IndustryGamers - Informing the Games Industry

Red Dead Redemption Needs to Sell 4 Million Copies to Break Even, says Analyst

Posted June 4, 2010 by James Brightman

Rockstar Games called Red Dead Redemption its "most ambitious game to date" prior to the title's release, and it's starting to look like the game may live up to that billing. Reviews have been phenomenal (a Metacritic of 95) and sales seem to be exceeding expectations. GameStop recently noted that the game has been outperforming at its stores, and now analysts are revising projections to reflect the demand for Red Dead.

Mike Hickey of Janco Partners has increased his forecast from 2.0 million to 3.6 million units sold during Take-Two's Q3, "as the game is considered high quality, initial sell through has proven exceptional and its Wild West theme is proving acceptable to international gamers." Furthermore, he said that the game's "development expense exceeded +$70 million, suggesting a 4.0 million unit ship break-even estimate."

Additionally, Todd Greenwald of Signal Hill Capital Group noted that Red Dead Redemption is "killing it" at retail. "On the heels of a large marketing campaign and impressive critical acclaim... Red Dead is selling extremely well, and should lead to Q3 guidance above consensus. We believe management originally budgeted Red Dead to ship 1-2M units during the quarter, but is now seeing demand for at least 2-3M units.  As a result, many retailers were quickly left out of stock, which is now driving robust re-orders. As a result, we think Take-Two could see sales of 3M units in the July quarter, and as much as 4-5M units by the end of the year. We are raising our Q3 estimates to reflect 3M units, up from 2M units," he said.

It may not be GTA, but it's sure making Take-Two look good in a non-GTA fiscal year, which is good news for the publisher that's often been criticized for being overly reliant on GTA to boost its bottom line.

James Brightman has been covering the games industry since 2003 and has been an avid gamer ever since the days of Atari and Intellivision. He was previously the EIC of GameDaily Biz.