Take Two's Fifty Million Dollar Hat

Moneyhats. The phrase is frequently thrown around in gaming circles when it comes to exclusivity deals; the origin is a Penny Arcade strip from October of 2000:

These sorts of deals are becoming more and more commonplace, and this week has had a whopper of one: Take Two announced that the "episodic content" for GTAIV will be exclusive to the Xbox 360.

Never keep Occam's Razor far from you. As GAF user sangreal discovered in a transcript of the recent Take Two earnings call, the simplest solution still is the most worthwhile one:

Evan Wilson - Pacific Crest Securities

Thank you. And as it relates to the deferred revenue chunk associated with the episodic content on X-Box 360, you can see that $25 million of that moved into short-term deferred. Could you give us any sense of when that's going to hit the P&L? Will we see $25 million at one time and then the second 25 or will it be a slow bleed?

Lainie Goldstein - Chief Financial Officer, Take Two

The first 25 is for the first episodic content package that's supposed to go out and that is in March of '08. That's why it moved into current because it's in the next 12 months. The second 25 will be for the second episodic, the episode, and that will be later in fiscal '08.

Repeat: These two exclusive content packs cost Microsoft a combined $50,000,000 to secure.

I am obviously in the wrong business.