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Private Division - new independent games label from Take-Two Interactive

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Codex Year of the Donut Serpent in the Staglands Dead State Divinity: Original Sin Project: Eternity Torment: Tides of Numenera Wasteland 2 Shadorwun: Hong Kong Divinity: Original Sin 2 A Beautifully Desolate Campaign Pillars of Eternity 2: Deadfire Pathfinder: Kingmaker Pathfinder: Wrath I'm very into cock and ball torture I helped put crap in Monomyth
Publishing Tim Cain and Leonard Boyarsky's project at Obsidian, among several others:



http://ir.take2games.com/phoenix.zhtml?c=86428&p=irol-newsArticle&ID=2322707

Take-Two Interactive Software Announces Formation of Private Division™
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New label to publish games from top creative talent in the growing independent development landscape

NEW YORK--(BUSINESS WIRE)--Dec. 14, 2017-- Take-Two Interactive Software, Inc. (NASDAQ:TTWO) today announced the formation of Private Division, a new publishing label comprised of proven games industry veterans that is dedicated to bringing titles from top independent developers to market. Private Division is a developer-focused publisher that empowers independent studios to develop the games that they are passionate about creating, while providing the support that they need to make their titles critically and commercially successful on a global scale.

Private Division will publish several upcoming titles* based on new IP from renowned industry creative talent, including the previously announced Ancestors: The Humankind Odyssey from Panache Digital Games, a studio led by the creator of the Assassin’s Creed franchise Patrice Désilets; an unannounced RPG currently codenamed Project Wight from The Outsiders, a studio founded by ex-DICE developers David Goldfarb and Ben Cousins; an unannounced RPG from Obsidian Entertainment led by Tim Cainand Leonard Boyarsky, co-creators of Fallout; and an unannounced sci-fi first-person shooter from V1 Interactive, a studio founded by Halo co-creator Marcus Lehto. Additionally, Private Division is the publisher for Kerbal Space Program, which Take-Two acquired in May, 2017.

“We have spent more than two years laying the groundwork for Private Division, building an experienced publishing team and signing projects with some the most respected and talented creative leaders in our industry,” said Michael Worosz, SVP and Head of Independent Publishing at Take-Two. “We see a growing number of independent studios in our industry creating high quality games based on new IP, and our focus is supporting these types of developers and projects, and ultimately bringing incredible experiences to gamers around the world.”

Private Division is headquartered in New York City with offices in Seattle and Munich, and is a publishing label of Take-Two Interactive Software, Inc. (NASDAQ:TTWO). Private Division is the third publishing label within the Take-Two Interactive family, operating independently from Rockstar Games and 2K. For more information, please visit www.privatedivision.com.

*With the exception of the Kerbal Space Program: Making History Expansion that is slated for release in the winter of 2018, there are no titles from Private Division currently planned for release during Take-Two’s fiscal years ending March 31, 2018 and 2019.

http://www.gameinformer.com/b/featu...es-new-publishing-label-private-division.aspx

The Inside Story Of Take-Two's New Publishing Label, Private Division

Private_5F00_Division_5F00_610.jpg


The video game industry is built on unsteady ground. Its tectonic plates constantly shift as this $100 billion global business expands to new platforms, publishers search for new revenue models, and studios rise and fall. The volatile but lucrative console market makes it hard for anyone but the most entrenched development teams to maintain solid footing over a long period of time. Why spend hundreds of millions of dollars on novel new ideas that could fail in this hypercompetitive landscape when you could sink more marketing and funding into sure bets like Madden, Call of Duty, and World of Warcraft, making them living services that continue to receive new content throughout the year?

The argument makes sense from a short-term business perspective, but playing it safe stifles innovation, which could hurt these companies and brands in the long run. This leaves the door wide open for a disruptor like Private Division to emerge. This new Take-Two publishing label stands alongside Rockstar and 2K Games, but it plays by much different rules. Rather than going big with benchmark-setting endeavors like Grand Theft Auto or supporting perennial juggernauts like NBA 2K, the new label’s directive is to identify smaller teams of experienced developers with great ideas, fund their projects, and in a surprise twist, let the studios keep the rights to the intellectual property.

Private Division’s unconventional approach found a receptive audience in the many talented developers burned out from working on 300-person teams and playing office politics. The first four studios that signed deals with the newly formed publisher boast impressive resumes with games like Assassin’s Creed, Fallout, Halo, and Battlefield. Each is a smaller-scale project with smaller teams that maintain the production values gamers expect in a triple-A title, but deliver an experience tighter in scope and scale (think Ninja Theory’s Hellblade: Senua’s Sacrifice). All are bringing new concepts they are passionate about to life in the hopes of finding the footing that can prove so elusive in this industry.
ACTION PUBLISHING

Michael Worosz is no stranger to risk. A former naval intelligence officer who once held the nation’s top security clearance, Worosz’s idea of a good time is scaling mountains and either biking or skiing back down, depending on the season. That comfort with danger serves him well in the high stakes world of business development, where he’s aided Take-Two for the last seven years.

