Seriously SW, its not hard to understand. GTA DLC was a loan.

[QUOTE="st1ka"]

i agree, but then again we don't really know the terms of the contract, in my opinion rockstar was going trough a liquidity crisis. You'd be surprised the terms companies are willing to accept when their funds aren't in a liquid state

Nomad0404

Cash flow for games companies is always a problem it's hard to sustain a constant revenue stream unless you've got a game that has a subscription like WoW. So I agree the liquidity was possibly a problem but I bet Rockstar will be paid more money if the DLC sells more than around 3million for each release.

It's win/win for both sides. Rockstar get the money upfront setting them up nicely to work on more games, MS gets the exclusive DLC and the chance to earn more money out of it.

Phil

it's nice to talk to someone who has an understanding of management concepts :)

As I understood it MS paid them a guaranteed $50 mil for the DLC, but MS gets the money from the DLC up to $50 mil. So if it sells $10 mil worth MS is out of pocket for $40 mil and if it sells $80 mil rockstar keeps the $50 mil and MS would make $30 mil profit and makes back their original $50 mil. Does that make sense?

EDITed to clarify

It just boggles my mind that people don't know this. I've never seen a topic, discussion or article that DID NOT mention it was a loan.

Its like as if the article headline said: Microsoft pays 50 million as a loan to Rockstar and reader only read the bold part...

I don't care too much about Microsoft's money, but the lack of reading comprehension is just too blatant to not bring up.

Blue-Sky

As I understood it MS paid them a guaranteed $50 mil for the DLC, but MS gets the money from the DLC up to $50 mil. So if it sells $10 mil worth MS is out of pocket for $40 mil and if it sells $80 mil rockstar keeps the $50 mil and MS would make $30 mil profit and makes back their original $50 mil. Does that make sense?

EDITed to clarify

[QUOTE="Nomad0404"][QUOTE="st1ka"]

i agree, but then again we don't really know the terms of the contract, in my opinion rockstar was going trough a liquidity crisis. You'd be surprised the terms companies are willing to accept when their funds aren't in a liquid state

st1ka

Cash flow for games companies is always a problem it's hard to sustain a constant revenue stream unless you've got a game that has a subscription like WoW. So I agree the liquidity was possibly a problem but I bet Rockstar will be paid more money if the DLC sells more than around 3million for each release.

It's win/win for both sides. Rockstar get the money upfront setting them up nicely to work on more games, MS gets the exclusive DLC and the chance to earn more money out of it.

Phil

it's nice to talk to someone who has an understanding of management concepts :)

All you conspiracy "theorists" crack me up. It was a loan. This stuff is done ALL the time in other media. When you make a record, the proceeds aren't going directly to you, they are going to the label that signed you. You get a percentage of the proceeds and that's it. The operational costs that go into producing your album and promoting it is basically A LOAN. You are expected to recoup those costs.

This was a pretty straight forward deal. MS wanted exclusive DLC. They fronted the money to make it and Rockstar pays them back. Rockstar then gets the profits from the DLC.

It's amazing how these really dumb conspiracy theories completely overlook the obvious, in favor of some silly convoluted EVIL strategy.

All you conspiracy "theorists" crack me up. It was a loan. This stuff is done ALL the time in other media. When you make a record, the proceeds aren't going directly to you, they are going to the label that signed you. You get a percentage of the proceeds and that's it. The operational costs that go into producing your album and promoting it is basically A LOAN. You are expected to recoup those costs.

This was a pretty straight forward deal. MS wanted exclusive DLC. They fronted the money to make it and Rockstar pays them back. Rockstar then gets the profits from the DLC.

It's amazing how these really dumb conspiracy theories completely overlook the obvious, in favor of some silly convoluted EVIL strategy.

heretrix

So you mean to tell me that Microsoft isn't made of pure, concentrated EVIL? :|

I think you're lying to me...

How do some of you people see more in this than there really is? It's so damned simple.

Financially beleaguered Rockstar North receives $50,000,000 loan (NOT grant/donation), R* puts out exclusive DLC out on 360to help pay them back

[QUOTE="heretrix"]

All you conspiracy "theorists" crack me up. It was a loan. This stuff is done ALL the time in other media. When you make a record, the proceeds aren't going directly to you, they are going to the label that signed you. You get a percentage of the proceeds and that's it. The operational costs that go into producing your album and promoting it is basically A LOAN. You are expected to recoup those costs.

This was a pretty straight forward deal. MS wanted exclusive DLC. They fronted the money to make it and Rockstar pays them back. Rockstar then gets the profits from the DLC.

It's amazing how these really dumb conspiracy theories completely overlook the obvious, in favor of some silly convoluted EVIL strategy.

The_Game21x

So you mean to tell me that Microsoft isn't made of pure, concentrated EVIL? :|

I think you're lying to me...

How do some of you people see more in this than there really is? It's so damned simple.

Financially beleaguered Rockstar North receives $500,000,000 loan (NOT grant/donation), R* puts out exclusive DLC out on 360

Verge_6

[QUOTE="Verge_6"]

How do some of you people see more in this than there really is? It's so damned simple.

Financially beleaguered Rockstar North receives $500,000,000 loan (NOT grant/donation), R* puts out exclusive DLC out on 360

heretrix

As I understood it MS paid them a guaranteed $50 mil for the DLC, but MS gets the money from the DLC up to $50 mil. So if it sells $10 mil worth MS is out of pocket for $40 mil and if it sells $80 mil rockstar keeps the $50 mil and MS would make $30 mil profit and makes back their original $50 mil. Does that make sense?

EDITed to clarify

blue_hazy_basic

While I can't find any solid proof to back the loan claim because of the confidential nature of the agreement, I wouldn't be surprised if that was in fact how the deal went down. MS gives Rockstar the money to make the game, all the revenue of the DLC up to $50 mil goes to MS, and Rockstar gets to keep the extra.

When you think about it, it's not that bad of a deal. Given the price of the DLC (and assuming the other is similarly priced) they only need to sell 2.5 million units between the two DLC episodes to make the money back. Given that the game has a 6.8 million or so install base on the X360 thats not too much of a stretch.