ERTS Q1 FY2009 Earnings Estimate

Electronic Arts (ERTS) is scheduled to announce Q1 FY2009 earnings on 7/29/2008.  16 Analysts estimate revenue to be around $625.10 Million with a net loss of $-0.32 a share.  Previous year actuals were $395 Million in revenue with a loss of $-0.22 a share. Based on estimates, revenue is expected to grow by an astounding ~58%, but the net loss is widening by an additional 45%.

I believe the average estimate on both earnings and revenue is a bit too low.  The video game industry is the fastest growing segment within the entertainment business.  Last year, video games revenues were significantly higher than the box office and home video sales.  The streak continue, as the month of June recorded another stellar increase of 53% in total revenue.  Even economic woes, gas prices, and inflation have not stopped the spending spree for video games.  This trend is not expected to end and will continue in a sharp upwards trajectory as more great games and more consoles are sold in the next few years.

EA should definitely outperformed this quarter.  With an increased focus on next-gen consoles, the average price point of games sold to consumers should have significantly increased.  In Q1 2008, the previous generation consoles (PS2) and the PC made up a signification portion of the company’s revenue.  New games for the PS2 & PC sell at $39-$49 while older titles go for $19-29.  As more consumers migrate towards the newer consoles, the price point for new games increases to $49-59 and older games to $29-$39.  With sales of newer games increasing, EA is effectively recording an additional 20% increase in sales for every game sold.

Games wise for the consoles, EA had 2 major releases with Battlefield: Bad Company and UEFA Euro 2008.  Both games are expected to be a million unit seller by Q2.  EA also distributed Rock Band to the European region and a new Wii version for the Americas.  With the extremely high price point Rock Band commands, EA should be seeing once again significant growth in the top-line for their distribution division.  For PC Games, EA released several new expansion for the Sims and the highly awaited Mass Effect RPG game.  PC sales should see a spike in revenue from these new games, but because Mass Effect has already been released for X360, the spike should be relatively small.   Finally, EA released several well received games in Q3 and Q4 FY2008.  These games: Burnout Paradise, Army of Two, etc. continue to sell very well and will contribute greatly to both the top and bottom line.

EA’s other revenue streams continue to grow at an extraordinary pace.  Cell Phone games have contributed more to the top-line than Nintendo DS games in Q4 2008.  In-game advertising have begun to become more prevalent, and EA’s subscription service for Pogo.com is still signing on more and more customers.

Overall, all of EA’s business lines have performed very well in the past and this quarter should be no exception.  In terms of profits, cost control is one key area.  In the prior year, a large portion of the revenue came from licensed games or distribution contracts, services that command at most single digit margins.  This year began with a renewed focus on internally owned properties.  These internally owned properties have so far proven to be quite successful.  In addition, as the restructuring continues and one time costs are factored out, EA should be seeing a very profitable fiscal year.

For Q1, my revenue estimates are $809.96 Million and a $0.01 EPS.

PC Gaming Piracy = $13.66 Billion dollars?

I recently read an interview IGN had with Cevat Yerli, CEO of Crytek, the creators of Crysis (Link).  Interestingly enough, within a few minutes into the interview, the topic of piracy appeared.  The stats given by Cevat Yerli was for every 1 PC Game sold, 15-20 copies of the same game is pirated.  This is an ugly statistic.  To put it in a bit more perspective, if there was absolutely no piracy, how much money would the PC Gaming market have been worth in 2007?

According to NPD, the Retail PC Gaming market in 2007 for the US was worth approximately $910.7 Million, a little under a billion (Link).  If we assume Cevat Yerli is correct about the 1:15 ratio of sales:priated games, then approximately $13.66 BILLION ($910.7 Million * 15) worth of PC games were pirated in the US alone.  That is a pretty remarkable figure.  Of course, this is the way the RIAA and MPAA performs their music and movie pirating analysis and eveyone knows HOW ACCURATE or even remotely accurate their numbers are.

In actuality, this number is very inflated and I would be surprised if the $13.66 BILLION can actually be translated to even $1 Billion worth of sales.  Here are a number of reasons why:

1.  The price of a pirated game is about $0-$5.  The price of a new PC Game on retail shelves is $50, and an older catalog PC Game usually runs on average $20.  The $13.66 Billion figure relating to piracy loss was calculated with the assumption all users who pirated the game would have purchased the same game if a pirated copy was not available.  I would disagree, the basic law of supply and demand does not support this assumption.  As price goes up for a good, demand falls.  Therefore, if there was no “pirated” AKA free copy available, then most “Pirates” would not have purchased the game in the first place.

