Grand Theft Auto IV Scores Record Sales

Take-Two basks in the glow of sales that exceeded even the most optimistic estimates.

First week sales of video game Grand Theft Auto IV scored a decisive victory for its publisher, Take-Two Interactive, with consumers around the world buying up more than 6 million copies of the gritty, urban action title. Sales of the game generated more than half a billion dollars, the publisher said today.

The game, released April 29, has come in for near-perfect scores from game reviewers, and analysts had long expected a solid opening, but none ventured sales of this magnitude. The dual figure of unit sales and revenues makes the launch the biggest ever for video games, and one of the biggest opening weeks in all of entertainment.

"Grand Theft Auto IV's first week performance represents the largest launch in the history of interactive entertainment, and we believe these retail sales levels surpass any movie or music launch to date," said Take-Two chairman Strauss Zelnick.

Grand Theft Auto IV steals the hearts, minds, and wallets of consumers across the globe; racks up more than $500 million in sales in just one week.

Grand Theft Auto IV's sales surpassed those of last year's best-selling title from Microsoft, Halo 3. That title established a new, single-day sales record of $180 million dollars.

Take-Two estimates that on its first day, GTA IV sold 3.6 million copies and generated $310 million in sales, far surpassing Halo 3's performance.

The sales of GTA IV have additional meaning for the game's publisher Take-Two. The company was counting on solid sales to strengthen its negotiating position with competitor Electronic Arts. EA and Take-Two have played a game of cat and mouse since the beginning of the year when it was revealed EA hoped to buy Take-Two for $2 billion dollars. Zelnick has said all along that the offer was ill-timed, and that EA undervalued the company. Zelnick said he would be happy to discuss a sale, but only after the release of GTA IV.

Sales figure reported today vindicate Take-Two's strategy, clearly establishing a new perspective for both parties.

But do the sales mean the deal will accelerate, or grind to a halt?

Industry analyst Michael Pachter of Wedbush Morgan Securities said the sales tally will have "no impact at all" on the negotiations.

"The first week performance, however spectacular, was 'expected' by EA, and was already factored into their offer," said Pachter today. "Electronic Arts will raise their bid by a reasonable amount, I'd say no more than $2 a share," he speculated.

Janco Partner's Mike Hickey is less certain the deal will move forward.

"If EA remains dogmatic with their current $25.74 a share bid, we continue to believe EA's current bid has no chance of being successful," Hickey said after the sales figure was released. He believes strong sales will likely "shift leverage" to Take-Two, meaning EA will have to ratchet up its offer for the buyout to proceed--or it may have no choice but to walk away from the bargaining table.

Regardless of which direction the negotiations between Electronic Arts and Take-Two moves, the entertainment industry has a new darling to celebrate, Grand Theft Auto IV.