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Microsoft Shells Out $50 Million For GTA IV Content
Ars Technica is reporting on the highly-anticipated downloadable content for GTA IV mentioned by Microsoft at last year's E3. It appears that, first off, that content is only coming to the Xbox 360. Secondly, Microsoft paid some $50 Million for the privilege. This is from a financials conference call held by Take Two, and a question about a deferred payment from Microsoft reveals the general release schedule for the content. "The first 25 [million] 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 [million] will be for the second episodic, the episode, and that will be later in fiscal '08."
So now when microsoft cant convince developers developers developers to only develop for microsoft platforms, they just pay them to only develop for microsoft platforms? Classic! This sort of thing used to be the subject of bad jokes and comical tales. Now its accepted business as usual. Sigh, I really hope that BOFH never becomes an acceptable business as usual type of norm ...
I'm a huge fan of GTA. I've played Vice City more than any game I've ever played. Still, this isn't enough to convince me to buy an XBox. Ugh. If they do the same on the Sony, I'll buy all of the content.
I don't respond to AC's.
Hey, if someone wants to pay me 50 million bucks, I'd write for any platform they want. Don't see anything wrong with that at all!
This is my sig.
I wont deny that id take the cash, but its still slimey ;-)
Companies paying off game developers for exclusive only content/games/accessories has been going on for along time.
So let's just sum up:
* Microsoft rushes a console out the door early and pulls the plug on the first Xbox mess due to the poorly designed hardware bleeding billions in losses
* They don't make the harddrive standard
* They throw a hissy fit over Java and gimp their system with an old DVD drive that actually has 1 gig less storage compared to last gen. 7 gigs for the 360 DVD vs 8 gigs for the Xbox DVD
Rockstar was quoted as saying before the 360 was announced "We pray we are faced with DVD all over again" when interviewed about what they wanted to see in next gen hardware. And Microsoft actually ends up making Rockstar work on a system with LESS storage after they were praying to not be stuck with the same 8 gig limit as last gen.
So now Rockstar is forced to gimp GTA IV not once, but in three areas:
1) Graphics - the PS3 and PC versions are both now gimped down to the weaker 360 graphics hardware
2) World size - the PS3 and PC versions are both now gimped down to 7 gigs - half of that in reality due to the massive seek penalty for going across one layer to another on DVDs
3) World size again - with the game being forced to be designed around the worst case streaming system - the harddrive less Core.
Microsoft is ruining next gen for everyone. No one would care if it was just 360s that were stuck with the crappy version of GTA IV, but Rockstar can't afford to waste money doing two completely different games, one real next gen for the PS3 and PC and a seperate gimped version for the 360.
So, thankyou Microsoft, you've gimped next gen for the entire gaming world.
Going with the whole monopoly thing, if your money is coming from a monopoly in one area, are you allow to start paying people out in other areas to exclude the competition?
Anyone know the legal issues around this, or is it acceptable?
Who knew the market for dead hookers was so crazy? I foresee a new application for Balmer's chair throwing skillz...
ad logicam Claiming a proposition is false because it was presented as the conclusion of a fallacious argument.
I haven't looked closely at the financials or at the details of the call, but couldn't part or all of the $50 million in deferred revenue also account for end-user payments for the downloadable content? For example, if each gamer has to pay $19.95 for an episode (or redeem same in x360 points, whatever), and they estimate a chunk of downloads, they might just be recognizing that deferred revenue now? I don't see how this is conclusive that MS paid $50M for the content... but maybe I'm missing something?
Last gen you had:
4/8gigs of storage for the PS2
4/8gigs of storage for the Xbox
but this gen you have:
3.5/7gigs of storage for the 360
25/50gigs of storage for the PS3
Absolutely insane. No wonder Microsoft is being put in a position to have pay huge money for Rockstar to tack on extra content to the game.
news at 11... oh wait
This is a perfectly logical move for them. Sure the price seems high, but GTA4 is guaranteed to get some undecided people onto the next-gen bandwagon. If Microsoft can make it seem like the 360 version will be the definitive and most complete version, all the 360s it would sell could give MS an overwhelming installed base advantage over the ps3, making moves like this unnecessary in the future. They're hoping for a killing blow, but I think this downloadable content would need to be pretty major to actually sway someone who was going to get a ps3.
