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JaggedSac on 19 December 2008
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Nidan said:
KROCALOPOLIS said:

Why would take two have to pay MS or share any of the revenue of the DLC with MS. Take Two is being PAID to make the content only available for MS. Otherwise they could release it on both platforms. MS receives the benefit of increased hardware sales and increased subscriptions. If Take Two had to pay the 50,000,000 dollars back it simply wouldn't have happened.....It wasn't a loan, they have no debt, and good cash flow. IMHO I believe that the biggest winner is Take Two b/c every unit of DLC sold is probably added directly to the bottom line.

Anyways......I will be buying both

And thats why they recorded it in their accounts as two pre-payments??

I thought they were having problems with financing about 18 months ago or am I dreaming?

anyway

heres some old news

Next-Gen contacted Wedbush Morgan Securities analyst Michael Pachter, who further explained the deal. "What Microsoft did was pay a $50 million advance," he said, much in the same way a big-name author receives a payment in advance of his or her next book.

In other words, Microsoft is confident that Take-Two's portion of the revenue generated by GTA IV content downloads will surpass the $50 million advance paid.

"Microsoft basically said that it's happy to pay [Take-Two] in advance $50 million in revenue that [Take-Two] is going to receive from GTA IV downloads," he said.

Microsoft takes about a 30 percent cut from Xbox Live Marketplace content sales, according to Pachter.

Taking that 70/30 split (publisher/Microsoft) and the $50 million advance into account, Microsoft is apparently confident that GTA IV download revenues over Xbox Live will be at least $70 million.

If revenues don't meet that figure, Take-Two will have to return some of the advance, according to Pachter. But he said that there's no reason to believe Take-Two would actually miss that revenue target.

http://www.edge-online.com/news/microsoft-paid-50m-advance-gta-iv-content

 

 

Nice post.  Win Win for Microsoft.  They are guaranteed at least most of their money back.