This post is part of our feature on Money Losers of 2008. See all 20.

Take-Two Interactive's (NASDAQ: TTWO) Grand Theft Auto IV has made a lot of money. It's been the recent driving force for the software publisher's fortunes. And the Grand Theft Auto franchise is the reason why Electronic Arts (NASDAQ: ERTS) made a bid for the company earlier in the year (that transaction was never ultimately consummated).

But there's something of a sad story behind the glitz and glamor of the game. According to The New York Times, an actor named Michael Hollick, who played a character named Niko Bellic in the fourth Grand Theft Auto, received a small pittance in compensation when compared to the hundreds of millions of dollars in revenue that Take-Two took home for itself. Did Hollick earn only $2 million? $1 million? Did he only make $500,000?

Try $100,000. That's all Hollick grossed for himself and his major role in the incredibly successful game title! The Times article says that Hollick supplied his voice and motion-capture assets to the software, and he worked for about 15 months on the project. Can you believe that? No residuals, royalties, or anything else that begins with an r. Take-Two simply paid him a set fee and did not allow him to participate in any of the gross dollars captured by the mature-rated juggernaut.

Continue reading Money losers of 2008: Michael Hollick, voice actor in Grand Theft Auto IV

Money losers of 2008: Michael Hollick, voice actor in Grand Theft Auto IV originally appeared on BloggingStocks on Thu, 25 Dec 2008 10:10:00 EST. Please see our terms for use of feeds.

Take-Two Interactive (NASDAQ: TTWO) is riding high on its Grand Theft Auto IV title. The popular game (big understatement) helped push the top-line during the third quarter to a better than 100% gain, coming in at $433 million. As for the bottom line, forget about it -- that was blown out of the water. On an adjusted basis, net income was 93 cents per share versus a loss of $0.62 in the year-ago period.

According to Briefing.com, this simply was far more than any analyst anticipated. The bottom line bested estimates by 39 cents! Most shareholders probably anticipated Take-Two going beyond Wall Street's expectations, but I'm not sure they thought that the publisher could pull such an order of magnitude off. Nevertheless, management believes that next quarter might not be as hot as first anticipated due to some timing issues. So they guided lower for Q4. This might explain, in part, the lack of excitement surrounding the stock at the close of the after-hours session on Thursday. The stock ended up with a 0.5% gain in price.

However, all is not lost. While Take-Two thinks Q4 might not be the best thing since sliced bread, it is confident that it will be able to go beyond the original outlook for the fiscal year. Take-Two says it will deliver between $2.08 and $2.12 in adjusted earnings per share for the year. Wall Street was counting on $1.81 per share for the fiscal year. With the stock trading around the $23 mark, this would imply that the shares could be cheap.

Continue reading Take-Two takes analysts for a ride

Take-Two takes analysts for a ride originally appeared on BloggingStocks on Fri, 05 Sep 2008 09:00:00 EST. Please see our terms for use of feeds.

Take-Two Interactive's (NASDAQ: TTWO) Grand Theft Auto IV game stole the number-one position on the software sales chart for May, according to data from market research firm NPD. It sold over 1.3 million copies last month, and it has moved over 4 million since it hit the street. I figured Take-Two would be taking the top slot here, but the big question on my mind pertained to how Nintendo's (OTC: NTDOY) Wii system would do in May. After all, the fad has to wear out at some point, right? At some magical juncture, either Sony's (NYSE: SNE) PlayStation 3 or Microsoft's (NASDAQ: MSFT) Xbox 360 will displace the Wii and become the top-selling system of the month.

Well, that hasn't happened yet. The Wii sold the most, moving 675,000 systems. That was more than three times the amount of consoles sold by PlayStation 3. And as for the Xbox 360, that came in dead last, moving only 187,000 units. All told, total video-game sales, including hardware and games, increased 37% year-over-year. Yep, video games are still hot.

I'm going to predict that the Wii Fit will be the top-selling game package for the month of June. This thing is flying off the shelves in my area, even at $90 (apparently, high fuel costs aren't hurting Nintendo's clientele). Does that mean that Nintendo might make for a good short-term trade? Maybe, but I'd prefer buying it safely below $60 per share. As of this writing, it's trading well above $60 per share. I continue to hold Activision (NASDAQ: ATVI) as my play on video games, and will be keeping Electronic Arts (NASDAQ: ERTS) in the back of my mind as August approaches, since that will be when the new Madden game arrives in stores. Not sure if that's worthy of a trade yet.

Disclosure: I own Activision; positions can change at any time.

May was another merry month for the video-game industry originally appeared on BloggingStocks on Fri, 13 Jun 2008 12:08:00 EST. Please see our terms for use of feeds.