2.  Another key assumption is PC games that have been pirated are new games or games freely available on the retail market.  I would disagree, most older PC Games are just not sold anymore within standard retail channels.  If the game was not incredibly popular (i.e Starcraft), only online locations such as ebay or craigslist would have a copy, and even then its not a guarantee.  Yes, purchasing from ebay and craigslists are options, but even those are filled with obstacles.  Can the good be trusted?  Would I received the product in working order?  Has the CD-Key been shared with the world, thereby preventing me from enjoying the game?  These are common questions most customers will ask.  In almost all cases, the pirated version of an old game is the easiest one to obtain and to test without having to put significant time, effort, and risk to searching for an older game.  One of the reasons PC Games are “Pirated” is due to the lack of avaliablity within the retail channels.  These games should not be counted as a pirated game, as the no sale would have occured in the first place since there was no product to purchase.

3.  When a Game is installed, some general/specific information about the computer where it is installed on, is communicated back to the “Mothership” aka home server.  Everytime the Game is run, it phones home for verification.  If verification fails, the game fails to load.  In the event a game is resold, traded or given away as a gift (after being played) and installed on a new machine, the information communicated back to the Mothership changes.  In some cases, the game can still be played.  In other cases, protection kicks in and disables the copy.  Even though the method of obtaining the game was completely legitimate, the game was prevented from being run because the specifications of the newer machine did not match the specifications on file with the home server.  These instances can be any scenario where a change in hardware occured, such as the game installed on a new machine or the machine received an upgrade (i.e. new graphics card) and as such resulted in new information being sent to the home server.

I am fairly certain the majority of such issues are resolved quickly and most customers are able to freely play their game after contacting customer service.  But is this how most publisher gather statistics on pirated games?  Based on installation attempts for different machines?  The validity of the 1:15 ratio is what I am calling into question.  Publishers and other companies within the industry have an incentive to inflat the real numbers surrounding the problem to help further cause in bring it down.  Most numbers reported should be taken with a grain of salt.

4.  The pirated PC Game is a superior product in terms of value.  This is a fact.  A pirated game is free and can be installed on any machine without restrictions.  It can be backed up multiple times and stored for future use.  In addition, it respects the computer as a personal device and as such does not send out “information” to the Mothership.  A fully legimated copy purchased in stores can only be installed on 2-5 computers, cannot be backed up and stored for future uses, and does not respect the privacy of the personal machine.  For all of those additional restrictions, a customer is being asked to pay $50.  Anyone who is given a choice AND has the funds to purchase a game will still pick the pirated copy over the legitmate one.  If the customer does not have the funds … refer to reason #1.

Those are just but a few of the reasons why PC Game piracy is NOT a $13.66 Billion.  There are of course lots of additional factors, i.e. without piracy, would the game have even sold copies to begin with, since piracy is a form of marketing, etc.  I would estimate the total loss of sales to the industry to be about $500 Million – $1 Billion.  Even if my estimate is underestimates the impact, I believe it is a much more reasonable estimate thnn the $13.66 Billion dollars that was implied.

On a side note, I agree PC Piracy is a problem, since for aspiring developers it literally breaks their ability to continue as independent game makers.  But fighting against something that is driven by market forces is never a good strategy.  Rather to win, a new value proposition has to be introduced, something pirate games cannot copy, but this will be a post for another day.

Nasdaq 6-26-2008: Double Top

Double Top Chart Formation:

The Nasdaq rallied for about 3 months between the beginning of March to mid May. At the end of the rally, the chart peaked on May 19^th at 2551.47 and quickly drifted south thereafter, hitting a bottom on May 23^rd at 2430.36. The chart reversed and began to head back up peaking on June 5^th at 2549.94. After the formation of the 2^nd peak, an accelerated decline occurred, pushing the chart under the support line set by the May 23^rd bottom within a period of 5 days on June 11^th. A test of the newly formed resistance line occurred on June 13^th, but with minimal success. The Double Top chart formation was confirmed as the new found resistance test failed and it broke through the old support line with stronger than normal volume.