While looking for acquisition and investment opportunities in recent years, Worosz kept coming across a similar type of pitch that didn’t quite fit under either the Rockstar or 2K Games umbrellas. “We assessed the market and saw numerous instances of proven creatives darkening our door who had left major studio systems and were interested in working on something more entrepreneurial,” he says. “They were more enamored with the idea of focusing on the game product and leading smaller, more nimble teams, and were less interested in working in 300-400 person organizations for five-plus years to bring a new quad-A game to market.”

As the landscape stood two and a half years ago, publishers weren’t funding many of these types of projects. Indie houses like Devolver focused on more nimble, lower budget games like Hotline Miami, major publishers concentrated on the triple-A and mobile spaces, and private equity companies were more enamored with lucrative mobile gaming investments. Mid-sized studios looking for backing beyond crowd-funding and self-funding had few options, despite their promising game ideas and impressive track records.

Sensing an untapped talent market ripe for the picking, Worosz put together a pitch for chairman and CEO Strauss Zelnick. He saw the potential as well, and gave Worosz the green light to create a new Take-Two publishing label specializing in identifying and supporting the most promising “triple-I” projects. Private Division was born.

PD_5F00_Project_5F00_Wight_5F00_Game_5F00_Informer_5F00_8.jpg

Project Wight

ZIGGING INSTEAD OF ZAGGING

In game development, creators rarely have the last word when it comes to the execution of their vision. Too often in large-scale publishing, their concept can be compromised by too many cooks in the kitchen. This can create schisms between the business and creative camps, such as the Call of Duty creators Vince Zampella and Jason West’s ugly and litigious falling-out with Activision.

Relinquishing control of the IP or leaving creators to their own creative devices may be a non-starter for the vast majority of game publishers, but other media has evolved beyond this paradigm. Many Hollywood studios and record labels understand they don’t need to demand complete control over a project to develop a beneficial relationship.

“This is the thing I take from Strauss Zelnick's playbook,” Worosz says. “He's been a career entertainment executive who has worked in Hollywood, music, and now video games …. What that means practically is no one on the Take-Two management team will ever opine on how a game should look, feel, or play. No one's ever going to tell the people in the studios that we've partnered with what a game should look like. That's for the team on the ground working on that game every day.”

Worosz understood that by offering the game development Holy Grail no other publisher was even willing to discuss, let alone surrender, Private Division had a great opportunity for attracting top talent to its label. All the developers we spoke with at Panache, Obsidian, V1 Interactive, and The Outsiders said retaining their IP was the most significant factor in signing with Private Division.

“We didn't want to cede control of this thing, essentially,” says The Outsiders co-founder David Goldfarb, the former Battlefield: Bad Company 2 and Payday 2 lead whose studio is publishing its first game with Private Division. “You always hope for the best, but maybe in some cases, and I know from talking to friends of mine, you lose control of the thing that you spend an enormous amount of energy and time on.”

For The Outsiders, controlling its IP is essential for its other business endeavors. The founders see their studio as an entertainment company that hopes to extend the IP through movies, TV, clothing, comics, and other merchandising opportunities.

Beyond the IP retention, receiving backing from a major publisher also helped these studios in another critical era – talent acquisition. “It was way easier for us to recruit new team members,” says Panache Digital co-founder Patrice Désilets. Best known for his work on the formative Assassin’s Creed titles, his next title, Ancestors: The Humankind Odyssey, is being published under the Private Division label. “The ecosystem here in Montreal is really competitive, so when we could say to people, ‘We're not only a studio with a little bit of money, but we're being backed by real pros, so don't worry and come join us instead of going to the big studios.’ It helped us a lot.”

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DREAMWEAVERS

Since the studios control the creative vision and execution, Private Division had to re-examine the fundamental publisher/developer relationship. The label needed to embrace a reactive approach that foregoes making broad decrees about game direction and instead enables teams to overcome any potential roadblocks that arise during development. To do so, Worosz hired a VP of production with first-hand experience sitting on the other side of the table.

A longtime developer with an impressive resume that includes stints at Bungie, Microsoft, and PopCap, Allen Murray strives for Private Division to be a “light-touch publisher.” He doesn’t want a lot of label employees attached to these projects in positions that could strong-arm the creative vision. Instead, he thinks about how to best support the projects.

