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XBox (Games) The Almighty Buck

Microsoft Shells Out $50 Million For GTA IV Content 189

Posted by Zonk from the that-is-a-lot-of-graft-and-crime-right-there dept.
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."
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Microsoft Shells Out $50 Million For GTA IV Content More

Microsoft Shells Out $50 Million For GTA IV Content

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  • 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 ...
    • 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!

    • Is it legal? (Score:3, Interesting)

      by phorm ( 591458 )
      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?

      • Re: (Score:2)

        by beavis88 ( 25983 )
        I'm sure they'd make the argument that they're paying to be included - the fact that other platforms are excluded is just an unavoidable consequence of their inclusion being exclusive.

        Man, I shoulda been a lawyer - what an awful sentence... :)
      • Probably. Sony are perfectly entitled to outbid them, and it's not like Microsoft can use any unrelated business to push them out of the deal.
      • Er. Maybe if you weren't a moron you might recognize that this is looks like a loss-leader but probably isn't. They recoup that with the sale of 2.5 million downloads at $10 each. Or they may charge even more for the content - like $15 - and break even after selling 1.6 million downloads.

        Why anyone would think anything unusual about a Console Maker paying to develop content for ITS OWN console is mindboggling.

        But thanks for trying to run the People's Court right here on Slashdot, Judge Whopner.

      • Re: (Score:3, Insightful)

        by calbanese ( 169547 )
        Its legal.

        Illegal tying requires tying two products from two seperate markets together. There is nothing preventing Microsoft from using its resources gained from Windows to buy its way into the Games/Console market under US law (EU law is much more strict, though I don't know the answer in that case). Of course, if Microsoft becomes a monopoly in the game console market, this practice could be seen as anticompetitive and a violation of the Sherman Act, but it still wouldn't be tying, as consoles and g

      • Re: (Score:2)

        by dave562 ( 969951 )
        How is it different in spirit than when one of the fighting games (I think it was Tekken maybe) made different end of game characters for different platforms? On the Nintendo system you got Link. On the Microsoft system you got Venom from Spiderman. There was one other bad guy for the Playstation.

        Or on another train of thought, Microsoft wants to provide content. Content doesn't come about for free. They have to pay for it. So they buy the content from Take Two and then resell it to Xbox 360 owners.

        • Re: (Score:2)

          by jZnat ( 793348 ) *
          It was Soul Calibur II, and they were all chooseable characters along with the normal cast of characters. Also, you didn't have to buy them on some sort of marketplace that was only available for one system.

      • Re: (Score:3, Informative)

        by dabraun ( 626287 )

        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?

        You simply could not compete at all in the console marketplace if you were not allowed to buy exclusivity. Every console maker does it, has done it for a long time, and will continue to do it.

        • Re: (Score:2)

          by phorm ( 591458 )
          I always figured that it had more to do with not wanting to do development for multiple consoles rather than being paid for, but I guess that this makes more sense since a code rework for a high-sales game should cost less than it would profit.
    • 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 actua

    • Re:This sort of behavior used to be a punchline... (Score:5, Insightful)

      by Samedi1971 ( 194079 ) on Monday June 18, 2007 @04:06PM (#19555957)
      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).

      • Re: (Score:2)

        by 4D6963 ( 933028 )

        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?

    • 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

      • Re: (Score:2)

        by DarkJC ( 810888 )
        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.
    • 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.
    • First thing that pops into my head upon seeing this news is a punchline [penny-arcade.com]
  • 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.
    • Not me. I don't buy content. I've already bought the game. If they come out with a deluxe version with all the content included for an extra $20, I'd probably buy it, but I won't shell out $100 two dollars at a time for extra content.
      Obviously, I'd never make it as a WoW player.

  • This isn't new (Score:5, Informative)

    by svendsen ( 1029716 ) on Monday June 18, 2007 @03:50PM (#19555687)
    Companies paying off game developers for exclusive only content/games/accessories has been going on for along time.

  • Who knew the market for dead hookers was so crazy? I foresee a new application for Balmer's chair throwing skillz...
  • 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?
    • 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
    • Apparently you haven't read the statement at all, let alone looked at the financials closely. Either that or your understanding of accounting is at a very basic level.

      but couldn't part or all of the $50 million in deferred revenue also account for end-user payments for the downloadable content?

