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Will Grand Theft Auto Change the Game?

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Title sells six million copies in first week.

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The numbers are in: $500 million in revenues and 6 million copies sold. But how much can one title really impact the gaming media universe? In fact, quite a bit. Here's what it could mean for industry leaders:

Take-Two Interactive

Software developer and distributor Take-Two (TTWO) has been waiting three years for this splash - or explosion, if you are a fan of the game. Grand Theft Auto IV's success has given Take-Two more currency in the mainstream and increased its valuation.

While its leadership and revolving door of C-level lawsuits have always been a cause for concern, Take-Two has shown it can deliver massive results from a single title and has every reason to swagger.

Could another jump in share price since Electronic Arts' (EA) last bid be coming? It's hard to say. Only four iterations of GTA have been released since 2001, but Take-Two may still be relatively cheap. (In this space, the market moves on merger activity, not game sales, but GTA could one day rewrite the rules.)

Don't expect Take-Two to squeeze this cash cow. The company has indicated that it won't leverage the franchise for outside revenue and has already dismissed attempts at a movie series. Electronic Arts may have a different approach

Electronic Arts

Electronic Arts wants Take-Two real bad. But if it wants to be in charge, it's going to have to pay - and then pay some more. Electronic Arts offered $2 billion. GTA made a quarter of that in one week.

Not only is the computer game distributor keen on the GTA franchise, absorbing Take-Two will virtually secure the sports gaming market. That means no more competition over hoops, pigskin, hockey and baseball titles. It also means less game innovation, but gamers are still going to buy their sports games--every year.

Microsoft and Sony

Sony's (SNE) Play Station 3 is making moves in recent sales rankings and every fight counts - especially the main events. Microsoft (MSFT) paid big bucks for the Xbox to be the exclusive console for GTA's downloadable content, or DLC. A few million copies sold at $10 a pop for DLC makes for some serious cake.

Match ten million Xbox online gamers with the allure and mileage of GTA and you have a compelling case to buy an Xbox over a PS3 - or get both. (The games are nearly identical, except there are more people on planet Xbox.)

Activision

GTA has already booted Activision's (ATVI) top title, Call of Duty, from the top spot in Xbox Live's online rankings, a spot which it's held for months. While the title is nearly seven months old, it's head spinning how quickly it's been dethroned.

Activision is still the stronger outfit. The stock's been a relative rock since it was boosted by the Vivendi Games deal. The company also boasts more frequent success through its titles. In addition to Call of Duty, Activision is the go-to shop for many movie-based games and, don't forget, Guitar Hero. These appeal to casual and hardcore gamers alike and leverage the growing online and DLC economy.

THQ

Why is this on the list? THQ's (THQI) Saint's Row, which many see as a good rip-off of GTA, made its mark on the sandbox genre in August 2006 with solid sales and critical support. With a sequel coming this summer, it can now be called a direct competitor to the GTA franchise.

While it's hard to believe it can compete right now -- many gamers will likely be glued to their plasma's playing GTA until year's end --THQ may make things interesting in time.
Position in TTWO
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