“I think we sometimes act as therapists,” Murray says. “We hear about all these things they are worried about and take it all in and think about it and try to help them find a solution. Or maybe we just listen, you know? Just help them bear that weight. Because it's a lot.”

The studio leads we spoke with all voiced appreciation for this approach, singing praises for Murray and his team. “I feel a lot more respect about the craft of game making, and that they let us continue having this grand vision and enable us to be even better than what we think we can be,” Désilets says. “We goof up and they say, ‘Look, we know what you can do, but what about this, what about that?’ You're having a really good conversation about gaming.”

“I think it has all the strengths of the traditional publisher relationship but because we get to retain ownership of the IP, it's one of the things where I don't think we're worried about our goals aligning with the publisher goals,” says Obsidian Entertainment’s Tim Cain, who has reunited with fellow Fallout co-creator Leonard Boyarsky to develop a new RPG under the Private Division label. “We both want to see the IP be very successful because we are both vested in

THE GAMING GAMBIT

Private Division now has four projects in full production, but don’t expect a rapid set of release dates. Murray worked carefully with each studio to map out realistic development timelines that take into account the business realities of building a studio in addition to the game. These releases will likely extend into the latter half of 2019.

“Video games are literally at the point where art meets science, right?” Worosz says. “But very few things go according to a predefined, scientific plan, especially in terms of video game production. Things are going to move around and we're going to make sure that each game has its own moment in the sun.”

Once the games get closer to completion, Private Division can flex Take-Two’s considerable muscle as an experienced publisher to aid with quality assurance, console certification, localization, and getting the word out about the games. Though the majority of the Private Division staff operates independently from the rest of Take-Two, they share one critical resource: the global sales force.

“With regards to getting the game out there in front of people with marketing and making sure they have all the right avenues and the right amount of cash to put into it, we are so glad they are driving that part of it because if we were completely independent and trying to self-fund or use Kickstarter or something like that, even if you make a great game it's so difficult to get it out there in front of people's eyes and to get people to notice,” says Marcus Lehto, a former Halo and Destiny senior developer whose new studio V1 Interactive is working with Private Division on a sci-fi shooter.

All the games will launch digitally first, but should there prove to be demand, Private Division has the means to bring the games to traditional retail channels as well.

In one sense, getting these exciting ideas off the ground and out the door is the “easy” part for Private Division. They have that process mapped out already and the talent to execute. But what happens after this initial lineup of games ship is still up in the air.

Does the label continue to identify and fund exciting new IP with other indie studios, or does it instead take a more conventional publishing approach and rally around a game where they see franchise potential? Do the continue to make acquisitions, as it did with Kerbal Space Program? These are questions with a lot of moving parts, and Private Division isn’t dismissing any potential avenue for growth.

“We've been open to being malleable and changing so I expect us to be constantly evaluating that,” Murray says. “You raise a lot of very good and obvious questions, and the answer is we're figuring that out. We want to be able to support these games and these developers as they grow. That may mean that we grow and change with them.”

In the meantime, the four games under Private Division continue to revel in their creative freedom, hoping to reignite the spark that helped their studio partners come up with brilliant concepts like Assassin’s Creed, Halo, and Fallout.

“To be honest with you, it feels a lot like the early game days,” Lehto says. “Initially it was just myself and Jason Jones doing Halo for a number of months before we brought on a larger team. Even still, that team was very small for a large portion of the development of Halo 1. And that was true even at Bungie when we were beginning to develop Destiny. The best work that I think a studio can do is when it's got that small team that's hyper focused on that creative idea and is able to rapidly innovate those creative ideas.”

Private Division is betting on it.

http://www.gamesindustry.biz/articl...-wants-to-empower-a-new-breed-of-indie-studio

With Private Division, Take-Two wants to empower a new breed of indie developer
Michael Worosz on the emergence of a high-end indie development, and Take-Two's "venture capital meets game publishing" strategic response

As the number of independent developers has grown, so too has the number of publishers offering to help them cut through the noise and find an audience. Devolver Digital, Versus Evil, Raw Fury, Annapurna, Team17, Curve Digital; the list is long, and it seems to grow longer with every passing month.

Despite the existence of so many indie publishers, however, they do not serve the needs of every independent creator. The emergence of digital platforms and cheap, accessible tools didn't just empower individuals and small teams; it also caused influential figures at major publishers and developers to start considering their options. Some of them stayed within the confines of those bigger companies, others departed to explore their options, and a few ended up at Take-Two's door.

"We were seeing really experienced creatives on our doorstep, darkening our inbox with really compelling opportunities," says Michael Worosz, head of corporate development and independent publishing at Take-Two Interactive. "With smaller budgets, but no less ambitious endeavours, looking for publishing opportunities.