Here are some highlights from this past week's earnings coverage from BloggingStocks:

• Bob Evans Farms Inc. (NASDAQ: BOBE) posted stronger-than-expected Q4 earnings.
• Ciena Corp. (NASDAQ: CIEN) beat earnings expectations, but share prices slipped anyway.
• Daktronics Inc. (NASDAQ: DAKT) Q4 results beat expectations and it raised its revenue outlook.
• Diageo (NYSE: DEO) is recession-proof and should deliver solid results, predicts one adviser.
• Donaldson Company Inc. (NYSE: DCI) beat Q3 expectations and raised its full-year guidance.
• Ensco International Inc. (NYSE: ESV) was upgraded because of its earnings growth potential.
• Lehman Brothers Holdings Inc. (NYSE: LEH) earnings prospects don't impress Jim Cramer.
• Netezza Corp. (NYSE: NZ) beat Q1 expectations and offered full-year revenue guidance.
• Potash Corp. (NYSE: POT) earnings are "set to soar" says one analyst, due to rising demand and prices.
• Sherwin-Williams Co. (NYSE: SHW) lowered its Q2 and full-year forecasts, sending shares down.
• Take-Two Interactive Software Inc. (NASDAQ: TTWO) beat Q2 estimates on Grand Theft Auto IV demand.
• Trina Solar Ltd. (NYSE: TSL) beat Q1 estimates but shares fell on the disappointing Q2 outlook.
• Wal-Mart Stores Inc. (NYSE: WMT) was upgraded due to its earnings outlook and increased productivity.

See also: Earnings highlights: Toll Bros., National Semiconductor, Dr Pepper, Guess and others

Also, continued real estate losses are expected to hurt the quarterly reports of banks such as like Wachovia (NYSE: WB), Wells Fargo (NYSE: WFC), and National City (NYSE: NCC). And Steven Mallas wonders why Playboy (NYSE: PLA) shares have tanked since its last earnings report.

Upcoming results to watch for include Krispy Kreme (NYSE: KKD), Pall Corp. (NYSE: PLL), Pep Boys (NYSE: PBY), Korn Ferry (NYSE: KFY), and Casey's General Stores (NASDAQ: CASY).

Visit AOL Money & Finance for more earnings coverage.

Earnings highlights: Wal-Mart, Lehman Bros., Take-Two, Ciena, Trina Solar and others originally appeared on BloggingStocks on Sat, 07 Jun 2008 09:10:00 EST. Please see our terms for use of feeds.

Was it any surprise that Take-Two Interactive Software, Inc. (NASDAQ: TTWO) beat expectations for the second quarter? Not a chance. That's because Grand Theft Auto IV stole a lot of hardcore-gamer hearts when it made its eagerly anticipated debut back in April. Net revenues more than doubled to nearly $540 million in Q2, and adjusted net income came in at $1.52 per share. Briefing.com says that the bottom-line results were $0.39 ahead of analyst expectations. Again, we saw this coming.

Take-Two opened Grand Theft Auto IV on the Sony Corporation (NYSE: SNE) PlayStation 3 and Microsoft Corporation (NASDAQ: MSFT) Xbox 360 platforms with excellent fanfare and brilliant marketing, taking full advantage of the brand equity intrinsic to the title. An impressive 8.5 million discs of the title have been sold so far. Job well done. Plus, BioShock is coming to PlayStation 3 later this year. That's going to be a major franchise in the years to come.

Yet, I will not buy the stock. With the arbitrage battle surrounding Take-Two and its takeover dance with Electronic Arts (NASDAQ: ERTS), I simply am discouraged from stepping in and adding the company to my portfolio. I owned Take-Two at one time, but I'm not interested in getting back in. Besides, the news is out on Grand Theft Auto, so who knows if this would have been much of a trade right now, even if the EA deal wasn't on the table. Great quarter, excellent future guidance, but I just don't see the value of playing the buyout-game here.

Disclosure: I don't own any of these companies, but positions can change at any time.

Take-Two demolishes expectations in Q2 -- I'm still not a buyer originally appeared on BloggingStocks on Thu, 05 Jun 2008 18:00:00 EST. Please see our terms for use of feeds.

Take-Two Interactive (NASDAQ: TTWO) has launched its important new "Grand Theft Auto IV" franchise and it has done remarkably well. It did not cause a big bump in the firm's stock, which has only moved from $26.62 three weeks ago to $27.10.

The company's one suitor, Electronic Arts (NASDAQ: ERTS), had already taken the shares up from from under $18 with its buyout offer. Most analysts believe that the offer will be extended because Take-Two has resisted a buyout.

According to The Wall Street Journal, there is a "belief among Take-Two management and some of the company's shareholders that the company deserves a higher offer from EA. "

No matter what Take-Two believes, EA's best move now is probably not to extend the offer but, instead, to walk away. The Take-Two share price would be very likely to move back below $20, which would pressure the company's board to do something to move the share price back up again.

