XBOX-HQ.COM - Halo 3 Harbinger of GTA IV Sales?

One analyst believes the success of Halo 3 shows that the market is underestimating potential sales of Grand Theft Auto IV.

With $300 million in sales in its first week, Halo 3 is living up to the market hype (and giant marketing campaign).

But there’s another juggernaut looming: Take-Two and Rockstar’s GTA IV. Could the success of Master Chief’s latest shoot-up be an indication of the potential sales from the latest entry in Rockstar’s iconic franchise?

Analyst Mike Hickey with Janco Partners thinks so.

“We expect all of the ... Halo 3 success drivers should also benefit the upcoming GTA IV release,” he said in a note to investors today.

These “success drivers,” according to Hickey, include an “accelerating and rabid fan base, a current market thirst for compelling high quality content and this iteration’s early cycle release.”

The much-publicized delay of GTA IV from October to Take-Two’s fiscal Q2 2008, which ends in April, still has some wondering whether or not the game will miss the boat known as “holiday sales.” Hickey argues against that theory, saying, “Halo 3’s initial retail success was in a non-holiday release period, which could mitigate some investors' concern over GTA IV’s non-seasonal release period.”

He estimates that GTA IV, which is slated for PS3 and Xbox 360, will ship 4.1 million units in its first week, reflecting a 20 percent attach rate. Originally, he expected the game to ship 4.5 million during the entire fiscal quarter. This is compared to his estimated week-one Halo 3 shipment estimate of 5.2 million, a game with an astonishing estimated US/European attach rate of 46 percent.

Hickey added, “After the success of Halo 3, it’s very difficult for us to conceive a more conservative initial ship projection for GTA IV, and believe there is a strong opportunity for considerable upside to our initial GTA IV ship projections for both fiscal Q2 '08 and their fiscal ’08 year.”

Hickey speculated on attach rates that are higher than the conservatively proposed 20 percent GTA IV rate. A 30 percent attach rate could bring 6.2 million in GTA IV units sales in its opening week. A Halo 3-like attach rate of 46 percent would see week-one shipments of 9.5 million units, generating about $466 million in sales for Take-Two.

“Higher than anticipated sales of [Take-Two's] GTA IV game should have a profound impact on their financial performance relative to our initial projections,” he added.

Hickey has a "buy" rating for the publisher, whose shares closed yesterday at $17.98.

News-Source: http://www.next-gen.biz