"Within Take-Two we really didn't have a home for those endeavours: Rockstar focuses on its own IP; 2K does both owned and third-party IPs, generally with much larger budgets. But we were seeing projects from Patrice Desilets, and [V1 Interactive founder] Marcus Lehto, a 20-year Bungie veteran, that we were genuinely very excited about.

"We thought they had AAA sensibilities, but they didn't have 50-hours plus of gameplay necessarily."

Take-Two recognised the possible emergence of a robust new category of independent developer; seasoned creators with ambitious ideas, caught in the economic no man's land between AAA publishers and the size and type of studio generally associated with the term "indie". Much like Ninja Theory's excellent Hellblade, moving too far towards either extreme would likely involve compromise; either in terms of subject matter or production values and polish.

Worosz describes this new category as a "blue ocean" within the games market, and it is one that Take-Two will address with a new, dedicated publishing arm: Private Division.

The initial slate is impressive: Patrice Desilets will partner with Private Division on Ancestors: The Humankind Odyssey, the first game from his studio, Panache Digital; The Outsiders, the studio started by EA DICE alumni David Goldfarb and Ben Cousins, has signed up to the label with Project Wight; Halo co-creator Marcus Lehto is onboard with V1 Interactive's still unannounced debut project; there will be a new Obsidian Entertainment RPG, led by Tim Cain and Leonard Boyarsky, the creative team responsible for Fallout; finally, the Take-Two ownedKerbal Space Program will also be published by Private Division.

According to Worosz, Take-Two started laying the foundations two years ago, and the publisher wanted the unveiling to have an impact. Other publishers have dabbled with smaller titles - Ubisoft with Child of Light and Valiant Hearts, for example, or EA with Unravel and Fe - but Take-Two wanted to mark out Private Division as different from the very beginning.

"That was some of the spirit behind going out with a robust line-up in the way that we have," he says. "Seeing the fact that we're working with Obsidian on a deep, immersive RPG is going to get people excited. They'll know that we're not talking about small experiments."

Worosz makes it clear that, when he talks about these projects having "smaller budgets", that is relative to the size of the budgets that Take-Two's other labels, 2K and Rockstar, normally deal with. Private Division was founded on the connected beliefs that some ideas require a substantial investment to be fully realised, and that the swelling budgets in AAA development are leaving some ideas behind - whether that's down to gameplay hours, riskier subject matter, or an absence of multiplayer modes.

"With the investment risk for video games now easily eclipsing $100 million in development spend, it's really hard to break new IP," he says. "You're taking a new risk every time you try to bring IP to the market, and that's a big cheque to write for something that is as yet unproven.


"This accomplishes a strategic goal of Take Two's, where we're helping to break new IP. But we're offsetting that risk by virtue of lower development budgets, and also by virtue of working with these proven creative talents. From a strategy standpoint, it all lines up."

According to Worosz, Private Division has "no min or max threshold" in terms of budget on the games it signs, though it will always inhabit the space between AAA and "ultra indie" in that respect. The label's real "north star" in terms of selection is people, placing emphasis on, "a creator who's been there, done that; that has proven success behind them, either as a smaller, direct-to-consumer developer or publisher, or from one of the larger studios out there."

All of Private Division's games will be "digital first" for PC and console, though Worosz says it will consider physical retail versions for games where that approach makes sense. The issue of pricing - which tends to be more flexible on digital platforms than the $60 retail model that Take-Two generally adheres to - is still being discussed, but that is more a consequence of these projects still being early in development than innate aversion to departing from convention. On that point, barring Kerbal Space Program's next expansion, none of the games signed to Private Division are expected to launch until after March 31st, 2019.

"We have no sense of what our price-points will be yet," says Worosz. "These games are still very much in development. I think we'll have a point-of-view on that as they come to completion, and we get a sense of the duration of those experiences, how they look and feel, how they stack up against the current slate."

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Along with Ancestors, The Outsiders' Project Wight is the other known quantity among Private Division's slate of new IP

This speaks to the kind of relationship Private Division wants to have with its partners. One of the label's unique strengths is access to Take-Two's marketing and sales teams, and those teams can work far more effectively when involved with a project in its earliest stages, crafting a strategy "in lockstep" with the development of the game. When independent developers complain about overcrowding on Steam and other digital storefronts, Worosz says, it's a solid indicator that they've considered their marketing strategy too late in the process.

"I think a lot of the [indie] publishers don't have the wherewithal and the global presence that a much larger publisher like Take Two does. What I mean by that specifically is: having a dedicated sales team. We have arguably one of the best sales teams in the world, both for physical and digital.

"They really are experts at what they do. And, by the way, that's a really expensive piece of overhead that smaller publishers simply can't afford."

