"GTA" has sharpened a sword in ten years: a "gamble" with chips exceeding 100 million

Our reporters Xu Xinyi and Wu Kezhong report from Shanghai

“GTA”（侠盗猎车手）十年磨一剑。

Recently, the trailer of GTA 6, a new installment in the "GTA" series, has aroused the carnival of players around the world as soon as it was released: a few days after the trailer was released, its views and related online posts easily exceeded 100 million.

The GTA series has been separated from players for 10 years, and the trailer shows that GTA 6 may be a step closer to its predecessor. The development cost of its predecessor is already comparable to that of Hollywood films, and it is expected that GTA 6 will also have significant development and marketing costs.

In the eyes of the outside world, this new game will not only carry the expectations of countless players, but will also be the key to stabilizing the stock price and financial situation of Take-Two (the parent company of Rockstar, the producer of the "GTA" series). With the release of the trailer for GTA 6, Take-Two shares have been on the rise. As of January 3, 2024, the stock closed at $158.4 per share. And at the beginning of 2023, its share price was around $105.

The number of views exceeded 100 million

On December 5, 2023, the first trailer for GTA 6 was released. This is the first time that Rockstar has officially announced the release of a sequel to GTA 5 10 years after its release. GTA 6 is expected to be released in 2025, but the platform for which it will be released has not yet been announced.

The long-awaited classic game IP has launched a new work, which makes players excited.

A month before the trailer was released, Rockstar president Sam Houser "spoiled" the timing of the first trailer for GTA 6 on social networking sites. The "teaser of the teaser" garnered 1 million likes, 75 million views within 5 hours, and later broke the record for likes and views on a Twitter game tweet. As of January 3, 2024, the post has 1.6 million likes, 188 million views, 55,000 comments, and 507,000 retweets.

The game trailer surpassed 100 million views a few days after its release. So far, the trailer released by Rockstar Channel has reached 160 million views, not counting the video views after other media outlets have reprinted it.

The "GTA" series has been able to become the top of the global gaming circle, thanks to the accumulation of its predecessors. "GTA" is a series of games with a crime theme. The first GTA was released in 1997, in which players took on the role of a criminal operating in the city. Although the game had a high degree of freedom of exploration, due to the limitations of the technology and equipment at the time, the game adopted a 2D top-down perspective, which brought players a lack of immersion.

GTA 3, released in 2001, was the first 3D game in the series, followed by GTA: Vice City, which was the second to complete the game with more immersive content.

Released in 2008, GTA 4 was the sixth installment in the series and was a game-changer for the series. In this game, players can walk, drive, take taxis, and subway to wander through this open world set in New York. Compared to the animation quality of the previous game, the picture quality, textures, and lighting effects of this work have been greatly improved, and it appears more realistic.

The release of GTA 4 broke the gaming industry sales record, with first-day sales of $310 million and first-week revenue of $500 million.

Five years later, GTA 5 was released and was a great commercial success. Within 24 hours of its launch, it set a record-breaking sales of $800 million and $1 billion in revenue in three days, making it the fastest-selling entertainment product in history.

According to the financial report of Rockstar's parent company Take-Two, as of November 2023, 410 million copies of the "GTA" series of games have been sold. Among them, "GTA 5" was released on console platforms across three generations, and sold 190 million copies.

In addition to the "GTA" series, Rockstar also owns the "Red Dead Redemption" series, "L.A." Noire)" and other products, all of which are game products with good reputation and sales. As of November 2023, the Red Dead Redemption series has sold a total of 81 million copies, of which Red Dead Redemption 2 has sold more than 57 million copies, making it the second-best-selling title in the United States over the past five years.

The launch and best-selling of these titles strengthened Rockstar's brand and made players look forward to their next title.

High-cost "double-edged sword"

And "GTA 6" has attracted the attention of players, but also because the trailer reveals its excellent quality of work. The light and shadow, splashes, and clouds in the trailer all show the improvement of Rockstar's technical capabilities. It is expected that GTA 6's graphics will further surpass that of its predecessor.

