This violent videogame has made more money than any movie ever

Published: Apr 8, 2018 11:53 a.m. ET

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‘Grand Theft Auto V’ has brought in $6 billion, more than any other single media title in history, and continues to sell

Take-Two Interactive
“Grand Theft Auto V” was released in late 2013, but still sold at least 15 millions units in 2017, when it was the sixth best-selling videogame.

By

MaxA. Cherney

Tech reporter

“Grand Theft Auto V” has been criticized for depicting torture, deploying heavily sexual scenes, using racially offensive terms and a misogynistic portrayal of women.

It is also the most financially successful media title of all time.

Since it’s launch in 2013, “GTA V” has sold 90 million units, putting its total haul for publisher Take-Two Interactive Inc. TTWO, -4.06%  in the neighborhood of $6 billion—far above the success of blockbuster movies like “Star Wars” or “Gone With The Wind,” which both collected more than $3 billion, adjusted for inflation. Even taking into account DVD and streaming sales would not put the biggest movie blockbusters in GTA V’s neighborhood, said Cowen analyst Doug Creutz, estimating those sales might add up to $1 billion to the films’ totals.

“I think it’s a wild outlier,” Creutz told MarketWatch in a phone interview. “I think maybe with the exception something Nintendo has made—Mario Brothers—but aside from that there’s never been a console game that’s sold so many units.”

While the Mario franchise has sold more units in total, no single Mario game has come close to collecting $6 billion on its own. GTA V stands alone largely because of the title’s continued longevity: It continues to bring in hundreds of millions in revenue more than four years after its launch, finishing 2017 as the sixth best-selling videogame in the U.S., according to NPD Group data.

GTA V sales are so impressive over such a long period of time that when asked, Needham & Co. videogame analyst Laura Martin said she literally didn’t believe that a title originally launched in 2013 could sustain that level of success into 2018. Martin does not cover Take-Two, but does cover competitors Activision Blizzard Inc. ATVI, -2.96%  and Electronic Arts Inc. EA, -2.37% which employ a strategy similar to Nintendo’s with Mario: Crank out new titles based on the property to get more money.

“The companies I cover have a new update every year or two, at the longest, often with a big expansion pack,” she said in a telephone interview, adding that companies should be investing in titles every year within existing franchises.

By comparison to making films and other media, videogames are a lucrative and profitable industry, in part because the medium itself lends itself to a data-heavy approach in terms of what is and is not working to boost profits. In 2017, consumers spent $36 billion on videogames, up 15% from the year earlier, according to NPD Group data. Box office sales improved 3% globally to a record total of almost $40 billion, though domestic returns declined and prompted questions about cinema chains and film-production companies.

“Videogames are a much better business than [movie] studios,” said KeyBanc analyst Evan Wingren in a phone interview. “Games in general have the enviable position that their content is interactive, which allows them to make data-driven insights and adjust games and business models that benefits players and the company.”

Read: Videogame stocks in 2018: Trends seem good for publishers, bad for retailers

Investors appear to understand the potential for a massive windfall and sent Take-Two stock up 65% in the past year, as the S&P 500 index SPX, -2.19%  rose 13%. Rivals have benefited as well: Activision Blizzard climbed 33% and Electronic Arts shares rose 13% in the past year.

Whether there is a kind of secret sauce in “GTA V” and its colossal success that Take-Two can replicate in the future is an open question. The release timing benefited, to some extent, by the fact that the publisher released it two generations of gaming console—potentially selling duplicate copies, but also benefiting from two separate audiences. “There’s been some double dipping,” Creutz said.

Take-Two declined to make executives available for this article.

See also: ‘Call of Duty’ maker Activision shuts down sole U.S. distribution center and warehouse

“GTA V” is a very good game, according to critics and players. The gaming press gave the title strong reviews, despite the game initially lacking multiplayer component. Since its launch, developers at Rockstar Games—the Take-Two unit responsible for making the game—have taken pains to improve its flaws but also manufacture an enormous amount of additional interactive material.

“It’s a high-fidelity game that looks very good,” Wingren said. “Fidelity can only go so far, it comes down to content that they’ve created such as the vast world people can continually reinvest in. People create characters that become their second lives at times.”

The online world of “GTA V” also creates a model, says Wingren, where as people spend real money on online components, it allows Rockstar to reinvest resources into developing more content, which in turn fuels more spending by players. “It fuels this virtuous cycle.”

That world is also violent and rife with what critics call racially offensive language and sexual content that is misogyny toward women, among other things. The series has been dogged by controversy since it’s launch and the latest iteration of the game was no different: there is a grisly torture sequence, the game has a high body count (to put it mildly), it’s possible to kidnap and murder sex workers and people use footage from the game—and others—to harass women on the internet.

Yet despite the controversial aspects, the game is wildly successful.

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Its success leaves the looming and perhaps uncomfortable question for investors and Take-Two executives of whether the publisher is going to replicate the massive success “GTA V” has enjoyed. The company hasn’t formally announced a sequel which could potentially build on the audience of about 90 million, and declined to provide an update when MarketWatch asked.

Creutz says the possibility exists that upcoming titles such as the fall-slated “Red Dead Redemption 2” may be equally valuable, but it is remote.

“That’s not to say Rockstar won’t have other big hits—it may—but another ‘GTA V’ isn’t likely,” said Creutz. “Michael Jackson had a lot of hit albums but he only had one ‘Thriller.’”

Quote References

  • TTWO
    -4.00 -4.06%
  • ATVI
    -1.97 -2.96%
  • EA
    -2.87 -2.37%
  • SPX
    -58.37 -2.19%

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Max A. Cherney is a MarketWatch technology reporter based in San Francisco. Follow him on Twitter @chernandburn.

Max A. Cherney is a MarketWatch technology reporter based in San Francisco. Follow him on Twitter @chernandburn.

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