The most important aspect of Private Division's strategy, though, is ownership. Kerbal aside, its partners will all retain control of their IP, regardless of how long the working relationship between them and Private Division ultimately lasts. Worosz offers the analogy of the way tennants treat a property when renting it, versus when they actually own the place outright,

"That's exactly how our developers behave; they will be invested in these IPs long-term because it's their own equity. We have long-term publishing deals with these [developers]. If we've done a good job with them, if the game is successful, we'll work with them again - likely on a sequel."

And of those hits do arrive - if, say, Patrice Desilets can turn Ancestors' enigmatic concept into commercial success with Private Division's help - then Worosz can see Take-Two becoming a home and a proving ground for a new wave of developers, creating games that fuse passion and big ideas without compromising on execution.

"[We want] projects that the creator is deeply passionate about - almost by definition," says Worosz. "By virtue of leaving those bigger opportunities, and turning down the larger pay cheque, they're hanging out a shingle in many cases and starting their own studios.

"One of the things that makes this so exciting for me, as a deal guy, is that this is basically venture capital meets video game publishing. In many cases, we work with these studio executives, we help them secure office space, we're consulting with their IP team to build out their infrastructure.

"Our publishing funding is helping to put these studios in business, in some instances. And that's really exciting."
 
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Kyl Von Kull

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This guy is a fucking moron. You can criticize a lot of things about Take-Two, but it's great at making its shareholders money. The stock has more than doubled in the past year. It's gone from $12 to $109 in the last five years. If that makes him a "wannabe gaming CEO" I wonder what the real deal would look like. From a business perspective, Strauss Zelnick knows what he's doing. My guess is that this new studio is really more like a pilot program to test out potential takeover targets.
 
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Infinitron

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IMO giving Ken Levine a blank check to do whatever he wants for years on end is a bigger offense to shareholders than this
 

Kyl Von Kull

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Really? I thought Take-Two made a killing on Bioshock Infinite, so commercially he might deserve the benefit of the doubt (emphasis on commercially). Generally speaking, Take-Two has a much better design philosophy than EA or Activision-Blizzard or Ubisoft. They don’t try to milk their franchises with new titles every year or two, they take their sweet time and get it right (commercially speaking). Besides, even Levine would have trouble making a dent in TTWO’s earnings stream.

That game informer piece has me very excited about Tim and Leonard’s Excellent Adventure. Also a good example of what TTWO does right, even if all their talk of games as a service is really obnoxious.
 

Kyl Von Kull

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Citiation for Bioshock sales? Infinite sold 3.7 million copies in its first quarter, 6 million in its first year, and 11 million by May of 2015 (https://www.google.com/amp/s/www.po...22/why-did-irrational-close-bioshock-infinite). Bioshock 1 & 2 combined had moved 14 million units by May 2015, so very good relative to the rest of the franchise. Not sure about pricing, but they likely weren’t marked down that much, especially not in that first quarter. Nowhere near GTA numbers (what is?) but still pretty damn good.

Even if the totally unconfirmed reports that it cost $200 million between marketing and development, which Levine denies ($100 million on marketing might be credible, but $100 mil on development sounds pretty steep—that’s a material amount of money that TTWO would’ve had to break out in its earnings reports or conference calls. They were developing GTA 5 over roughly the same five years and I doubt they had the capital to blow on two $200 million games).... But let’s go with $200 million in costs.

So let’s see: 3.7 million units were sold in the first quarter it was out—gotta be mostly full price. 3.7MM x $59.99 = $221 million. So they were in the black within a few months, assuming the $200 million number is even true. If the other 7.3 million units from the first two years were sold at half price (a conservative assumption), that’s another $218 million. So $439 mil in the first two years at a minimum. Can’t find sales figures for 2016 or 2017, but that’s all just gravy. And this is almost certainly a lowball number, one that doesn’t include any DLC. They owned Irrational so royalties are not an issue. That’s a lot of money for TTWO—a nice ~125% pretax return (at a minimum!) good even for a game that took five years to make.

So yeah, Levine’s worth it. Also, presumably Take-Two now has him on a tighter leash—we know he has a much smaller team these days. Just being able to say the next game is from the creator of Bioshock could be worth 2 or 3 million units.

Stauss Zelnick knows what he’s doing.
 

Tigranes

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One suspects that given Take Two's wider revenue streams, this is a venture that they don't expect to become their primary cash cow or their sword to die on. They might calculate that it's a nice place to diversify on and build brand, Obsidian is probably the 'safest' bet to make in this area despite commercial debacles like Alpha Protocol out of the companies that are available for this kind of contracting, and if they're really lucky they land a half-Skyrim on one of these bets.
 