      No. end-user payments are MS revenue, not T2 revenue. It doesn't matter to T2 where MS gets the cash from.

      and they estimate a chunk of downloads, they might just be recognizing that deferred revenue now?

      Perhaps

  • 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.

  • You can bet it will be paid content (Score:4, Insightful)

    by Murrdox ( 601048 ) on Monday June 18, 2007 @04:08PM (#19555985)
    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.

    • Re:You can bet it will be paid content (Score:5, Insightful)

      by DaveCBio ( 659840 ) on Monday June 18, 2007 @04:31PM (#19556373)
      If you think no money has changed hands between Sony, Nintendo and publishers to get exclusives for their respective systems then you must also believe in Santa Clause and the Tooth Fairy. You might be interested in a bridge I have as well.

    • Re: (Score:2)

      by radish ( 98371 )
      But that's exactly what publishers do already, they provide the funding for a game and in exchange get to decide which platforms will be most profitable, choose game features, styling, etc etc. All that is happening here is that Microsoft is adding an additional layer on top by paying to directly influence the publisher, who in turn influences the developer. And it's not new - the vast majority of major console exclusives are bought by the manufacturer in one way or another, it's just interesting in this ca

    • Re: (Score:3, Insightful)

      by Khuffie ( 818093 )
      You say that as if Sony is a teensy weensy company. Except for the fact that Sony is also one of the largest media congolmerates, and according to wikipedia it's annual profit is greater than Microsoft's.

    • Re: (Score:2)

      by dabraun ( 626287 )

      Personally, I find it a disturbing trend that Microsoft is throwing money at developers to make them develop custom content for the 360.


      Do you find it disturbing that your employer pays you to do work for them and expects you to not sell that work to others independently? Really that's basically what's going on here - Microsoft is either paying for these expansion packs or they are funding the creation of them - whatever. This happens all the time.

    • 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.

      Yeah, that's evil, but we've already had games that end on cliffhangers with no sequels in sight. We've also had the trend of big games having exclusive content for different systems...the one really springing to mind is Soul Caliber 2 where you had special characters depending on the system. If I really like a game, I don't want to have to buy three systems to experience all of it!

    • Also, in case no one else has mentioned this it wasn't a payment, it was a royalty advance which is completely common in the gaming business.

  • oblig (Score:1, Funny)

    by doyoulikeworms ( 1094003 )
    In Soviet Russia, Microsoft pays YOU!

  • That exactly what Sony did. (Score:4, Insightful)

    by Higaran ( 835598 ) on Monday June 18, 2007 @04:52PM (#19556653)
    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.

    • Re: (Score:2)

      by Shados ( 741919 )
      You're right. Sony, Nintendo...they all did things like this. Its -common practice- even. Maybe not as blunt as straight out paying for exclusivity, but waving royalties in exchange for exclusivity wasn't uncommon.

      And well, during the PS era, Sony -mendated- that most multi-platform games had something exclusive on the playstation, or go to hell. They didn't even pay for it, they just used their influence, most of the time. Thats how console gaming business work, hehe.

  • Hackers should be able to liberate this content (Score:3, Insightful)

    by TheBishop613 ( 454798 ) on Monday June 18, 2007 @05:42PM (#19557229)
    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.

    • Re: (Score:3, Insightful)

      by dave562 ( 969951 )
      You're missing one key piece of the puzzle. The Hot Coffee content was on the original disc but Rockstar coded around the Hot Coffee code so that the content couldn't be accessed. "Hackers" found the content and released the Game Shark codes to access it.

      The content being talked about here is DOWNLOADED. There isn't anything to hack... unless you're going to hack Xbox Live or whatever Microsoft's online service is called.

  • 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.

    http://www.wired.com/gaming/gamingreviews/news/200 7/03/FF_160_rockstar?currentPage=1 [wired.com]

    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.

    • Re: (Score:2)

      by Scaba ( 183684 )

      ...MS does the same to help Rockstar (who has had financial problems for over a year) they are evil?

      You're the only one who said so. Evilness isn't mentioned or implied in the summary or article, except maybe in the vague way that MS is considered evil by a large number of geeks. (You also forget a "them" in front of "there heads" in your first sentence.)

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