A – 2 peaks within a span of 3 weeks formed on May 19^th 2008 and June 6^th 2008. The first peak occurred at 2551.47 and the 2^nd peak topped at 2430.36.

B – A prior upward trading channel had formed from mid March to mid May ending on May 19^th, 2008, the first peak within the Double Top Chart formation.

C – After the formation of the 2^nd peak on June 6^th 2008, an accelerated decline causes the chart to quickly smash through the old support set by the trough on May 23^rd at 2430.36.

D & E – The lack of volume in the 1^st break resulted in an end to the downward trend. A test of the new support turned resistance line occurred with a small brief rally. On June 20^th, the Nasdaq broke through the old support line with a surge in volume, confirming the formation of the Double Top chart pattern.

I – The different between the highest peak at 2551.47 and the trough at 2430.36 is 121.11. As such, a price target of 2309.25 is set to be hit within the next few months.

In addition to the chart pattern, other technical indicators that spoke of a coming down trend are the following:

F – On June 6^th, the RSI index dropped below the 50 mark, indicating the relative strength of the chart has changed and an increase likelihood of decline.

G & H – The slow MACD line crossed the fast MACD line on May 20^th. The MACD continued to fall and finally broke the X-Axis on June 12^th.

Fundamentals (Long Term Outlook):

The largest sector within the Nasdaq is Technology at 25% followed by Financial at 24%, Consumer and Health Care at 16% a piece, and all others making up the difference. The market as a whole continues to suffer from the financial meltdown, and as such the pressure from Consumer and Financial stocks will continue to weigh heavily on the Nasdaq. Large banks still have not instilled a level of confidence within the investing population. More write downs are expected across the board from almost all financial institutions.

Oil prices continue to rally, hitting a new high yesterday at $140 a barrel. This continued charge will have a heavy impact on the consumer stocks within the Nasdaq, further pulling it lower. Oil might be seeing a reversal in trend as more and more people jump on the “bandwagon”. At some point in time, the inability to supply oil at a reasonable price will severely slow emerging and developed economies throughout the world. This will cause an excess supply of oil and a sharp drop in demand. If oil/energy/consumption conservation habits start to further ingrain themselves within the emerging economies and begin to become more prevalent in the developed world, oil should drop back to the double digits.

Technology stocks had a strong rally overall within the past few months, but with most companies largest customers being Financial Institutions, there might be weakness within this sector in the upcoming months. Even though international sales can be depended upon to stabilize earnings, I am seeing that information already discounted within the stock price itself. The unknown is how badly is financial sector going to affect the growth rate of these companies.

Video Games: The RAVENOUS Market

Before I expand on the focus of this post, I would like to comment on something a close friend of mine mentioned after reading the post about how Video Games provides a channel of escape. During the great depression, baseball was one of the favorite past times most people enjoyed. The method of “escape” chosen is very specific per person, but it generally involves some form of entertainment. In the end, what my friend was suggesting, is a better way to structure my argument. The previous argument should have showed how entertainment (movies, sports, games, etc) is the method by which the mass attempts to escape everyday problems. Video games being one such form of entertainment.

For the main meat of this article, the focus will be centralized on Video Games as a “RAVENOUS MARKET”.

Gamers = A person familiar with video games

Users = People who are unfamiliar with video games or do not play them on some consistent basis as measured by the market. (i.e. this means playing solitare, minesweeper, freecell, etc does not count).

The main reason for why the industry is in such a strong growth pattern is simply because the video game industry is currently in an “RAVENOUS MARKET”. A market where there is so much pent up demand, once released consumes almost all that is avaliable. This pent up demand for easily playable, enjoyable, and short video games has been building and building every since the introduction of computers. Users were introduced to digital entertainment from Solitare, Freecell and Tetris (the amazing tetris). Online flash games such as Zuma and Bejeweled pulled in even more users. But users wanted more, but not games like Final Fantasy, or CounterStrike, or WarCraft III. Users wanted something easy to learn, to enjoy, and to share with others. But how does someone make a game easy enough for simple users to enjoy and share.

The answer lies in the interface, the gamepad, the controller. Simple PC games (i.e. Solitare, FreeCell, Zuma, etc) easily succeeded because the “controller” was just a mouse. Users just point and clicked to play the game, it could not have been any easier. Once a game moves past the mouse and incorporate additional input keys, it became too difficult for most users to understand or enjoy. Even racing games that utilized only a spacebar and arrow keys saw limited success. But this concept was not easily understood and not fully played upon till the Nintendo DS.

