April 24, 2008 / 6:50 PM / 11 years ago

Grand Theft Auto 4 may help Sony gain ground

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.

A stack of Electronic Arts game title, FIFA Street 3, sits next to Take-Two Interactive Software title, Grand Theft Auto IV, in New York March 27, 2008. REUTERS/Lucas Jackson

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.

“So many people who owned the PS2 went into PlayStation family because of ‘GTA’. The release of ‘GTA4’ could expedite their decision to upgrade,” said Edward Williams, an analyst with BMO Capital Markets.

Scott Steinberg, vice president of marketing for Sony Computer Entertainment America, said “GTA4” was just one of several titles to drive PS3 sales in the coming months.

“I think without question that we are transitioning away from a tipping point to a shoving point for folks getting motivated,” Steinberg said. “For the whole spring and summer, we are expecting a pretty nice uptick in PS3 sales.”

COUNTERINTUITIVE

The idea that the PS3 will gain the most from “GTA4” will strike some as counterintuitive.

After all, Microsoft has the lure of exclusive, Xbox-only downloadable content that will arrive later in the year, a fact it is hammering home with a marketing blitz to rival that of its own flagship “Halo 3” game last year.

A poll on gaming blog Joystiq.com showed that 58 percent of the 38,000 votes cast were for the Xbox 360 version, with the downloadable content cited as one of the main reasons for the choice. That fed expectations that the enthusiasm would fuel more Xbox 360 sales as well.

The game will almost certainly sell more copies on the Xbox 360 given the bigger base of owners — 9.9 million in the United States versus 4.1 million for the PlayStation 3.

“Online is such a strong part of the game and Microsoft has done such a great job of developing the online community, so for people who own multiple consoles, they will buy it for the 360,” said IDC analyst Billy Pidgeon.

But Microsoft, coming off a blockbuster 2007 with hits like “Halo 3”, has a lighter exclusive lineup this year and analysts reckon that most dedicated gamers interested in buying an Xbox have already done so.

“It could sell a little bit more hardware for Sony than Microsoft, given where each of those boxes are in their life cycle,” Ricardo Torres, editor-in-chief of video game news site GameSpot.

“The PS3 has had a slow build but they have momentum coming off of the holidays and 2008 does look like it’s going to be their year. ‘Grand Theft Auto’ is really the starter pistol for four or five releases for Sony that will be a compelling reason to get a PS3.”

Editing by Brian Moss

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