BioShock is really a great property and I would like to see a movie that takes place in the setting, but it really has struggled to turn into a top tier franchise, and that is a bummer for Take-Two Interactive (TTWO). I know the company is pushing it hard. I saw a trailer for the game when I saw Django Unchained, which was a great movie. I expect marketing costs to be high. As I have mentioned in some older I do not like how the earnings call mentioned how increased marketing costs were responsible for weakness. It might be that sales will come down later, but I went back to a few other calls and it was the same old tale. Only GTA seems to make its marketing worth it. However, I wonder how much marketing is necessary for a game like GTA.
I have to admit some of those commercials on TV were interesting, but GameSpot really introduces me to games and you have YouTube with all their game trailers. Grand Theft Auto probably deserves a big marketing budget. However, for BioShock I think they should be careful with costs. The game will probably need a marketing push, but effective marketing not shotgun marketing. After BioShock 2 basically disappointed by selling the same number of units as the first, I think it would be good to keep costs low for BioShock Infinite.
There is no multiplayer, and while I personally think multiplayer is the least important part of a game after gameplay and story especially for a soft first person shooter like BioShock, it is frequently the most important part of the game for the masses. If Bioshock Infinite sells no better than BioShock 2, what will happen to TTWO. I think when the sales numbers come out the stock will take a hit. Although, I think that by the time they announce substantial results for BioShock Infinite, GTA V will be out so I might be wrong about the decline in the share price. BioShock Infinite is coming out at the end of the quarter, so it will take the quarter after to really get an idea of it. That quarter after is when GTA V is coming out. GTA V will be a huge success.
There is a reason that BioShock Infinite worries me though. If the company puts in a lot of money to market the game, and the sales numbers disappoint, then any title that is not a GTA might be a drain on the company. This seems to be a chronic pattern for the company. I actually do not like that GTA V is coming out so soon after. If you are a TTWO investor you might really like it, since the stock is likely to pop as soon as the game is released. I just would not buy the hype on one game. After GTA V comes out, and the big sales that happen early it will taper off. It might be years before the next GTA game comes out. What will the company do until then? As my previous articles indicate, TTWO is not in the best condition. With THQ’s (THQI) bankruptcy, I think the market will be negative on the video game industry. I still like Activision-Blizzard (ATVI) considering its cash, lack of debt, dividend, and pipeline.
I will be looking to see how BioShock Infinite sells, but I think it will be a disappointment for the company. The game might be top notch, but sales wise I think the bar is set high. The franchise does not tap into the enormous first person shooter crowd. It is not a traditional shooter, and without multiplayer those people might avoid the game anyway. BioShock got kind of creepy because being underwater is a bit of a downer. It is not a survival horror game, and if it was it would compete against Metro: Last Light, which is still coming out despite THQ’s problems. The Metro series is creepy.
I know I played this article a bit fast and loose. I just felt like it was worth analyzing BioShock Infinite. It is one of the more notable titles for TTWO. Red Dead Redemption has yet to be spawned into a franchise. GTA is a very old one with a strong following just because of mayhem. I do not like GTA style games. The story is uninterested and the gameplay is passable. I prefer strategy games or story driven action-adventure games. Black Ops (the first one) was fun to play. I did not like GTA IV it wore thin after an hour or so. I miss God of War.
BioShock Infinite is a better test of TTWO’s ability as a company. GTA is a crutch. A profitable crutch that should not be ignored, but one brand is not going make TTWO the industry leader. I think BioShock will struggle to find a large enough fanbase to justify the company’s expectations. It will be profitable, but not by enough. Margins will be hurt by the marketing budget. I will watch to see if I am right, but I would not recommend a position. Originally I thought the game would cause the stock to decline and you could play into the rise when GTA V comes out. However, since the releases are going to be fairly close together, at least to get some real numbers, I am not so sure. If first week sales disappoint, then you could buy TTWO or buy some calls to play a GTA V pop.
I am using the Blitz header and tag to signify this was just a quick write-up covering my thoughts not an in-depth look.