Tech Mediums

A little bit ago, I wrote a blog on why video games are recession proof.  The theory is that people want a nice form of entertainment that, in a recession, is extremely low cost.  Think about it.  For about $50 for a brand new game, you get unlimited play for the LIFE of the game.  The means the cost/play or cost/hour of play is as close to zero as you can get.  Compare that to the movies.  That cost is $9/play or maybe $4.50/hour.  It’s off the chain for most popular concerts.

So why would movies do well in a recession?  I have a couple of thoughts…

1.      People like going out.  In a recession, this truth still holds.  And in an environment when there are so many reasons to stay home, it’s still true.  For example, the ungodly number of social networks, video chat, AIM and other ways (like the phone) to maintain contact with friends, in addition to movies on demand and the old tried and true, TV, are some of these reasons to stay home.  These should not be underestimated.

2.      Compared to other forms of entertainment, going to the movies is relatively cheap (assuming that you eat before/after the movies and avoid the concessions, which can eat a whole in your pocket).  It always gives you something to talk about afterwards too.

3.      The reason to go out to a movie is because something is good.  There were so many movies I wanted to see this summer it’s ridiculous (The Hulk and Batman being two of them).   This is very crucial.  If there were horrid movies at the box office, theatres would not be doing well at all.

What’s interesting is that some theatre chains (the industry is coming off of a period of consolidation) are doing okay.  Theoretically, consolidations should be good since you can squeeze synergies out of most of them.  With the theatre consolidations, initially, I was wondering whether it would good, since the industry wasn’t doing that well.  I kept myself in check, because you can never scold good companies in a bad industry (don’t throw the baby out with the bathwater – type of thing).

Here’s a wonderful blog from Wired.com that gives some stats on the matter.

EA is yet another company who continued to get spurned by a smaller, high-profile company.  The other, of course, being Microsoft.

It’s like the rich dude who keeps begging the cute chick to go out with him, thinking that with all his wealth and star-power, she should just say yes.  In this case, EA is the rich dude, and Take-Two Interactive (TTWO) is the cute chick. 

Well, she’s ridiculously hot because she’s got one of the best bodies - the enormously popular Grand Theft Auto franchise. 

But after extending its offer for Take-Two, again (4^th time), EA’s offer was rejected, again.  Still too low for Take-Two. 

Initially, Take-Two wanted to wait until GTA had been officially released to see if it could drive increased sales and value. 

So far, not-so-good.  Sales are high, but since the debut of GTA on April 29, Take-Two’s stock has actually gone slightly down -.5%.  In the last three months, Take-Two’s stock is only up 4%, having fallen off quite a bit in the last few weeks.

So maybe EA is saying, “Look babe, I know you’re hot.  You know you have a killer body.  But you can’t pull any other dudes with my looks, intelligence and wealth.  So I’ll wait, but let’s stop fooling around and make it happen.”

Take-Two is giving EA the “It’s not you.  It’s me.”, routine.

It’s actually kinda funny. 

Release Dates
US: April 29, 2008
Europe: April 29, 2008
Japan: April 29, 2008
Australia: April 29, 2008

There’s so much buzz going around that it’s buzzonkers.  Announced a long time ago in a galaxy…(uh, yeah) - this one’s prolly gonna crush Halo 3’s records, which was $300 million and 5 million units in the FIRST week.

“I’m not a player, I just crush a lot” – rapper, Big Pun.  Fitting, given the expectations.

Expectations - $400 million in the first week. 

Unlike Halo 3, which was released on Xbox360 only, GTA is being released on multiple platforms, thereby expanding the potential overall sales.  Since EA is making a move to grab Take-Two, the maker of GTA under TTWO’s Rock-Star brand, there’s some need for TTWO to show such strong sales to entice EA to increase it’s offer or downright encourage stockholders to reject the tender offer (FTC also is a little skeptical).

Here’s an excerpt of the interview that IGN.com had with Rockstar’s VP of Creative, Dan Houser, and Rockstar North Art Director Aaron Garbut.  The interview is excellent, check out the rest here. 

 IGN: Do you think the heightened realism is going to make the anti-GTA politicians even more vocal?

Garbut: I think regardless of how the game looked or what it contained the politicians [would] be just as vocal. GTA is an easy target for politicians and journalists to pick on. It doesn’t really matter what we do or don’t do. It’s an open experience that allows players to do as they choose in a realistic environment. As these sorts of games become more and more sophisticated and the choices and abilities open to the players increases it will become easier and easier to sensationalize a particular aspect of it and at the same time become more and more ridiculous [about it].We’re seeing it already with the drinking in the game. There is no drunk driving minigame, there’s just drinking and getting drunk. Combine this with the ability to enter cars in the game and people are able to drive drunk, but that’s a choice they have made based on the abilities we have made available to them. It’s just as valid for them to walk home, but that doesn’t make for such interesting headlines.I seem to be ranting but my point is we don’t allow what…a politician might think to be an issue. We just make a game that is as good as we can make and as beautiful as we can make. I really loathe the idea of self censorship.

What’s fascinating is that I’ve had former 40+ year old co-workers talk about how they were playing GTA for hours after putting the kids to bed and picking fights with local gangs…and what it felt like being marked (one guy is from North Jersey, so that that into account J).  But it speaks to the wide following GTA has with hard core gamers and passive folk. 

IGN also did a good history expose too – pretty cool.