Kyl Von Kull

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One suspects that given Take Two's wider revenue streams, this is a venture that they don't expect to become their primary cash cow or their sword to die on. They might calculate that it's a nice place to diversify on and build brand, Obsidian is probably the 'safest' bet to make in this area despite commercial debacles like Alpha Protocol out of the companies that are available for this kind of contracting, and if they're really lucky they land a half-Skyrim on one of these bets.

Yeah this is peanuts to them. Zelnick goes on CNBC whenever something meaningful happens and this did not rate a tv appearance. I agree that it’s a cheap way to maybe build a decent franchise or two, but since the developers get to keep the IP, I think that these deals are more like tryouts as they look for new studios to buy.
 

Infinitron

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Seems likely all of these games are being partly self-funded by their developers, so it's not like all the risk is on PD's side.
 

passerby

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Citiation for Bioshock sales? Infinite sold 3.7 million copies in its first quarter, 6 million in its first year, and 11 million by May of 2015 (https://www.google.com/amp/s/www.po...22/why-did-irrational-close-bioshock-infinite). Bioshock 1 & 2 combined had moved 14 million units by May 2015, so very good relative to the rest of the franchise. Not sure about pricing, but they likely weren’t marked down that much, especially not in that first quarter. Nowhere near GTA numbers (what is?) but still pretty damn good.

Even if the totally unconfirmed reports that it cost $200 million between marketing and development, which Levine denies ($100 million on marketing might be credible, but $100 mil on development sounds pretty steep—that’s a material amount of money that TTWO would’ve had to break out in its earnings reports or conference calls. They were developing GTA 5 over roughly the same five years and I doubt they had the capital to blow on two $200 million games).... But let’s go with $200 million in costs.

So let’s see: 3.7 million units were sold in the first quarter it was out—gotta be mostly full price. 3.7MM x $59.99 = $221 million. So they were in the black within a few months, assuming the $200 million number is even true. If the other 7.3 million units from the first two years were sold at half price (a conservative assumption), that’s another $218 million. So $439 mil in the first two years at a minimum. Can’t find sales figures for 2016 or 2017, but that’s all just gravy. And this is almost certainly a lowball number, one that doesn’t include any DLC. They owned Irrational so royalties are not an issue. That’s a lot of money for TTWO—a nice ~125% pretax return (at a minimum!) good even for a game that took five years to make.

So yeah, Levine’s worth it. Also, presumably Take-Two now has him on a tighter leash—we know he has a much smaller team these days. Just being able to say the next game is from the creator of Bioshock could be worth 2 or 3 million units.

Stauss Zelnick knows what he’s doing.

Distributors cut, platform fees, sales taxes, payment processing, etc. takes at least 40%, so multiply your result by 0,6 to get more accurate estimation of T2 income.
It results in 30% profit in a span of 4-5 years ( half of production time and two years of sales )
 

vonAchdorf

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Indie games as a whole are no different than other entertainment media - from an investment perspective they are sustained by blockbuster hits. This is well suited for investing in a portfolio of games / developers and VC.
We aren't talking about solo devs or mom-and-pop studios here as investment objects of PD.
 

Kyl Von Kull

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Citiation for Bioshock sales? Infinite sold 3.7 million copies in its first quarter, 6 million in its first year, and 11 million by May of 2015 (https://www.google.com/amp/s/www.po...22/why-did-irrational-close-bioshock-infinite). Bioshock 1 & 2 combined had moved 14 million units by May 2015, so very good relative to the rest of the franchise. Not sure about pricing, but they likely weren’t marked down that much, especially not in that first quarter. Nowhere near GTA numbers (what is?) but still pretty damn good.

Even if the totally unconfirmed reports that it cost $200 million between marketing and development, which Levine denies ($100 million on marketing might be credible, but $100 mil on development sounds pretty steep—that’s a material amount of money that TTWO would’ve had to break out in its earnings reports or conference calls. They were developing GTA 5 over roughly the same five years and I doubt they had the capital to blow on two $200 million games).... But let’s go with $200 million in costs.

So let’s see: 3.7 million units were sold in the first quarter it was out—gotta be mostly full price. 3.7MM x $59.99 = $221 million. So they were in the black within a few months, assuming the $200 million number is even true. If the other 7.3 million units from the first two years were sold at half price (a conservative assumption), that’s another $218 million. So $439 mil in the first two years at a minimum. Can’t find sales figures for 2016 or 2017, but that’s all just gravy. And this is almost certainly a lowball number, one that doesn’t include any DLC. They owned Irrational so royalties are not an issue. That’s a lot of money for TTWO—a nice ~125% pretax return (at a minimum!) good even for a game that took five years to make.

