Take-Two Finances Follow-Up

[Ginger_Ale]

Yesterday, we reported on Take-Two's third quarter financial results.

A number of users discussed whether the dismal results would give good reason to focus on a possible Civilization 5. Going back to 2005 first quarter results, I compiled Take-Two's net revenue and net income (or loss) values for the past 19 quarters (roughly 5 years). See the graphs below:

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Keep in mind that Civ4 was released in October 2005 (the very end of 2005 4Q), Take-Two announced its purchase of Firaxis in November 2005 (2006 1Q), and Beyond the Sword came out in July 2007 (2007 3Q). Both Civ4 and BTS have noticeable gains in revenue, but Take-Two has been able to turn out two consecutive profitable quarters just once in this span.

For more, including exact figures and a breakdown of Take-Two's quarter structure, see the attached spreadsheet. (Disclaimer: numbers are not inflation-adjusted.)

 

[ThERat]

To be honest, Take Two has lost a lot of credibility for me with their launches. They gave me the impression to be quick in throwing a half finished product out in the market for the quick gains, but very slow to follow up with proper customer support.
If not for the many dedicated people e.g. here at civfanatics to iron out the many bugs of their games, the products would have been far worse.

I rememeber how you, Ginger_Ale compiled a big list of bugs with all our help. We basically did the work for them free of charge as dedicated fans of the series. I for one would rather see another company take charge of the franchise.
The way they handled the source code issue for Civ3 is also very disappointing. I for one wouldn't shed a tear, if they go bust.

 

[toft]

...I for one wouldn't shed a tear, if they go bust.

Yup, a new company that isnt just milking the franchise, would be nice. The worst thing that could happen... would be a new civ5 catering to the masses in order to make a fast profit.

 

[IamJohn]

The way they handled the source code issue for Civ3 is also very disappointing. I for one wouldn't shed a tear, if they go bust.

I'd rather Firaxis, under take2 made it, rather then just some random company off the street who happened to have the money to buy the franchise.

 

[Da_V_Man]

Yup, a new company that isnt just milking the franchise, would be nice. The worst thing that could happen... would be a new civ5 catering to the masses in order to make a fast profit.

They already did this. It was Civ Rev, which wasn't such a bad idea imo since it got more Civ 4 players. However, I hope that whatever happens, two things don't happen:

1. EA takes over Take Two
2. Civ 5 is dumbed down from from the previous Civs (like civ rev, but not a 'spinnoff' of sorts)

 

[JohnSearle]

I'd rather Firaxis, under take2 made it, rather then just some random company off the street who happened to have the money to buy the franchise.

It would hardly be a random company. If a corporate acquisition was to occur, it would most likely be from only a couple huge names.

Secondly, as for revenue being generated from the release of games... Revenue is only a portion of the equation, you really want to look at Net Profit, and the costs of game development and support when compared to revenue.

Perhaps it's more cost effective for them to focus on pumping out add-ons to already existing games engines, rather than focusing trying to develop a new Civ with enough improvement to warranty their customers to purchase it.

There's no doubt that they will be putting resources into Civ 5... but these charts don't help persuade much without the other figures.

- John

 

[darkedone02]

If take-two does go down, i wonder if steam or valve will purchase it, or someone who makes good games and not for the money, like gabe newell when he made half-life 2, left 4 dead and team fortress 2. IF they won't take it, I wonder if anyone else who made good games will.

Take-two made some bad moves, they sued the company who closed down while making duke nukem forever, like "kicking them while they are down". Now there was a rumor that someone else is making them.

 

[Atrebates]

Good lord that does not look like a healthy balance sheet.

People hoping Take Two might fold could get their wish.

 

[UNIT 666]

Steam isn't a developer. It's a digital distribution service created by Valve. Valve's games, I think, are all made on the Source Engine. I really cannot imagine Civilization on the Source Engine. :l

Random anecdote:
I believe I read that Take-Two (or maybe Rockstar) greatly overestimated what the initial sales would be for Grand Theft Auto IV.

 

[darkedone02]

Steam isn't a developer. It's a digital distribution service created by Valve. Valve's games, I think, are all made on the Source Engine. I really cannot imagine Civilization on the Source Engine. :l

Random anecdote:
I believe I read that Take-Two (or maybe Rockstar) greatly overestimated what the initial sales would be for Grand Theft Auto IV.

hey, valve are good game makers, and plus civilization is not made by take-two or valve, it was made by firexis and Sid Meier's himself. EA will get there lands on him and the games, but if valve beat it to them, they will let them continue making the games they wished for.

 

[cephalo]

The worst thing that could happen... would be a new civ5 catering to the masses in order to make a fast profit.

Agreed. To delay the sinking of Take2 would be the absolute worst reason in the world to make a Civ 5.

The games they make aren't exactly unpopular, they must be spending too much money.

 

[Matrix]

The worst thing that could happen... would be a new civ5 catering to the masses in order to make a fast profit.

Won't Sid Meier have added a clause which states that any version of Sid Meier's Civilization will need his approval, since the game carries his name?

