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TheStreet Open House

Take-Two Not In Football Shape

SAN FRANCISCO -- Few on the Street thought video-game publisher Take-Two's (TTWO) bleeding sports business was a good idea. The fate of its latest football game, All-Pro Football 2K8, proves the point.

Take-Two's sports division, 2K Sports, which also makes hockey and baseball games, is not expected to be profitable until 2008, the company says. But lackluster sales of All-Pro Football 2K8 and attempts to stick with the series are likely to only mean more affliction.

One analyst estimates that only 500,000 copies of that game will be shipped to stores by Oct. 31, the end of Take-Two's fiscal year 2007. Over the game's lifetime, Take-Two could ship about 733,000 copies, says Jesse Divnich, an analyst with The simExchange, an online site that aims to act as a video games prediction market.

Compare that with more than 5 million copies sold at the end of 2006 of Electronic Arts' (ERTS) Madden NFL 07, the industry leader. Sales of the Madden NFL 08 game, released this week, are expected to be even higher.

Though Take-Two had hoped to turn All-Pro Football into a franchise that could take on the Madden juggernaut, so far, its efforts haven't paid off. The company, says Divnich, would be better off pulling the plug on its next football game.

By Divnich's estimates, Take-Two could earn between $28 million and $35 million on All-Pro Football 2K8 -- barely enough to cover the production and marketing costs.

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