So yeah, Levine’s worth it. Also, presumably Take-Two now has him on a tighter leash—we know he has a much smaller team these days. Just being able to say the next game is from the creator of Bioshock could be worth 2 or 3 million units.

Stauss Zelnick knows what he’s doing.

Distributors cut, platform fees, sales taxes, payment processing, etc. takes at least 40%, so multiply your result by 0,6 to get more accurate estimation of T2 income.
It results in 30% profit in a span of 4-5 years ( half of production time and two years of sales )

TTWO's cost of goods sold for 2013 was exactly 40% of revenue, so that's good eyeballing. But that 40% counts development costs, although it doesn't count some marketing, so let's call it even since development and marketing tend to be roughly equal. (10Ks and 10Qs are here: http://ir.take2games.com/phoenix.zhtml?c=86428&p=quarterlyearnings)

So, yeah, using the most negative assumptions, they got a very modest 6% annual return. But that presumes Infinite was the most expensive single player game of all time (until GTA 5 came out later that year), which is hard to believe, and that it had a bigger marketing budget than GTA 5--also hard to believe. My argument is that even if Infinite's development was a clusterfuck of earth shattering proportions, they still made money on it. If the 7.3 million units they moved between the end of the first quarter post release and May 2015 were only an average of 25% off--more realistic--then they made $328 million on that chunk, so we're talking around $550 million total by May 2015. Keep the absurd $200 million in development/marketing costs, subtract the 40%, TTWO gets a 105% return, or 21% annualized over five years--pretty good. I can't find numbers for DLC/season pass sales, but the DLC was much cheaper to make so that's presumably a good bit more.

Use the original pricing estimates and assume it only cost $150 million to make and market, you get a 38% annualized return, which is excellent.

Lowball it, they made money; use less conservative numbers, they made a lot of money.
 

Turjan

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Citiation for Bioshock sales? Infinite sold 3.7 million copies in its first quarter, 6 million in its first year, and 11 million by May of 2015. Not sure about pricing, but they likely weren’t marked down that much, especially not in that first quarter.
I have that game from when it was given away for free. i don't remember how long after the release that was (definitely not in the first quarter).
 

LESS T_T

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A couple more interviews from last month.

"Take-Two’s Private Division: ‘Triple-I’ indie ambitions ‘eclipse crowdfunding’": http://www.mcvuk.com/articles/publishing/private-division-is-a-very-smart-move-for-take-two

About the thing Feargus has been talked about Fig (and also Larian as a successful example of self-publishing developer):

“I think it’s a testament to the passionate and experienced team we’ve built at Private Division, and the beliefs we hold as a label. We put the developer first and empower them to create the games they are passionate about creating, and allow them to operate with creative control of their IP. When you combine this with the backing and support of the global Take-Two organization, I think we present a great publishing option for these incredibly talented independent developers.”

With crowdfunding having certainly reached the end of its ‘golden age’ with both consumers and developers being more wary, it looks like Private Division is well positioned as a more robust alternative to the 'self-publishing' dream.

“I can’t speak for every studio out there, but in the cases of teams we’ve partnered with, I believe their ambitions eclipse what they could otherwise raise from crowdfunding platforms. That said, there are many examples of teams which have become quite successful in true ‘self-publishing’. Larian Studios, Playdead, Capybara, and Red Hook Studios are just a few that come to mind across the spectrum of great indie studios.”

Distancing themselves from games-as-a-service:

He’s also mindful of the increasing competition for consumers’ time: “In a world of ‘always-on’ connected entertainment, consumers have myriad ways to spend their free time. If we can deliver high-quality, immersive experiences which, at the end of the day, might wrap someone up for ten to fifteen hours instead of fifty plus, then we’re hopeful we’ve made good on our promise.”

That’s a refreshing note from a big publisher, suggesting more traditional gaming fare, and presumably linear games, rather than just the open-ended, games-as-a-service template.

Origin of the name:

It’s already been a long journey to get this point of course, now accompanied by the usual relief following a long period of secrecy, which is where the name for the label started its genesis: “When we first started the group, we referred to ourselves as ‘Secret Division’ in the spirit of Lockheed’s ‘Skunkworks’ or the Wayne Enterprises Special Projects Division, as we were working on something new and still very much on the down-low.”

“Private comes from ‘Privateer’, which fits well with the independent developers we’re working with. Private Division is a variation on this theme while retaining this legacy, so we went with it. The logo includes a diamond, which connotes quality and craftsmanship, two attributes we’d consider as our north star.”


"Why Grand Theft Auto giant Take-Two is getting into indie publishing with Private Division": http://www.pcgamesinsider.biz/inter...-into-indie-publishing-with-private-division/

Who retains IP with Private Division projects?
With the exception of Kerbal Space Program, which we acquired earlier this year, our studio partners own the underlying IP, and we have long-term rights to develop sequels against these IPs.
 

