2018-10-16 13:31:39 | Game On: Pachter says 'Red Dead Online' could be 25% as popular as 'GTA Online'Welcome to "Game On," The Fly's weekly recap of the stories powering up or beating down video game stocks. In this week's edition, The Fly held separate exclusive interviews with Benchmark analyst Mike Hickey and Wedbush Securities analyst Michael Pachter to gather their respective thoughts on a handful of topics in the video game sector. RED DEAD ONLINE: When asked whether he believed Take-Two's (TTWO) "Red Dead Online" will be as popular as "Grand Theft Auto Online," also published by Take-Two, Wedbush's Pachter said that it is "reasonable to conclude that 'Red Dead Online' will be 25% as popular as 'GTA Online.' And 'GTA' is doing $400M-$500M per year, so 'Red Dead Online' will probably do $100M-$125M. I mean, that's reasonable." Pachter said that number could be higher if Rockstar makes the game "a super fun experience," though he doesn't believe that the Old West aesthetic of the game will be as appealing as the modern day urban crime themes of "GTA." Meanwhile, Hickey said that he believes "Red Dead Online" will be successful, cautioning that there's "much to learn on the company's plan with online." Still, he noted that Rockstar "built one of the most compelling live services models in the market today" with "GTA Online." "Every time they announce new content for 'GTA Online,' it creates market awareness and excitement," Hickey said. "That's certainly going to encourage players to buy 'GTA V.' So, I don't see why you change what's [not] broken, you just make it better." LIVE SERVICES MODEL: On the topic of whether or not the live services model found in Rockstar-developed games is a sustainable business practice, especially considering "Red Dead Redemption 2" is the first release from Take-Two's Rockstar in five years, Mike Hickey said that the live services model "seems to be the direction" that most companies are heading. "Take-Two has been able to create solid profitability in non-release years," the Benchmark analyst said. "So less games, but bigger games that last longer is kind of what people are trying to achieve. And players are responding." Meanwhile, Wedbush's Pachter said that the live services model only works if the game is multiplayer. "You're not going to do a live services single-player game," Pachter told The Fly. "'GTA' works because 'GTA' is a single player game, and 'GTA Online' is the multiplayer experience. 'Red Dead' will work for the same reason. 'Call of Duty Blackout' (ATVI) will work for the same reason. In multiplayer, you only spend money because you're trying to defeat someone else or show off to somebody else. That's the reason for spending money on microtransactions for live services. So it's got to be multiplayer." | |
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