Nintendo DS came out as a smash hit. It was very easy to learn because it operated almost like a mouse. You move and “click” (touch) to get a response. Users quickly picked up the gameplay because it made sense to them. They didnt have to hit A to open the door or B to cancel or hit Left + A to do something special. You touched certain places of the screen such as “exit” to cancel, the door to enter a room, or the head of the dog to pet it. This made sense for the users and it was what they wanted. Something easy to learn, something easy to enjoy, something easy to play.

This trend has continued with the Wii. A controller that looks like a remote and uses motion sensing. Users swing the remote like a baseball bat to hit a ball or like a tennis racket to hit tennis ball. Again, same formula, an easy interface with enjoyable gameplay.

How did Wall Street react? They called the Nintendo DS a disaster when introduced. They believed it would fail against the PSP. The Wii was a gimmick and the next generation console wars will be fought between XBox 360 and the PS3.

How did the market react? SImply put, this level of pent up demand, built up over a few DECADES, cannot be satisifed in a matter of months. The DS has sold out continuously for the past 5 holiday seasons since its release. The Nintendo Wii cannot be produced fast enough and has an average shelf life of 1 hour.

This is because the market/consumers/users have waited patiently (or impatiently) for something to satisifed their needs. Once a product, proven to meet the basic needs of these users, was introduced, the market responded. It absorbed everything. The interface was almost perfect for users who could only watch afar a few years back. Will this level of demand continue … probably not, as more and more companies tries to jump on board. But for now the market is still absorbing every DS produced and ever Wii built.

On a side note, it is worth mentioning that Wall Street is not completely wrong. The XBox 360 and the Sony PS3 is competing against each other … for 2nd place.

The Death of PC Gaming?!?!

So this is not a direct continuation of my ideas over the general video game industry, but I still feel its is extremely important, and as such decided to write it now then later:

All over the internet … and blogs … and this … and that … the same message seems to be resonating. PC Gaming is dying, consoles are the new wave of the future. Sadly, I was one of those very same people whom were openly bashing the lack of success for PC Games in the past few years. But some time back, I decided to take a deeper look and try to really figure out why PC Gaming was dying. (OK the reason for this is because, I got tired of always defending PC Gaming … even today)

So my research began with the usual … NPD charts, graphs, and data. The conclusion, well simply put, “PC Gaming” has seen a plateau in sales for the past few years, ~$1 Billion worth of sales and unchanging. So only $1 Billion in sales for each of the previous years, and console sales are growing at double digits? It seems obvious to anyone who looked at this same data set, “PC Gaming” is dying.

I decided to look deeper into the numbers to figure out what part of the PC Gaming market is dying and what part is expanding. Thats when the light struck. NPD only reports on retail PC sales, because those are the only sales that are “trackable”. The following items are excluded from NPD sales reports:
1. Digital Downloads (Steam)
2. Micro Transactions (The Sims)
3. Advertising (Yahoo Games and other Flash Games)
4. MMO & Subscription based gaming (World of Warcraft)

PC Gaming is far from dying, it is thriving and growing, just in ways the market was unable to measure.

• Digital Downloads are set to surpass retail sales numbers for games sold (link).
• MMO & other subscription based gaming have become extremely profitable and still growing in leaps and bounds. World of Warcraft is leading this charge. Q1 2008 revenue alone was above $250 Million (link). (Note: Blizzard’s main revenue source 80-90% is World of Warcraft).
• Advertising is becoming the business model for many small flash game websites. According to this older website (link), there were over 217 Million unique users. That number should have grown by now.
• Micro Transactions are booming. The Sims and other games require small incremental purchases of items or other things to continue.

This is what the PC Gaming industry has evolved into. It has expanded into several new markets of advertising, downloads, micro transactions and subscriptions. But industry market research and metrics do not fully account for these new revenue streams. But these new streams of revenue cannot be ignored, Digital Downloads, Subscription based gaming, and advertising have proven to be multi-billion industries. Once the older retail sales are finally eclipsed, then the true nature of the industry will come to the forefront.

A Further Look …

In the previous post … I discussed about value proposition in terms of $$$ a video game provides to a consumer. Now we look at other factors that also contribute to this resilience against macro-economic problems.