 

[Powerslave]

Matrix, I think you're forgetting about Civilization: Call to Power, by Activision. However, I seem to remember Activision being sued by MicroProse for using their trademark ("Civilization"). According to Wikipedia, though, I'm wrong. So, who knows.

http://en.wikipedia.org/wiki/Call_to_Power

 

[JBConquests]

hey, valve are good game makers, and plus civilization is not made by take-two or valve, it was made by firexis and Sid Meier's himself. EA will get there lands on him and the games, but if valve beat it to them, they will let them continue making the games they wished for.

What does valve know about strategy games? There is no denying they can make a great shooter.

 

[Padma]

Matrix, I think you're forgetting about Civilization: Call to Power, by Activision. However, I seem to remember Activision being sued by MicroProse for using their trademark ("Civilization"). According to Wikipedia, though, I'm wrong. So, who knows.

http://en.wikipedia.org/wiki/Call_to_Power

You're not wrong.

The Wikipedia article doesn't mention it, but the statement

The game could not have "Civilization" in its title because Activision did not have a license for the "Civilization" name for a second game.

brings out the point that Activision didn't have a license for the name. They didn't have the license for the first game either, and got sued. That's why they had to not use it for CTP2.

 

[spammikone]

I don't know about the legal stuff, so...

Firaxis is part or Take-Two, but can it be considered being a separate entity in other aspects too than name only? If can, then...
Which one, Firaxis or Take-Two, owns the IP for Civilization franchise? Could Take-Two just sell the rights for making Civilization games, or transfer them to some other in-house developer, without the approval of Firaxis? And more importantly if Take-Two would take hit or would not be interested in publishing another Civilization game, would Firaxis be free to to seek other publishers or sell the IP?

 

[Padma]

As far as I understand, Take-Two has several semi-independent developer companies that they "own". Firaxis is one of these. While Take-Two might have legal authority to sell Civ out from under Firaxis (and they might not), they are probably too smart to do such a thing.

My guess is that Take-Two owns Civ4 (and probably Civ5, assuming that is currently in development). But I would bet that if Sid decided to leave, and start yet another company, he would take the rights to the "Sid Meier's Civilization" name with him.

Standard disclaimers: I am not a lawyer, and I don't *really* know any more than you about this.

 

[Vael]

In early 2005 Take 2 purchased the Civilization franchise from Atari. That being the case, I don't think there's any way Sid has ownership or rights to Civilization, whether his name is attached to it or not - there was a period of time where Firaxis (not owned by Take 2) was making Civilization for Take 2 (which owns the franchise). The way business works is that once you grant/sell the rights to your name they're not yours any more.

 

[drjest2000]

I think that the whole game industry has pretty much been headed for that white noise death of cosmic entropy ever since they started placing increased emphasis on ship-to-market dates rather than product longevity. Once you get the market conditioned to have the attention span of a fruit fly, you get stuck in a similar rut of feeding the market's need for bumps to feed the addiction to the shock of the new. Honestly, how different are any two shooters? The mechanics are all the same: kill thing, collect points, level up in some fashion, repeat ad nauseam. The past few years saw a market glut for mmorpgs that are all pretty much identical as farming operations. The only gaming sector that hasn't seen much real development is turn-based strategy games and that is pretty much a result of conditioning the market to have the attention span of a fruit fly. I am mindful that most of the games on my shelf are all strategy sims of some form, and the bulk of them have the product longevity of unrefrigerated milk.

TakeTwo is no better or worse than any other company that is driven by the need to feed its investors with a steady supply of capital gains taxes, they have increasingly sacrified production values and recycled code as much as humanly possible the same as every other fast-food style operation that is feeding the fruit-fly market. If you look at this site in a particular light, it exists not because of the fantastic work that TakeTwo or Firaxis or whoever did in producing the Civ franchise, but because of their failures. This site is a testament to the staleness of their ideas, the limits of their imagination, and their lack of interest in being creative.

In the business model I was taught all those years ago in high school, Take Two, EA, and numerous other companies merit extinction, regardless of the dire consequences that this has for the global economy. What they sell for all intentions is luxury goods, and whereas those things are nifty keano to have, you can't eat them, and you can't communicate them into anything particularly useful. Although the installation media for Master of Orion 3 makes a dandy coaster. If they all went belly-up at the same time, within a matter of moments there would be countless start-ups learning from their mistakes and we would get some decent coded games for a few years before the rinse-repeat kicked in.

 

[cephalo]

If they all went belly-up at the same time, within a matter of moments there would be countless start-ups learning from their mistakes and we would get some decent coded games for a few years before the rinse-repeat kicked in.

I think that any industry that produces art is doomed to follow this pattern. The needs of industry are almost the opposite to the needs of quality art. At some point the industry wants to control what people want in their music, television, games whatever, so that their product doesn't require all that inspiration that was needed to make them initially successful. Inspration is a wildcard that can't be controlled, and that is just plain bad for business.

Once they find what they think will be their magic formula that they can mass produce, we all suffer for a couple of years before the whole house of cards collapses. Yeah, I want some more reality TV. Hey look it's the Tanya Harding show. Greeeat...