The price tag may seem crazy, but the extra content is going to convince more than a few that the 360 version is the one to get. Between exclusive GTA4 content and Halo 3 on the 360, and the continued dominance of Wii sales and its future release lineup, the PS3 is going to be a hard sale even through the holidays.
For a long time, nerds have tried to figure out what the ??? stood for in the Soviet Russia jokes. Now we know...obviously, the ??? = a $50 million dollar payout from some Mega-Giant Software developer.
I don't remember any big outcry when Sony used the same tactic with the same franchise against Microsoft. Sony signed exclusivity deals for GTA 3, Vice City, and San Andreas when the Xbox was the new kid in the game. The difference being that they were timed-exclusives. I don't think the value of the deal was ever made public, but I'm sure it was much less.
Is this karma, irony, or both? I bought a PS2 for GTA 3, and now I'll buy a 360 for GTA 4 (among other things).
Expect to shell out at least $15 a piece for each of these "episodic" updates. I suppose this is really good news for GTA addicts who have X-Box 360's. Personally, I find it a disturbing trend that Microsoft is throwing money at developers to make them develop custom content for the 360. Nintendo and Sony don't have the treasure coffers of a Operating System monopoly to get that kind of money and do likewise. Even though this relationship seems like a win-win-win for Rockstar, Microsoft, and GTA players... I still don't like the idea of Microsoft influencing how my games are made. Imagine if Microsoft paid Irrational Games $100 million for the next Bioshock game. Microsoft could say "We want you to end the game on a huge cliffhanger. Then we want the last 10 hours of the game to be an X-Box only expansion." As a PC gamer, I'd be really freaking pissed off. But if MS threw enough money at Irrational, could I blame them for not doing it? I don't like where this is going.
In Soviet Russia, Microsoft pays YOU!
You can't recognize revenue for a service that has not yet been provided. Regulators will be all over your ass.
Heck, you can't even recognize revenue that you've already received for a service that has not yet been provided. If you sell something with a service contract attached, for example, you have to recognize the revenue for the service contract over the life of the contract, not at the time of sale, even though you collected all the revenue at the time of the sale.
That's why, when something is sold with a service contract, somewhere the price of the item and the price of the contract will be broken out. That way it's clear what part they can recognize up front (the item price) and what part must be deferred (the contract price).
It doesn't hurt to be nice.
No. end-user payments are MS revenue, not T2 revenue. It doesn't matter to T2 where MS gets the cash from.
Perhaps you don't understand what deferred revenue is. It means they received the cash, but aren't recognizing it as revenue in their financials until later.
The deferred payment from MS means that they won't be making the payment until later, though they have already secured the rights; this is completely different from deferred revenue. In terms of accounting periods, it means that MS won't be counting the expense until the second episode is available; this is because they need to state the expenses in the same period in which they state the revenues for the transaction.
Kinda flirting around with the base issue here, which is that MS and T2's financials are separate beasts, and even if MS defers the expense, it doesn't mean that T2 has to, or will. If T2 has already developed the software in question, then they should be stating the development costs ion the same period they state the revenue from sale, which should be the same period in which MS takes delivery.
Long story short, MS should declare $25 mil during the first year (period is approximate) the first half of the content is available; they should declare $25 mil spread in the period the 2nd part is available for purchase, prorated to some extent according to sales volume.
Take2 should realize their development costs split 50-50 between the periods MS took delivery of the product, regardless of when the product is finally sold to end-users; resale by MS has no bearing on when Take2 states its revenues, unless of course their revenues are based on some sort of percentage of sales (which they are not).
Note also that MS is a public company, and it would be extremely bad juju if a MS rep stated that they'd be making those payments unless they were absolutely going to be making them.