Video games have become a main form of entertainment. Besides the incredible $$$ value proposition, it provides something else. Something quite important in times where everything that could go wrong has gone wrong and more. An escape … most games allows users to escape from their current world. World of Warcraft, Grand Theft Auto IV, etc. are examples of such games that allow a user to become engross and forget about their current problems.

During the great depression, one of the few industries that thrived was the movie industry. People wanted to get away from the bleak world, from the problems, from this and from that. It was entertainment that helped them move on. From all of the Disney movies, (based on true stories ones) you see dying towns where people rush to football games to escape their bleak situation.

Video games having migrated from the outskirts are now one of the main players in the entertainment industry. The entertainment industry has always shown resilience during hard times, now is not an exception.

As Lehman Brothers has kindly shown us recently … the problems continue to persist within the economy … then what industry is one that should weather the storm nicely? You got that right Video Games.

*Of course the problem here is one would have to find a good company to invest. A rising tide lifts all ships … but some are just so full of holes they are drowning themselves. After a few more posts on macro econ and its effects on the industry I will jump into a detailed analysis of the Big players … Sony, Microsoft, Nintendo, Take 2, THQ, Activision, Electronic Arts, and Ubisoft … and some of the smaller players that I would deem relevant.

The Industry

Apologies to all readers for the lack of updates … I have been much too tired the past few days to perform a meaningful analysis and post online. But I felt documenting something about the overall video game industry is important.

Currently the US is in the midst of a credit crisis, an oil shock, a recession, a failure within the financial industry, etc. however the media would like to spin it. But to sum it up, basically, America is right now in deep $h!+.

Ok … so what does this have to do with Video Games? Everything.

Video games are more or less recession-proof, oil-proof, XXX-proof (and no XXX does not mean porn … its a placeholder to replace with any other problems America has). But what this all comes down to is money. Less money in the pocket of the consumers. Why is video games this-proof and that-proof.

Video games offer one of the highest value proposition when it comes to someone getting the bang for the buck. One good game on a console or a PC generally lasts a good 30-60 hours, maybe even more. A good example is WoW. Over the course of 1 week a person would play on average 2 hours a day, or 14 hours for the week. For the month, it would result in 56 hours. For $15 bucks a month, the consumer gets 56 hours worth of entertainment … w/o traveling expense … that is one heck of a deal compared to other forms of digital entertainment.

Gaming sales have not slowed in the wake of these problems the overall economy is facing. Rather it is still growing in mid-high double digit figures, an impressive rate considering the size of the industry. Sales should continue, and the cash strapped consumer will find every more creative ways to spend the money extract the largest possible value from each dollar spent. For more and more people it will be video games.

*Small Note (for myself in the future and everyone else): This post focuses purely on the overall crisis of money leaving the pockets of customers and it’s impact on the video game industry.

“The NEW Take 2″

The numbers are out and TTWO, has smashed analyst expectations.

Q2 Revenues came in at about $538.9 Million w/ EPS of $1.52, far exceeding the average analyst estimate of $499 Million and $1.13. My own estimates was a bit too high on the revenue side ($608 Million) and a bit too low on the EPS side of $1.36.

Taking a deeper look into the numbers and my analysis, I overestimated the impact of Take 2’s back catalog of games (excluding older GTA games). During the conference call, Take 2 management indicated the GTA Franchise made up 78% of the publishing revenue or a total of $378.3 Million. All non-GTA related products combined produced $160.6 Million. Even if $25 Million of the $378.3 Million came from older catalog sales of GTA products, it still leaves non-GTA IV revenues at $185.6 Million, far behind the previous year’s $205 Million. My $608 Million revenue estimate was much too high due to the expectation of better sales from non-GTA IV games.

On another note, my EPS estimate was too low as I was anticipating a much higher production costs for GTA IV and higher operating costs. I had completely forgot the fact that TTWO had improved their overall operations earlier this year for a anticipated gain of $25 Million in cost cutting initiatives.

Overall, I am impressed with Take 2’s performance and hope this trend continues well into the next year. The stock did not move big as I had expected … Not sure what the reason is, but could be caused by several factors as I am the not the only one who was surprised by the lack of movement:

1. ERTS overhanging bid (<– the Current Scapegoat)
2. Whisper expectations were met and not exceed
3. The past history of management still hangs over the company
4. Guidance wasn’t as good as people expected
5. etc.

