[QUOTE="Zeliard9"][QUOTE="donwoogie"][QUOTE="room420"]While doing some research into the DLC I came across this article.
Next-Gen contacted Wedbush Morgan Securities analyst Michael Pachter, who further explained the deal. "What Microsoft did was pay a $50 million advance," he said, much in the same way a big-name author receives a payment in advance of his or her next book.
In other words, Microsoft is confident that Take-Two's portion of the revenue generated by GTA IV content downloads will surpass the $50 million advance paid.
"Microsoft basically said that it's happy to pay [Take-Two] in advance $50 million in revenue that [Take-Two] is going to receive from GTA IV downloads," he said.
Microsoft takes about a 30 percent cut from Xbox Live Marketplace content sales, according to Pachter.
Taking that 70/30 split (publisher/Microsoft) and the $50 million advance into account, Microsoft is apparently confident that GTA IV download revenues over Xbox Live will be at least $70 million.
If revenues don't meet that figure, Take-Two will have to return some of the advance, according to Pachter. But he said that there's no reason to believe Take-Two would actually miss that revenue target.
If this is true, then MS did not pay $50 mil for the two episodes but rather advanced T2 the projected earnings from the DLC in exchange for the exclusivity deal. The nature of the deal is still unknown, but given this info and Rockstars history for exclusivity, it seems possible that once the advance is re-payed the episodes may become available for all platforms. Unfortunately, if this is true it might also indicate the size of the DLC is more along the lines of side missions as opposed to additional land area.
donwoogie
rofl, reiterating my prediction and taking all bets! Story arc with sub-missions :P
Seems more likely to me that if Take-Two has to make a minimum of $70 million revenue, then the DLC has to be substantial. How many people are really going to buy extra sub-missions for an already overflowing game, and how could Rockstar guarantee they'd make $70 million from that alone? They couldn't. The potential audience for a thing like that would be too small, when you take into account all the factors.
If it's projected to make $70 million, that only gives added weight to the argument that the DLC isn't exactly horse armor. People will buy it. And people will buy it for a reason that has to naturally be more than simply extra missions, especially considering how fully-featured the multiplayer is. $70 million is a lot of revenue. If Take-Two doesn't match that, they have to pay the difference. Either they have the largest balls on earth, or they have a trick up their sleeve.
Correct me if I'm wrong though, if Take-Two fails to meet the 50mil target, wouldn't that break the exclusivity deal?
Why would Microsoft have to bear the burden if Take-Two can't make their own revenue? If Pachter is correct then T2 put themselves in a very tough position. They essentially have to guarantee that a certain amount of people will buy the DLC. If they don't do that, Microsoft still has exclusivity (at least for whatever time-frame they agreed upon) and they get back some of their advance.
According to that article, the exclusivity was already guaranteed simply by MS ponying up the $50 million advance. They themselves don't have to do anything else now except advertise. It's all on Take-Two and Rockstar.
Thing is, I strongly doubt that Microsoft cares nearly as much about getting that money back as they want the DLC to be good enough so that people buy it, the ultimate goal of which is to increase the 360's overall popularity and install base. That's why they gave up $50 mill in the first place, because they thought it'd be a great investment. If it ends up a case where a lot of people don't buy the DLC and it doesn't make enough money, I guarantee you MS will be none too happy even if they get a chunk of the $50 million back.
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