release PSP titles more frequently. The regularity with which Take-Two releases GTA titles on PSP will be critical to the franchise’s revenue growth in the next-gen cycle and underlies our revenue growth forecast."They also suspect console releases will either be released on multiple platforms, to capitalize on the larger install-base, or console exclusivity would place Take-Two "in a position to demand cash in return... in either scenario, Take-Two wins." They conclude that the Grand Theft Auto franchise is currently worth about $900 million, or $10-$13 per share. Removing the $1.52 per share of cash reserves, the remainder of Take-Two is worth $1.71-$4.71 per share. Those numbers show GTA as being worth 62%-81% of the company's total value! Will potential buyers be wary of placing all their eggs in the GTA basket?Send an email to kraftandkwak [at symbol] sig.com for a copy of the report.
More Grand Theft Auto speeding onto the PSP
Grand Theft Auto's publisher, Take-Two Interactive, gave PSP fans some joyous news this week as they reported on their lackluster financial results for Q4 and 2005.Among several ho-hum announcements (including, ironically, that a port of Liberty City Stories is in the works for the PS2), was the big news that PSP fanboys worldwide can expect another original Grand Theft Auto title in 2006. Additional details were sparse, but we'll take what we get when it comes to more portable GTA goodness.More info is expected at E3 later this year.
