The video-gaming industry has evolved greatly from its Atari heyday to its Blu-ray and full-body gaming present. Video games have become a global industry that’s raked in $56 billion in 2010 and is growing by nearly 9 percent a year, according to a recent report in The Economist. Also, the average age of a video gamer is 37 and 42 percent of those gamers are women, according to the Entertainment Software Association. Seventy-two percent of all households in the U.S. play video games.
Take-Two’s numbers were also strong. The company posted a net revenue of $236.3 million in the third quarter of fiscal 2012, a drop from the $334.3 million it posted in the same quarter in fiscal 2011.
Eleven percent of its net revenue was driven by “digitally delivered content,” like game apps for Grand Theft Auto III for iPhone and Android handheld devices. Take-Two has so far posted a $677.7 million profit this year, compared to $954.6 million the same time last year.
In short, the industry is lucrative enough to make the average commercial real estate broker wish she had studied computer programing.
But in the negotiations, the size and scope of the video-game industry mattered little to Yuco and its Newmark Knight Frank team.
“There came a time where we were clear that we had no fear of losing them,” said Mr. Cohen. “I can say that was the game changer. I think they liked to tell us they were prepared to move when I believe they were hard pressed to find a building that would allow them to ride to work on their bikes with their dogs.”
Yuco Management would eventually come to the realization that keeping Take-Two as a tenant made more sense.
In January, both sides agreed to a new 10-year deal for six floors sized at 69,000 square feet. The asking rent was $47 per square foot.
As part of its deal, Take-Two will receive some “cosmetic enhancements,” including exterior signage for Take-Two and a redesign of the building’s lobby.
But Mr. Cohen blanched at a comment made by Mr. Stevens in a recent Crain’s New York report stating that Take-Two will be paying lower rent than it did when it first moved into the building in 2002.
“They got value,” he said, without elaborating on the exact costs. “The most important thing is that the landlord made certain concessions, but he didn’t take it on the nose.”