"Trolls they were, but filled with the evil will of their master: a fell race..." -- J.R.R. Tolkien on Olog-hai
I just pooped my cute little pants.
Run upstairs and ask mom what "deferred revenue" means.
HA HA, that funny, but I'm that anyone is suprised by this, Sony had Rockstar by the balls with the GTA series, that the games had to be released on the PS2 first and anything else months later. Now that over, and MS decided to do the smart thing and steal one of the PS biggest franchised right out from under them, with this extra content, does anyone here even think that Rockstar gives a krap what system their game sells on, if the console maker is throwing money at them, and the game is sure to sell on it.
yea, i got a PS2 for GTA 3, then when it came out on xbox i sold my PS2 and got a halo-box
No developer actually needs that much space, Dual-layer DVD is actually complete overkill when you consider large, immersive games like Zelda:TP, the Metroid Prime series, FF:CC, Price of Persia, etc, etc, etc, were released on disks that held only 1.5GB. Bluray on the PS3 was an enormous mistake, there is absolutely no excuse for a gaming being more than 8GB other than deliberate bloat.
--The universe will not be altered by forum threads, even those which are very wry. --Tycho Brahe (Penny Arcade)
That makes no sense.
The 360 game disc format is a Dual Layer DVD, 7GB... but honestly, with more and more cinematics moving to the game engine, that's not a limitation. I really don't understand what you are trying to say with your nonsensical quotation of "Storage" that has no basis in reality.
Want to know what's going on here?
Microsoft can't get the exclusive on GTA IV, so they are going for an exclusive on the expansion - a very smart thing to do. It has NOTHING to do with disc capacity, understand? Microsoft will make a mint on the Content downloads, and 360 owners will be happy that they get additional content not available on any other platform.
Content is intended for owners with a hard drive (20GB or 120GB drives) and a broadband Live connection. What's new about this? Sony required a hard drive for some games on the PS2... GTA fanatics will gladly pony up the cash for an Elite or replace their Premium 20GB drive with a 120GB drive.
I honestly can't understand why people bitch about Microsoft's downloadable content charges (or Sony's for that matter), unless the costs are excessive for the user. Reasonably priced Live downloads are good business, and until it gets cracked, it's a very solid model for everybody.
How could you sell out one of, if not THE, most infamous franchises? Is everyone in the video game industry soulless?
But at least Blu-Ray is doing well.
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Sony paid Rockstar for exclusivity for the GTA franchise for years. That kind of thing is not uncommon with console games.
In this case, GTA4 will be available on several platforms (Windows, PS3, 360), and only the downloadable content will be exlusive. And even then, Sony doesn't really have a proper online marketplace to sell downloadable content the way Microsoft does, so the "exclusivity" is pretty much academic.
In any case, this deal is far less exclusive or restrictive than previous deals Rockstar has made... it is actually a step in the right direction.
More likely, what happened was Take Two went to Microsoft and Sony, and said "We're doing GTA4 on both systems, but only one gets downloadable content. So people who buy a system for this game will buy the system that has downloadable content. Shall we start the bids at $10 million?"
Seeing as GTA is a system seller for a lot of people, the argument makes sense. That $50 million will sell more consoles than $50 million in advertising, so they still probably come out ahead.
Can we please refrain from using the term next gen to refer to the current generation of gaming hardware. Thanks
Sure - right after the sales of either the PS3 or 360 can exceed last get hardware (specifically the PS2) for at least three months.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
If they couldn't keep the content of the "Hot Coffee" fiasco hidden I'm sure it won't be too difficult for someone to liberate this XBOX 360 only content and slide it over to at least the PC version. Heck, for the chance to mess with an XBOX 360 exclusive I may look into the idea myself.
Microsoft decides to enter console market.
Bungie is well along in developing Halo
Microsoft buys Bungie
Halo becomes an exclusive release on xbox, PC/Mac versions are released later.
