Take Two Intrigues With 'L.A. Noire'

NEW YORK (TheStreet) -- Take Two Interactive (TTWO) introduced its edgy L.A. Noire title last week at an unusual venue for a video game: the Tribeca Film Festival, a 10-year old exclusive event co-founded by Robert De Niro known for top-tier celebrity sightings and a wild mix of alternative, documentary and feature films.

The first video game ever to debut at the festival, L.A. Noire marks a risky departure for Take Two, the publisher of huge-selling games like the Grand Theft Auto franchise.

The new game's focus on investigations and mystery-solving might bore core gamers used to titles centered around fast-paced shootings and stabbings, and few titles outside this action-oriented genre have succeeded, with the exception of sports games and brands like Super Mario, say analysts.
Rockstar Games' L.A. Noire title

But for Take Two, L.A. Noire is all about appealing to an audience outside of hardcore gamers, an effort to continue its sales and stock growth momentum in an industry that is experiencing a dramatic shift away from software sales driven primarily by brick-and-mortar stores.

"Whether or not this game is for everyone we don't know, but we do know that if its drive-somewhere-and-shoot-someone, it's not interesting," said Rob Nelson, art director at Rockstar Games, the Take Two subsidiary responsible for L.A. Noire.

L.A. Noire lets users skip action sequences that require more advanced gaming skills, like car chases with suspects, to appeal to new customers -- like film buffs -- who Rockstar hopes are drawn into the game's narrative and cinematic effects rather than its gameplay.

Unlike past Rockstar hits where players race cars and shoot other characters in an open "sandbox" type world, L.A. Noire is a more linear, cerebral game with an emphasis on a story line and no multiplayer option.

Inspired by noir classics like Chinatown and L.A. Confidential, the game, due out later this month, takes place in 1940s Hollywood and centers around the investigations of a young detective named Cole Phelps. The game's story lines -- or cases -- are based on real-life Los Angeles crime stories; one of them, "Red Lipstick Murder" is mirrored on a 1947 homicide investigation of the murder of Jeanne French, a veteran Army Nurse.

L.A. Noire features the voices and facial features of actors like Mad Men's Aaron Staton, five years of development, more than 400 characters and a script of more than 2,200 pages.

"It's easy to sit and watch the game and not know what's interactive and what's not," said Simon Ramsey, international marketing director of Rockstar, referring to separating gameplay from storyline.

To this point, some analysts say that Take Two is taking a big gamble.

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

"If the game has any fault, it's that it's too intellectual," said Mike Hickey, an analyst with Janco Partners.

Analysts expect Take Two to sell 4 million to 5 million units of L.A. Noire -- those are solid numbers, but far less than the 8 million copies of the firm's western epic Red Dead Redemption that sold last year.

Take Two is taking its new-genre bet as it enjoys a good stock run; its shares are up 32% year-to-date, partly due to the success of two games, last year's Red Dead Redemption and NBA2K11.

Sales of both titles helped the firm regain profitability in its most recent fiscal year; revenue grew 65% to $1.16 billion in 2010. Take Two, based in New York, reports its fiscal fourth-quarter earnings Tuesday, May 24.

Whether or not the game is a success, however, it's a breath of fresh air in an industry that's suffered from stale content and too many franchises, said David Cole, an analyst with interactive entertainment research firm DFC Intelligence.

"The safe way to play it would be to do another version of Grand Theft Auto, because trying to launch a new franchise is always risky," he said. "It's always refreshing to see new stuff, but in today's market it seems pretty rare where you're always counting the numbers after a title."

Game Makers' Experimentation

Besides Take Two, other video game publishers have been forced to come up with new ways to innovate and capture customer's attention as they turn to cheaper alternatives on smartphones and social networks like Facebook.

New game sales in March dropped 15% to $790.9 million from $928.3 million during the same time last year, according to industry tracker NPD Group.

Several video game companies are developing a strategy based on so-called transmedia storytelling, in which a game is used as a hub and subsequent parts of the narrative are told across different entertainment platforms.

THQ ( THQI), for example, announced a partnership earlier this month with publisher Random House to create original works like games, novels and digital books.

The firm has also teamed up with the SyFy channel to air a film this month that serves as a prequel to its Red Faction Armageddon game.

"Creatively, none of these things are adaptions ... they're elements of the story anchored by the game that's translated from one universe to another," said Danny Bilson, executive vice president for core games at THQ.

Electronic Arts ( ERTS), meanwhile, has used a transmedia strategy with its Mass Effect franchise, including a direct-to-video anime film, novels and comics.

For Take Two, the future of the industry lies less in fusing together film and video games than creating a truly unique experience for users.

"We're trying to make games that feel immersive and cinematic," said Rockstar's Ramsey. "We're not trying to make just an interactive movie."

Take Two's shares closed down 8 cents Monday at $16.10.

--Written by Olivia Oran in New York.

>To follow the writer on Twitter, go to http://twitter.com/Ozoran.

>To submit a news tip, send an email to: tips@thestreet.com.

More from Technology

Elon Musk's Latest Twitter Tirade Is the Dumbest Thing on Wall Street

Elon Musk's Latest Twitter Tirade Is the Dumbest Thing on Wall Street

Flashback Friday: Amazon, Chip Stocks, Memorial Day

Flashback Friday: Amazon, Chip Stocks, Memorial Day

Some Companies Are Already Feeling the Effect of GDPR

Some Companies Are Already Feeling the Effect of GDPR

Experts Break Down GDPR Risks for Investors

Experts Break Down GDPR Risks for Investors

Netflix Ready to Surpass Disney as America's Most Valuable Media Company

Netflix Ready to Surpass Disney as America's Most Valuable Media Company