EA's shareholders are ill-served if the company extends its offer. Without a buyer, Take-Two might have to come to the negotiating table and Electronic Arts could get a better deal.

Douglas A. McIntyre is an editor at 247wallst.com and author of the Ten Stocks Under $10 letter.

Electronic Arts (ERTS) may extend offer for Take-Two (TTWO) originally appeared on BloggingStocks on Mon, 19 May 2008 04:02:00 EST. Please see our terms for use of feeds.

Take-Two Interactive (NASDAQ: TTWO) announced that its ultra-violent game Grand Theft Auto IV took in $500 million in sales in its first week. According to The New York Times "The report exceeded the sales expectations of analysts." It would mean that the company pushed out six million copies." As it turned out, estimates were right on the ball.

The market will say that the numbers will make it harder for larger video-game publisher Electronic Arts (NASDAQ: ERTS) to take over Take-Two. The offer sits at $25.74. The stock trades about $1 less than that.

The problem with Wall Street's view of the offer from EA is that it is not unlike Microsoft (NASDAQ: MSFT)'s bid for Yahoo! (NASDAQ: YHOO). The board at the portal may have viewed it as undervalued, but there are no other buyers. The bid went away and Yahoo!'s shares fell. If EA walks, TTWO shares drop.

Take-Two will tell the world that the Grand Theft Auto IV numbers warrant a higher offer from EA. If the larger company has any sense, it will walk away. That would move TTWO shares back to $17 where they traded before the offer. Management at the smaller company will look like a fool.

Douglas A. McIntyre is an editor at 247wallst.com and author of the Ten Stocks Under $10 letter.

A $500 million haul for 'Grand Theft Auto IV' (TTWO) originally appeared on BloggingStocks on Wed, 07 May 2008 09:57:00 EST. Please see our terms for use of feeds.

The theory makes sense. As the economy softens, Sony (NYSE: SNE), Microsoft (NASDAQ: MSFT), and Nintendo will cut the prices of their game consoles to keep sales volumes up. The CEO of game publisher Activision (NASDAQ: ATVI) has stated as much.

According to Reuters, "With the rising costs of fuel and food and housing, it is more difficult to go out and buy a $399 console, and I think it's going to put pressure on the console manufacturers to reduce their prices," Bobby Kotick said.

The problem presents a delicate balance for the console makers. Nintendo's stock has soared because of the popularity of the Wii. Microsoft just began to make money in its device division in the first quarter of the year. After a number of quarters of losses, it looks like the PS3 may start to contribute to the Sony P&L.

Holding prices may keep margins high, but drop unit sales.

There are two factors that work in favor of the console producers. The first is that, as their manufacturing volume has gone up, component prices have come down. That means if retail prices are lowered, the companies can still make money.

The other factor is that all three companies get licensing fees from each video game that is sold to run on its platform. With new offerings like Grand Theft Auto IV on the market, those fees should soften the blow of lowering hardware prices.

Watch for the price of game consoles to be dropped -- and soon.

Douglas A. McIntyre is an editor at 247wallst.com and author of the Ten Stocks Under $10 letter.

Activision sees cuts in game console prices originally appeared on BloggingStocks on Thu, 01 May 2008 13:55:00 EST. Please see our terms for use of feeds.

So Take-Two Interactive (NASDAQ: TTWO) is about to have one heck of a week. Tell me if I'm wrong, but I'm willing to bet everyone reading this knows that today is launch day for Grand Theft Auto IV on the Sony (NYSE: SNE) PlayStation 3 and Microsoft (NASDAQ: MSFT) Xbox 360 consoles. And I'm sure there were many hardcore fans at Best Buy (NASDAQ: BBY) and GameStop (NYSE: GME) today, ready with cold-hard-cash in their hands to snag the software; in fact, this article talks about how some stores were open at midnight to satisfy the pent-up demand (remember, this title was delayed). And Douglas McIntyre discussed the game earlier today as being a potential barometer in terms of consumer confidence.

With all this incredible buzz, with the projection that GTA IV might move close to 10 million discs this year, should you be interested in taking on some Take-Two stock for your investment portfolio? The answer for me is no, Take-Two is not a buy here. Remember that we still have the whole arbitrage game going on with it since Electronic Arts (NASDAQ: ERTS) wants to buy the publisher; also recall that Take-Two is gunning for a higher offer and purposely delayed further negotiations until after the release of GTA IV. I sold my position when the whole buyout offer was made a while ago, and I'm still glad that I did -- for me, the trade was over at that point, and I was happy to simply own my Activision (NASDAQ: ATVI) shares.

Continue reading Should you buy Take-Two based on the Grand Theft Auto IV buzz?

Should you buy Take-Two based on the Grand Theft Auto IV buzz? originally appeared on BloggingStocks on Tue, 29 Apr 2008 15:48:00 EST. Please see our terms for use of feeds.