Microsoft has already established that they will pay to have exclusive content, it's actually a kinder gentler approach to
pay for exclusive content then it is to buy the company out and lock it in.
my 2 cents but I miss the days when Bungie was doing more than lip service to the oddballs that like gaming on Macs.
Unix, an obscure operating system developed by bored researchers in an attempt to get a better game playing experience.
"So now when Microsoft cant convince developers developers developers to only develop for Microsoft platforms, they just pay them to only develop for Microsoft platforms?"
"he who writes the code gets to choose the license, and nobody else gets to complain." Obviously money "convinced" Take Two just fine. You all are just mad that it's Microsoft instead of your favorite.
demo released showing the capabilities of the blue-ray disc at full capacity using dragonball z. You could battle anywhere on the planet, fly out of the planet and fly around a solar system consisting of a number of more planets. Microsoft is really slowing down progress here.
This basically means that T2 felt that they couldn't sell more than $50m worth of DLC for the PS3 (we'll assume that every PS3 sale lost will result in one sale for the 360 version of the game)...
I don't really want downloadable content anyway. I just want to get ALL of a game on a disc, I don't want to have to chase down bits and pieces to back up (if even possible) and the hassle of porting it to another system should mine break (if even possible). I don't want to have to wait for the rest of my game, or have to download anything to get the most out of my game. I agree add-ons make sense for something extra, like extra cars and tracks or roster updates in games or whatever, or extra multiplayer levels, but for the primary single player game you shouldn't really have to worry about downloading anything!
So its all ok that Sony bailed out Square when they got in over there heads with the final fantasy movie, but if MS does the same to help Rockstar (who has had financial problems for over a year) they are evil? It was a smart move for Sony back in 2001 and its a smart move for MS now. Just as Sony saved Square from the possibility of bankrupcy Microsoft has helped assure Take Two and Rockstar of making it through the coming fiscal year so that GTA IV can actually get published.
0 7/03/FF_160_rockstar?currentPage=1
http://www.wired.com/gaming/gamingreviews/news/20
That gives some insight into what has happened over the past couple years at Take-Two, its an interesting read, and most will agree after reading whats been going on that if anything the Sony fanboys complaining should be thanking MS since its likely that their favorite franchise may not have even made it to the shelf otherwise.
OK, my accounting knowledge stands corrected. I had thought, maybe, that MS and T2 could have entered into an agreement that MS will pay them $X on episode 1 and $X on episode 2 (presumably, from the XBLA revenues generated) and that T2 was deferring those ... but again, I'm no GAAP expert :)
First thing that pops into my head upon seeing this news is a punchline
I understand that end user payments are MS (through XBL) revenue, but clearly MS has to pay T2 a chunk of that, right? I mean, MS could have paid them $50M up front for eps1 and 2, and then when the end users pay for the episodes, it could be deducted from the payments that would be regularly due to T2 for the downloadable content. But again, I'm no GAAP expert, nor an accountant... thanks for the explanation!
Anything involving dragonballz negates any chance of it being progressive.
I understand what deferred revenue means... but I don't see why MS couldn't have agreed to pay T2 up front for the content based on what -normally- would be available to them through the XBLA fee payments...
This is not costing MS $50 million. At most it is costing them a few million that they would have accrued in interest on that amount over 6-12 months.
What Micro$oft paid for was games, or game updates, or game episodes. The content, if any, of the games remains in the public domain, as does almost all content. The expression (the specific game) is what is owned, and what Micro$oft purchased the rights to.
Write them.
Help poke pirates in the eyepatch, arr.
(looking up 'facetious' on dictionary.com)
I WAS being facetious. lolpwnd.
You are reading a sig. Cancel or allow?
In two words "matching principle"
What you have described is an accrual, and T2 still would not be able to recognize the revenue right away.
In other news, 640k ought to be enough for anyone
All systems from the "next-gen" must outsell all models from the previous generation before we enter a new one. That is my criteria. The PS2 continues to dominate sales.
:-)
Or if you like, a new "next-gen" system must be introduced before you can label the current next-gen systems current gen.
