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t1337dude 02-10-2019 03:49 AM

[Forbes] 'Red Dead Redemption 2' Sold More Than 23 Million Copies, So How Did Take-Two's Stock Price Drop?
 
'Red Dead Redemption 2' Sold More Than 23 Million Copies, So How Did Take-Two's Stock Price Drop?

Quote:

Per Take-Two Interactive, Red Dead Redemption 2, Rockstar's sprawling open-world western adventure has sold more than 23 million units worldwide. NBA 2K19 has proven to be its usual financial success and Grand Theft Auto V continues to roll on as the biggest gaming juggernaut in the history of the industry.

So why on Earth would Take-Two be experiencing any kind of decrease in shares?

Apparently, $450 million isn't always good enough for investors. That's especially the case when analyst estimated Take-Two Interactive's revenue for the current quarter to be $601 million. Per Yahoo Finance, that disparity is behind Take-Two's 14-percent shares dip. RDR 2 is still a massive commercial success, though it appears Red Dead Online, the game's purely online feature, might be in a position of stagnation as it's been in beta for three months and counting.

My Opinion: Seems to be confirmed what I was initially suspecting: the game is a gigantic financial flop. To recap for those not in the loop: Red Dead Redemption 2 was put out unfinished. The singleplayer component is littered with bugs and is missing the promised "HDR" feature (instead they included a broken version of HDR which decreases the contrast and was never fixed). The game has been out for months and Rockstar has released only a couple patches, lightly addressing the issues with the singleplayer, whereas most of their updates and post-release work has been focused on Red Dead Online. Initially Red Dead Online was expected at launch and then fans came to learn that they would only be able to play the beta version, weeks after the game's release. But progress has been stagnating - we're months after the release and the multiplayer component is still unfinished. Even before learning about these financial reports I couldn't help but wonder if Rockstar abandoned ship early on this project. It's disappointing really, I've owned the copy since launch and I'm still not going to bother playing past the first few hours until they at least fix the HDR and polish the SP a bit.

speed_demon 02-10-2019 04:01 AM

46 Attachment(s)
All games are a failure when compared against the behemoth success that is GTA V. And that is just where the bar has been set for any game in any genre on any platform.

huzzug 02-10-2019 04:13 AM

Quote:

Originally Posted by t1337dude (Post 27847126)
'Red Dead Redemption 2' Sold More Than 23 Million Copies, So How Did Take-Two's Stock Price Drop?




My Opinion: Seems to be confirmed what I was initially suspecting: the game is a gigantic financial flop.

No it isn't.

t1337dude 02-10-2019 05:14 AM

Quote:

Originally Posted by huzzug (Post 27847144)
No it isn't.

Maybe I'm wrong - relatively speaking, the game sold well. It received good critical reception (which doesn't really mean anything). But what it sounds like is that analysts projected the game to put Take-Two $150 million ahead of where they are now. You don't think valuing the company at 33% more than it actually turned out to be isn't a noteworthy financial disparity? Usually when I hear the word flop, I think "something that failed to meet expectations". The game did well but clearly people investing in the game as well as people involved were expecting the multiplayer to to be hugely significantly more profitable than it actually turned out to be - and that's a financial flop.

Quote:

Originally Posted by speed_demon (Post 27847132)
All games are a failure when compared against the behemoth success that is GTA V. And that is just where the bar has been set for any game in any genre on any platform.

In a sense you're right but given this is Rockstar, the same developers, people had good reason for RDR 2 to be a lot more popular and successful than it turned out to be. From what I saw, the game was a quickly dying fad that already came and went. It's not an unreasonable expectation either - had Take-Two given Rockstar enough time for them to flesh out their online component before releasing it, maybe they would have had a chance to go big. I have no doubt that given time, Red Dead Online's popularity will grow significantly as Rockstar works on it but it's unlikely at this point it will ever be in the ballpark of GTA V online. The issue is that they're competing with too many well-made free to play multiplayer games, and they didn't try hard enough to compete with those. I'm a big fan of Red Dead Redemption and all of my friends who play the game have shared their disappointment with me. Investors are clearly disappointed too. I don't think it's unfair to be disappointed.

Capcom's Resident Evil 2 on the other hand seems to be a huge success. Mainly due to their Monster Hunter series, Capcom has been doing extremely well and RE2 has been exceeding sales expectations.

huzzug 02-10-2019 05:37 AM

Quote:

Originally Posted by t1337dude (Post 27847184)
Maybe I'm wrong - relatively speaking, the game sold well. It received good critical reception (which doesn't really mean anything). But what it sounds like is that analysts projected the game to put Take-Two $150 million ahead of where they are now. You don't think valuing the company at 33% more than it actually turned out to be isn't a noteworthy financial disparity? Usually when I hear the word flop, I think "something that failed to meet expectations". The game did well but clearly people investing in the game as well as people involved were expecting the multiplayer to to be hugely significantly more profitable than it actually turned out to be - and that's a financial flop.

Had T2 earned those $150mil, it still wouldn't have put them $150mil ahead, as that is just the revenue. There is going to be cost associated with getting another $150mil.

But agreed that investors may not be happy. But when are they really?

speed_demon 02-10-2019 06:52 AM

There isn't always a cost associated with a greater revenue from a situation like this. This is one of the few cases that is true as profits scale in lock step with sales. It costs the same amount to develop the game if it sells a single copy or a billion copies.

I'm an investor and I find myself often quite happy with a company while at the same time my fellow shareholders are bemoaning a bad quarter or some other unimportant nonsense.

I think rdr2 was a success if only because of the commotion it caused around the web. It was a big enough deal that I've decided I'll buy a copy if it goes to PC.

anejchy 02-10-2019 08:49 AM

Quote:

Originally Posted by t1337dude (Post 27847184)
Maybe I'm wrong - relatively speaking, the game sold well.

Capcom's Resident Evil 2 on the other hand seems to be a huge success. Mainly due to their Monster Hunter series, Capcom has been doing extremely well and RE2 has been exceeding sales expectations.

What? The game sold just well? 23 million is an insane number for any game of any publisher. It easily puts it on the best selling video games list and makes it one of like 5 games to be on there released after 2013. And then you say RE2 is a huge success? Yes it is but it is in no way comparable to RDR2. RE2 sold 3 million first week, RDR2 sold 15 million. Still RE2 is very successful but that is a fifth of what RDR2 got so how do you call it just "well"?

Anyway point is that investors and their expectations are idiotic. Look at BFV, it sold 7 million and the investors say that it was a disappointment. Okay so looking at BF4 it cost 100 million to develop and then 100 million for marketing, let's say BFV is around there too. Revenue for 7 million copies is like 400 million so literally double the cost and the investors and disappointed? Get me out.

Omega X 02-10-2019 09:32 AM

Probably because they're not maximizing their profitability.

UltraMega 02-10-2019 10:49 AM

Gee, good thing they didn't release it on PC, the largest gaming market of them all.

Seems pretty stupid in that context.

huzzug 02-10-2019 11:12 AM

Quote:

Originally Posted by UltraMega (Post 27847460)
Gee, good thing they didn't release it on PC, the largest gaming market of them all.

Seems pretty stupid in that context.

PC isn't T2 biggest market. 80% of their revenue came from consoles.


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