LESS T_T

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Private Division's QA team:



Turns out, Patrice Desilets and his team was at E3 for some reason.



 

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For a self-styled "independent" label, perhaps PAX West makes more sense than E3 as a venue to announce its games?
 
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Kyl Von Kull

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For a self-styled "independent" label, perhaps PAX West makes more sense than E3 as a venue to announce its games?

If it's open world TTWO might not want to announce until after Red Dead 2 comes out to avoid stepping on their own feet. I think that also roughly coincides with the last deadfire DLC.
 

LESS T_T

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Not directly related to Private Division, but this interview shows one of motivations behind it: https://variety.com/2018/gaming/news/2k-games-david-ismailer-1202852683/

2K Looks to Double Gaming Portfolio Over Next Five Years

Made up of a half-dozen studios responsible for games like “BioShock 2,” “Civilization,” and “Mafia III,” 2K Games is looking to grow significantly by 2023, 2K president David Ismailer told Variety.

“Our aspiration is to double our size in five years,” he said. And they seem to be in a position to do that.

Parent company Take-Two Interactive is the publisher behind “Grand Theft Auto V,” which sold about 95 million copies and continues to bring in a steady stream of cash four years after its release. Take-Two has been slowly investing some of that cash in acquisitions. Last year, they company snagged “Kerbal Space Program,” and then launched a new publishing label, Private Division. The company also founded Ghost Story Games last year.

Ismailer said Take-Two has put a lot of trust in 2K to grow and expand its portfolio and that the company is looking to 2K to essentially, wisely invest some of its profits. With that in mind, Ismailer said 2K has three priorities right now: grow its portfolio, create more content, and find a way to keep the gamers the company attracts inside its games.

“I think of games as an amusement park,” Ismailer said. “The more rides there are, the more people come and the longer they stay.”

He added that when he took over leadership of 2K last year, his focus became to empower studios through more resources, a better infrastructure, and creative freedom to publish their games. More games could mean tapping into the company’s many untouched IP, creating entirely new games, or expanding on games that have already seen some success.

“We have our eyes on a lot of things,” he said.

Take-Two’s appearance on the E3 showfloor this year is an accidental metaphor for the current state of the company. The booth was massive, decked out to look like a standing, luxurious office with a glassed in waiting room, massive video screens to recreate a view of the beach through faux windows and the sky, complete with a sunset and the occasional birds. But the company had no games to show at E3, at least not in its elaborate booth. It was an infrastructure in need of more content.

The booth did have another, more sensible purpose though: as a place to host meetings with potential developers, partners, perhaps even acquisition targets.

While 2K is absolutely in need of more games to put under development, Ismailer said they don’t want to force any of their existing studios, like “Civilization” and “XCOM” creator Firaxis, to do something they’re not interested in.

“Whatever they are passionate about doing” is what Firaxis will work on next, he said. “We can’t guide the creatives to do something. It’s really difficult to manage very large teams. It’s even more difficult if they’re not passionate about the project they are working on.”

Ismailer also declined to say what Hangar 13, the relatively new studio that developed “Mafia III” in 2016, is working on other than to say that it’s something “incredibly exciting” and that it is an entirely new IP.

“They did ‘Mafia III’ and we were very happy with the results and then they moved on to some other project,” he said.

Take-Two Chairman and CEO Strauss Zelnick essentially said the same thing to Varietyduring E3.

“We are generally focused on encouraging our creative teams to pursue their passions and make the extraordinary art that they can make today in the form of video games,” he said.

Ismailer said his team is looking at all kinds of “quality content.”

“We are open for business,” he said. “We are looking to grow and we look at a lot of pitches per year.”
 

vonAchdorf

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Ismailer also declined to say what Hangar 13, the relatively new studio that developed “Mafia III” in 2016, is working on other than to say that it’s something “incredibly exciting” and that it is an entirely new IP.

“They did ‘Mafia III’ and we were very happy with the results and then they moved on to some other project,” he said.

Weren't the sales numbers abysmal? They discounted it heavily quite shortly after release.
 

Outlander

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Ismailer also declined to say what Hangar 13, the relatively new studio that developed “Mafia III” in 2016, is working on other than to say that it’s something “incredibly exciting” and that it is an entirely new IP.

“They did ‘Mafia III’ and we were very happy with the results and then they moved on to some other project,” he said.

Weren't the sales numbers abysmal? They discounted it heavily quite shortly after release.

I think sale numbers were quite good actually, it's just that the project's development was a total clusterfuck, so 2K needed over 8 million units sold just to break even :lol:
 

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