Yes the rules are arbitrary and capricious, but so far I've seen no other suggestions so I am taking liberties with definitions that suit my own way of thinking.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
You read my intent pretty clearly, though I would argue that all three systems must outsell the PS2 first... but really that could be haggled over, in any case you are correct that even by the more liberal defintion that allows for just one system to outsell for three months, that condition has not yet been met.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Here you go: Xbox 360 is limiting GTA IV, says Rockstar
Is this karma, irony, or both? I bought a PS2 for GTA 3, and now I'll buy a 360 for GTA 4 (among other things).
Buy a 360 just for that? Why not upgrade your PC and download GTA IV whenever it comes out?
You just got troll'd!
Yeah, seriously. Fuck detail. Let's just have three textures for shop fronts and try to recreate a city. We could easily get it to fit on a CD.
A grass texture map doesn't have to be more than 16x16, then we'll recreate central park with it., fuck it, let's skip the texture altogether, and just use a flat colour. I suggest 0x11dd22.
Also, who in the world would EVER want a better/larger selection of music to go with their games? pshaw.
sigh.
I think that unlikely, because that wouldn't be enough to get T2 to make the content 360-only. Also, I think it unlikely that either party would think that the content will produce enough sales to come up to 50 mil, or even 25 mil of royalty payments to T2.
"Trolls they were, but filled with the evil will of their master: a fell race..." -- J.R.R. Tolkien on Olog-hai
Sony doesn't really have a proper online marketplace to sell downloadable content the way Microsoft does, so the "exclusivity" is pretty much academic.
Yes they do. It's been in place since launch and has actually had no limits on the size of the downloadable content. Microsoft has since upped their limits, but still, Sony has a system in place that is more than suitable.
Serious question:
Sony and MS sell their consoles at a loss. They plan to make up the loss from game sales.
But... MS pays game developers to create the games.
Where in this model does MS have the opportunity to make money?
Not that it really matters, but evidently 4-layer(100GB) Blu-Ray discs are very manufacturable(there just isn't any reason), and all Blu-Ray drives "should" support discs of at least 8 layers(200GB). I doubt GTA IV will be multi-DVD9, but it is possible.
People keep saying that this is no different than what Sony did, but it's not. Sony's shareholders would revolt if they threw $50 million just to have exclusive downloadable content for one game. It's business tactics like these which contribute to Microsoft's Home Entertainment division to lose billions a year. You guys keep saying "tough, shit, that's how business works," but that's not how business works. This is the whole reason Microsoft is hated in their other markets. Pursuing nonprofitable business ventures just so your logo will be on ever concievable piece of software isn't business as usual - it's a sick obsession by a handful of executives (Ballmer, Gates) to control software and be remembered as the architects of the computer age.
Keep in mind that Nintendo is more vulnerable to being hurt by these kinds of business tactics than Sony. Nintendo has to stay in the black with gaming; they don't have other markets to fall back on. I've always thought that Slashdot would be the first place to see the dangers of the 360 taking the majority of the market, but obviously ethics aren't as important as Halo. (BTW, in case any of you are particularly short sighted, the XBox is part of Microsoft's plan to monopolize television content, which they've been burning billions attempting to do since the late 90's)
Don't worry - anything they release "exclusively" on xbox will most likely be immediately available via P2P, ported by various scenes to insert into the PC version for you to enjoy. Just like the vista "exclusive" Halo2 was almost immediately fully functional on XP via some creative registry/dynamic library patches.
The system I am refering to, the Gamecube, was joking called "Texturezilla" by developers because of it's high texturing bandwidth. Granted, this was in 2001, but still. Have you even seen Resident Evil 4 (though that was a two disk cube game, oh no!)? The game looks great. And the Wii and 360 are both leaps and bounds more powerful than the Cube, with much larger disks. I think you're being too picky.
--The universe will not be altered by forum threads, even those which are very wry. --Tycho Brahe (Penny Arcade)
Yeah, but us hardcore fans can't wait for a PC version that's gonna come a year later, you insensitive clod! ):