At this time, Rockstar has not disclosed the development cost of GTA 6. Some gaming insiders predict that the development and marketing costs of GTA 6 will be much higher than that of its predecessor. In this regard, the reporter contacted Rockstar for an interview, but has not received a reply as of press time.

Before GTA 6, the "GTA" series of games was known for its high investment in development.

Among them, the development cost of "GTA 4" reached 100 million US dollars, which is on par with a movie. Of the films released in 2008, "Iron Man" cost $140 million, "Kung Fu Panda" $130 million, and "Batman: The Dark Knight" $185 million.

High costs lead to high returns. In the end, GTA 4 sold 25 million copies. A few years later, GTA 5 doubled in cost to $265 million, and 10 years after its launch, it remains one of Rockstar's revenue pillars.

Despite this, Take-Two's financial situation is hardly optimistic.

On November 9, 2023, Take-Two released its financial report showing that as of September 30, 2023, the company's single-quarter net income decreased by 7% year-on-year to US$1.3 billion, with a net loss of US$543.6 million, gross profit of US$415.4 million, and total net bookings decreased by 4% year-on-year to US$1.44 billion. The main reason for the loss was operating expenses of up to $959.1 million.

Take-Two's gross margin for the quarter was 32%. In contrast, Tencent's value-added business gross margin reached 55.5% in the third quarter of 2023.

Not only that, but Take-Two's revenue streams are concentrated on a few heavyweight products. According to the financial report, the largest contributors to net bookings are NBA 2K24, NBA 2K23, GTA OL, GTA 5, Red Dead Redemption 2, as well as many mobile and casual games from the company's mobile game manufacturer Zynga. Among them, "GTA OL" and "GTA 5" have been released for more than 10 years.

This model of "not opening for ten years, opening for ten years" has put game companies at great risk. As game production technology evolves, triple-A games will take more cost and time to produce, which will also expose companies to greater uncertainty.

Now, the news of the GTA 6 trailer has driven Take-Two's stock price upward, which now stands at $158.4 per share. And at the beginning of 2023, its share price was around $105. Whether Take-Two can maintain a stable stock price and financial data in the future depends on whether GTA 6 can meet players' expectations.

The pros and cons of the buyout system

In the eyes of game enthusiasts, stand-alone buyout games often have better quality, more complete mechanisms, and more reasonable and interesting gameplay. This is not necessarily the best business model for game manufacturers.

Zhang Shule, a critic of the game industry, told reporters that the buyout system of stand-alone games is the business model established to adapt to the division of game manufacturers and console platforms when game consoles rose in the 80s of the last century. After the 90s, many games also released expansion packs or expansion packs for secondary sales.

The free-to-play and pay-for-prop model appears in online games. Its advantage is to lower the threshold for game selection, so that more players may influx, and constantly update the game through the network to stick to users, and use props to stimulate more users to consume for a long time and obtain long-term benefits, "The disadvantage is that such games will find a 'pit' that stimulates user consumption as much as possible in the setting, and move towards the situation where paying users crush free users in the game experience, becoming a krypton game, and also affecting the game experience of the majority of users." Zhang Shule said.

According to the 2023 China Game Industry Report, China is a gaming market with 668 million players, of which more than 98% are mobile gamers. Although there is no shortage of buyout games on mobile platforms, almost all popular mobile games have long-term service products with free entry barriers and in-app purchases.

Over the years, domestic players have also called for the emergence of domestic triple-A stand-alone games. Is the difficult birth of domestic 3A games also related to the risks brought about by the high cost and high income of stand-alone games and one-shot trading?

Zhang Shule said that the inability of domestic 3A games to grow is indeed related to the strong profitability brought by the kryptonite game experience of free games and paid props, after all, it is easy to make money and it is easy to lie flat, but it is mainly because domestic games have lacked overseas perspectives and global competition strategies, and it is easy to fall into the situation of copycats. "But now, game quality and game going overseas have become the established strategy of mainstream game manufacturers, and global game manufacturers are moving towards a long-term service game model. Free-to-play games, paid props, and subscriptions are replacing the buyout system, so the game model is not a reason why domestic games don't have triple-A masterpieces. Zhang Shule said.