Pachter: GTA IV is not a Take-Two panacea

by Alexander Sliwinski { Dec 19th 2007 at 5:00PM }

Take-Two might be seeing improved financials, but Wedbush Morgan analyst Michael Pachter is tapping the brakes if the company thinks Grand Theft Auto IV is going to drive profits and be a "panacea" for all its ills. Giving GameDaily some fancy financial math, Pachter lays out that Take-Two management is operating in a fantasy world if they think their profit forecasts are credible. Pachter goes on to say that Take-Two still receives a "Sell" rating and questions if management is even capable of turning the company around.

He then plunges the dagger deep into Take-Two management not only over fiscal issues, but basic management. He believes they are sincerely trying to turn the company around, which continues to operate at a loss, but that they have "not managed a business like this one in an environment like this." He doesn't understand why there weren't staff reductions after the "abysmal performance" of All-Pro Football -- especially with EA having the NFL in its pocket. Pachter believes investor confidence in Take-Two is unfounded and reminds the company had a cumulative operating loss of $450 million between Feb. '05 and Jan. '08. He concludes that investors and management have "overconfidence in the performance of GTA IV."

Gallery: Grand Theft Auto IV

Tags: analyst, gtaiv, pachter, take-two, taketwo

Reader Comments (Page 1 of 1)

gonk @ Dec 19th 2007 5:07PM

man i'm sick of hearing about this guy here

Crono (NDF - Knight of the Old School) @ Dec 19th 2007 5:08PM

I just clicked on the comments about to ask "Is anybody else tires of hearing this guy".

Uncanny.

Marty @ Dec 19th 2007 5:07PM

The only fantasy world I see here is the one in which Wedbush-Morgan / Pachter operate in. I could make better industry predictions with a Ouija board.

Crono (NDF - Knight of the Old School) @ Dec 19th 2007 5:08PM

Well, yeah. The devil knows all, you know.

Jerk Face @ Dec 19th 2007 6:06PM

Well.. he doesn't know ALL.

http://www.qwantz.com/archive/000531.html

jovin6 @ Dec 19th 2007 6:28PM

I think it's pretty absurd that dozens of people here think they know better than a Wedbush analyst specializing in the industry. Not only does he have a finance background shared by few Joystiq readers, but he's also involved in the field on a daily basis. That means, among other things, that he has access to people and information that you only get to read about third-hand, after it's come out in a press report and then been rehashed again by Joystiq reporters.

Synner @ Dec 19th 2007 8:35PM

@ Jovin6

Maybe if he'd ever been right before he wouldn't get that reaction.

Yeef @ Dec 19th 2007 10:57PM

What you have to remember is that Pachter is a financial analyst by trade. All of his predictions about anything other than investing are irrelevant as they're not actually part of his job. If Patcher says something crazy like "Home will be ten times as popular as WoW" it's just him shooting from the hip, so to speak. On the other hand if he says the Eidos' stock is going to drop so much in Q1 2008 there's a good chance he's right as that's that type of thing he's actually PAID to analyze.

fugori @ Dec 19th 2007 5:16PM

"Pach Attack"... I'll listen to you again when you can beat my DTD 1.5 score. 8,286 on Hard. Your move, Pachter. Your move.

pantera6 @ Dec 19th 2007 5:18PM

he's right, i dont remember any GTA driving sales up atall for any sony console when they had exclusivity. if anything people were disgusted the fact the game was released.

Although im sure hes a very clever (yet naive) person. he mayby should have attended his first business studies class where they teach you that companies do not run at a loss for the fun of it if theres no sign of great profit comming up.

Especially compnaies which have been making one of the best know gaming franchises for the past 10 years (is it)

tmacairjordan87 @ Dec 19th 2007 5:23PM

15 million+ copies of each game (gta3, vice city, and san andreas) beg to differ with you.

sc7 @ Dec 19th 2007 7:47PM

@tmacairjordan87
Check the batteries in your sarcasm detector.

MasterInsan0 @ Dec 19th 2007 5:54PM

I vote that we introduce a new [sarcasm] tag to Joystiq, wherein people can place their sarcastic comments into nice, obvious italics for all the thickies to understand.

Jake11 @ Dec 19th 2007 6:11PM

how can you not detect the sarcasm there? it's almost tangible

tmacairjordan87 @ Dec 19th 2007 6:11PM

that was definitely my bad up there for not reading the entire comment. I blame the flu, unstable internet and HGH.

Jon @ Dec 19th 2007 5:38PM

Mmm...pancakes.

Mr Khan @ Dec 19th 2007 6:19PM

He's right for once, although the game could sell as well as its predecessors, i just don't think it will, and TakeTwo is sure to blow that money on a less intelligent RockStar title, or on some other bad venture (or they could invest in BioShock 2)

Although they've pretty much already made $50 million on the game, for the 360 exclusivity

slow news day, except for the Duke Nukem Forever trailer (a neat blast from the past)

Eddie @ Dec 19th 2007 6:38PM

I know more than Pachter because I'm right way more often than this tool is. I don't know what's more annoying, this guy walking around "acting as if" (Boiler Room reference) or Joystiq and subsidiaries reporting his every bowel movement.

Synner @ Dec 19th 2007 8:41PM

You know, I might be getting immediately flamed for this, but:

I think he may be partially right for once. GTA isn't the only game in town anymore.

I was just talking to my brother today and told him I had recently started playing Saint's Row again, and he said "No shit? Me too"

Turns out neither of us are getting GTA4, but we are both pretty excited about SR2.

I think with the option to play a character you can actually customize, rather than Cliche Movie joke #5 is far more compelling.