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Lost and Damned a Digital Darling, says Analyst

Kris Graft's picture

By Kris Graft

March 16, 2009

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Retailers are missing out on the large bulk of sales from Take-Two and Rockstar Games' The Lost and Damned expansion for Grand Theft Auto IV, says one analyst.

Jesse Divnich with Electronic Entertainment Design and Research (EEDAR) said in a Monday research note that he expects brick and mortar retail sales of the February expansion to be less than $3 million. Retailers sell Lost and Damned as a card with a product key code that users enter to download the game from Xbox Live.

Divnich estimates that worldwide, digital distribution sales of the add-on (i.e. sales from users who bought the game directly through Xbox Live Marketplace) currently stand at $18 million--six times greater than the retail sales.

"As we move forward, we expect that 6 to 1 ratio to grow even larger as digitally distributed games don’t have to succumb to retail pressures and loss of shelf space/visibility," wrote Divnich.

EEDAR expects the $20 add-on to generate up to $40 million worldwide in the long term, with the original GTA IV, released in late April last year, to generate $800 million in worldwide revenue throughout its lifetime.

manhattan's picture
On March 16th manhattan said:

EEDAR expects it to generate $40 million worldwide; that's still $10 milion short of the amount MS paid to acquire exclusivity. But then, MS is one of the few remaining companies these days who can still afford to throw away money.

NickgamertagO1's picture
On March 16th NickgamertagO1 said:

manhattan,

You forget that MS paid $50 million for two episodes, not one. The second one according to Take-Two is supposed to be out by Holiday '09. So, theoretically, it could make $80 million which would be a $30 million profit. Not bad.

grognard66's picture
On March 16th grognard66 said:

By doing this MS also ensured GTA would launch on 360 at the same time, which was a major coup at that point in time. This offered an incentive for those sitting on the fence at that point in time to go ahead and pick up a 360 since they knew this franchise would release on the same date and they could enjoy other next-gen exclusives meanwhile on 360 - not to mention the fact that 360 would eventually offer more GTA exclusive content.

I don't think MS really cares how much they make back from the GTA DLC - neutralizing the benefit of the biggest console gaming franchise was easily worth that much money.

manhattan's picture
On March 16th manhattan said:

Yeah, come to think of it, that's Microsoft's biggest innovation to the industry: if you can't beat 'em, buy them out into oblivion.

NickgamertagO1's picture
On March 16th NickgamertagO1 said:

Speaking of Oblivion, I read somewhere that the next Elder Scrolls might be available by the end of 2010 (MMO please).

NickgamertagO1's picture
On March 16th NickgamertagO1 said:

Now please just start releasing full retail games digitally and I'll be happy. They're getting closer and closer. XBLA games are starting to get huge, Portal and Watchmen are big with Watchmen hitting like a gig and a half. What about PSN games, what kind of memory are those taking up does anyone know?

jacobpbarker's picture
On March 16th jacobpbarker said:

Well Sony released Warhawk on PSN, and then there's Burnout Paradise. I think Warhawk was only a gig or something.

I think the release of Burnout Paradise on PSN helped it's sales significantly.

Are they even considering releasing this DLC on PSN?

ArronC07's picture
On March 16th ArronC07 said:

Don't forget Siren.

NickgamertagO1's picture
On March 16th NickgamertagO1 said:

I forgot about those two games. So at least two full retail games have "shipped" digitally on the PS3. Would like to see much more of that.

"Are they even considering releasing this DLC on PSN?"

No, it's a 360 exclusive (reportedly based on a 50 million dollar exclusivity deal).

Peter_Pesic's picture
On March 16th Peter_Pesic said:

I believe the most recent SOCOM game was/is also available to be purchased via PSN. Sony has definitely been experimenting with full game digital releases a lot more than MS.

NickgamertagO1's picture
On March 16th NickgamertagO1 said:

You're right. It seems MS with their arguably better online platform wouldn't be trailing Sony in this area. They have a good amount of quality live arcade games, but as far as full game downloads they really have none. At least they allow full game installs on every game as an option. It would seem digitally releasing full games would be the next logical step. I'm pretty confident that will be a requirement for the next box (that all games be available digitally in addition to retail). It'd be nice if the digital games had like a 5-10 dollar discount (as they should). Or maybe in the next cycle there will be no distinction made between "live arcade games" and "full games". Game prices could then be more flexible (5, 50, and anywhere in between) based purely on content/length/dev costs. That would help publishers with copies sold since there would less used copies floating around, then they would be able to afford to charge less.

Sorry, didn't mean to get carried away, work is especially slow today.

DarkPGR's picture
On March 18th DarkPGR said:

Microsoft does sell full retail games on their service, just not Xbox 360 ones...they have the "Xbox Originals" section, wich are full retail Xbox games...

Mystakill's picture
On March 19th Mystakill said:

I'd rather see Microsoft allow copying original Xbox games to the HDD than charging $15 for something I either A) already own, or B) can pick up at retail or online for less than $10. I'm not paying a premium to play my old games on my 360.

Speaking of which, I just picked up a new 360 Arcade this week to replaced my 5th RRoDed 360; I tried x-clamp "fix", which worked for a whole week before completely failing. I figured it was easier & faster to just buy a new Jasper console than to dive back into the service center's dead pool of refurbs again. I was genuinely surprised that my last refurb lasted almost a year and a half, as all of the others had lasted for less than a year. Interestingly, Microsoft doesn't include a warranty registration form with their newer consoles.

Now I'm waiting for a return call from Microsoft so that I can transfer my DRM licenses over to the new box. When MS shipped my last refurb, they forgot to transfer the licenses, so I had to do that myself last June when the tool became available. Since they only allow one user-initiated transfer per year, I'm SOL until I either get MS to fix it, or I wait until late June to do it myself. Tthe latter is not really an option when I've got $300+ in Marketplace content unavailable for usage by anyone else in my family. My kids don't care what DRM is until it affects them.