Grand Theft Auto 4 may help Sony gain ground

By Scott Hillis - Analysis

SAN FRANCISCO (Reuters) - "Grand Theft Auto 4," the biggest, meanest, raunchiest video game of the year, looks set to help Sony Corp's (6758.T) PlayStation 3 console gain new ground in its turf war with Microsoft's Xbox 360.

It's already a given that the newest chapter in Take-Two Interactive Software Inc's (TTWO.O) hit criminal franchise will be the biggest game of 2008, with up to $400 million expected in sales in its first week.

But "Grand Theft Auto 4," which rampages onto store shelves next Tuesday, will also be an important new weapon in the running battle between the PlayStation 3 and Microsoft Corp's (MSFT.O) Xbox 360.

The two console giants are trying to convince gamers that their machines offer the best way to revel in "GTA4's" gritty violence and gleefully dark skewering of American culture.

The game, which cannot be played on the older PlayStation 2 or original Xbox hardware, is expected to boost sales of the new consoles over the next few months, typically a slow season for the industry.

"This is one game that has the potential to move some hardware," Bob McKenzie, senior vice president of merchandising for video-game retail chain GameStop Corp (GME.N), said in an interview.

"The anticipation is that it will sell both systems."

But the PS3 stands to gain the most from the game and its tale of Niko, an Eastern European immigrant who must face his brutal past as he serves a crime syndicate by jacking cars, running drugs and rubbing out rivals.

The stakes are higher than ever. Last year, sales of video game console hardware in the United States soared 73 percent to $5.1 billion, according to market research firm NPD.

VICARIOUS THRILLS

"Grand Theft Auto 4" is expected to sell between 9 million and 12.5 million units in 2008, luring gamers with simulated vicarious thrills -- depending on one's viewpoint -- including drunk driving, stripper lap dances and the chance to fire heavy weaponry into urban crowds.

If sales come in at the high end of that range, the game will directly spur sales of 2 million additional PS3s in 2008, versus 1 million Xbox 360s, reckons Michael Pachter, an analyst with Wedbush Morgan.

"I think PS3 'wins' this battle," Pachter said.

The "GTA" series has played console kingmaker before. When "Grand Theft Auto 3" hit the PlayStation 2 in 2001, it was such a phenomenon that many people bought the machines just to play that one game.

Sony is now banking that many gamers who first played the series on the PlayStation 2 are Sony loyalists who see the new game as the ultimate reason to shell out $400 or more for a PlayStation 3.