Lots of reasons with the ERTS being the current scapegoat. But in the end the performance cannot be denied. The management team’s execution cannot be denied. These factors might not be taken into consideration now, but it will be accounted for over a period of time. This is not a one time fluke, this is, as Zelnick put it yesterday, “The New Take 2″.

Numbers!!! (End of Pre-Earnings Analysis of Take 2 Q2)

Today is the day Take 2 will announce their Q2 earnings. Following is the final post on the series of pre-earnings analysis of Take 2.

The average analyst is expecting $499 Million in revenue and $1.13 EPS. My own estimates are set at $608 Million in revenue and $1.36 in EPS, significantly higher. Analysts, in general, appear to have a very negative view of the company. 11 analysts have hold recommendations, 1 under weight, and 1 buy. The average price target is $27. Yet with $500 Million in sales from GTA IV in the 1^st week, and a very favorable exchange rate you would expect them to be singing a different tune. But nope, most analysts are saying GTA IV sales have been considered in their estimates. I do not think they give proper credit to Take 2’s new management team and internal IP Portfolio, but we shall see this afternoon.

On the sentiment front, a quick look at the front month June Options shows heavy open interest at the $27.50 Call and $25.00 Put. There are a total of 85,000 calls compared to 62,000 puts, producing a put/call open interest ratio of .73. From this, it can be seen the general sentiment towards TTWO are neither bullish nor bearish. Even though calls outnumbered the puts, this is natural, since in general more people play the upside of a stock rather than the downside.

If Take 2 does happen to beat analyst estimates, and not just beat by a penny, but a solid beat of $0.05 – $0.10, we should be looking at some strong upward price action. Breaking even or even a small beat will fuel the argument GTA IV was already valued into EA’s $26 a share bid for Take 2. With a solid beat, we are looking at a possible re-valuation of the company by the market and can potentially expect a jump to $30.

Current guidance set forth by Take 2 management for FY08 is $1.35 – $1.50 EPS. Average analyst estimates are currently set at $1.53 for FY08. I am expecting Take 2 to increase guidance for FY08 to $1.50 – $1.60 range, and am expecting Take 2 to push 1 or more key titles scheduled to be released this fiscal year into the next fiscal year.

Overall, from the factors and variables discussed in my previous posts, plus the low estimates provided by analyst and sentiment, Take 2 is set to move big. My call is move big upwards.

Disclosure: Cause apparently this is necessary on every blog about investments and earnings that I have read. I do have a position in Take 2 and it is not a small holding but rather a core holding. Sooo … I am not blowing smoke out of the chimney, there is a fire burning at the bottom.

The Competition

Apologies for the lack of detail. I woke up a bit later than usual, and had some stuff left over from yetserday to finish for work. Anyway …

1. Sony’s MLB: The Show 08 was the dominating game for PS2 and PS3, stealing sales away from MLB 2K8.
2. Devil May Cry 4, Army of 2, and other top notch new releases reduced the overall catalog sales Take 2 is generally accustomed to. The better new releases are, the more money people spend on the newer games.

Take 2’s significant releases for Q2 were GTA IV, Bully:Scholarship Edition and MLB 2K8. Aside from GTA IV, most people don’t consider Bully or MLB 2K8 as much of anything and there is a good reason. MLB 2K8 lost a large chunk of its core players to Sony’s MLB: The Show 08. Bully: SE is an older port from the PS2, not a new game at all. There is no reason for older players to purchase the same game on a brand new platform. Add in the heavy competition from some of the awesome games released during Q2 from competitors and the impact those releases had on Take 2’s older catalog of games, and people will wonder whether or not Take 2 will be making money again this quarter.

Though, luckily for Take 2, the market has never been kind to the company, actually, in all honesty the market hates Take 2. It doesn’t have high expectations to beat, just meeting the estimates might be enough for a good pop after earnings.

Historically speaking, Take 2 earned $205 Million last year in revenue. This year, it should be safe to TTWO is expected to earn around $225-250 Million without GTA IV. With GTA IV, Take 2 is looking at double that amount around $450 – $500.

Frankly though, GTA IV is gonna to make them the most money this year. It is the game that will fill their coffers and make their current valuation seem ridiculously low. It is the game that will move them out of the crap light and into the spot light. It is … blah blah blah … Sadly, from this point of view, Take 2 still depends on the Grand Theft Auto Franchise, and without it they would become a THQ.