Imagine key business decisions being forged not in sterile boardrooms, but amidst the clinking of glasses in a cozy London pub, over a glass of wine at a lavish West Hollywood hotel, or through a hushed phone call outside a Chinese restaurant in Windsor, England.
These were the unconventional settings where the fate of the PlayStation 2—Sony’s monumental console now celebrating its 25th anniversary in North America—was significantly shaped. These distant locales, thousands of miles from Sony’s Tokyo headquarters, played host to the groundbreaking deal that brought a trilogy of Grand Theft Auto titles – GTA III, Vice City, and San Andreas – exclusively to the PS2 before any other platform.
It’s no secret that the PlayStation 2 became the best-selling console of all time for many reasons: its vast game library, its early lead over the Xbox, a timely mid-life price cut, and its affordability as a DVD player. However, the exclusive launch of these three GTA blockbusters was absolutely critical. They rank among the PS2’s top six best-sellers, with many players purchasing the console solely to experience these games. If you didn’t own a PS2, you likely knew someone who did and spent hours at their house.
Chris Deering, then-president of Sony Computer Entertainment Europe, estimates this landmark deal boosted European console sales by a significant 20 percent.
While snippets of this deal and the crucial Sunset Marquis meeting have surfaced over the years, new insights from four individuals directly involved now paint a more detailed picture. Their revelations expose previously unknown twists in negotiations: how Sony nearly lost out on US exclusivity, the financial benefits Take-Two received (including upfront cash and production cost discounts), and the potential disruption Microsoft could have caused.
Initially, the original 2D, top-down GTA games achieved decent sales but received only mediocre reviews. Deering’s interest in GTA III was sparked by a casual conversation.
“We used to have these company pub nights,” he recalls. “It gave me a chance to deal with people I would never talk to and ask them some dumb questions.”
During one such evening, he posed a ‘dumb question’ to the astute Sarah Thompson, who managed a Sony team evaluating third-party games. “I said: ‘You seen anything?’ She said: ‘Yeah, GTA is looking really cool.’ It put it at the back of my mind.”
It was actually a contractor, Andy Macoy, who first highlighted an impressive GTA III test build. This insight, noted by Deering, placed the game on Sony’s shortlist for potential exclusives at E3 2000, according to Zeno Colaço, who was then vice-president of publisher and developer relations at SCEE and Thompson’s superior.
Deering headed to Los Angeles that June, keenly aware that securing exclusives was vital for Sony to win a second consecutive console generation. Microsoft’s Xbox, with Bill Gates having unveiled a prototype in March, loomed large on the horizon.
“They get a billion dollars a year from Windows licenses. They can do anything they want – they just have to want,” he states. “How do we get out ahead of this? That was in the back of my mind. I didn’t want them to come in and take away the chance of getting two console generations in a row. It was almost like a personal, I don’t want to say vendetta, but it could have rained on my parade. So that was a hidden motivation.”
Sony needed it more than we did.
Deering and David Reeves, then SCEE’s head of marketing (and later Deering’s successor as president), convened with various publishers at a villa within the exclusive Sunset Marquis hotel. Take-Two, the parent company of Rockstar Games, was among them.
Each attendee offers a slightly different recollection of the meeting. Non-disclosure agreements shield some specific details, and the passage of 25 years has naturally blurred memories. The exact division between in-room negotiations and subsequent phone calls remains unclear.
However, we know at least six individuals were present. Representing Take-Two were Kelly Sumner, who oversaw the company’s operations outside the USA and would become CEO in 2001, and Gary Lewis, then COO and later president of international. From Sony’s side, there were Deering, Reeves, Colaço, John Brunning from the legal team, and potentially Jim Ryan, who would later lead Sony’s gaming division.
Colaço claims Sumner initiated the meeting “to complain that another one of Take-Two’s games was getting a knock back from our content group”—the very same group that had identified GTA III as a potential hit. He speculates this unapproved game might have been State of Emergency, which Sony deemed “gratuitously violent.”
“Anyway, we listened to their complaints,” Colaço says. “I explained our position and thoughts of what adjustments might be an acceptable compromise.” Then, “to smooth the meeting over and throw them a bone, we asked them whether we could do an exclusivity deal on GTA and another game, with the background knowledge that GTA was doing something original.”
Sumner, however, disputes this account. “I’m not saying we were happy about the approval process” for games, he clarifies, but insists any such discussion was not connected “in any way at all” to the GTA deal. He argues that exclusivity would never have been offered as a “sweetener” for Take-Two, emphasizing that “Sony needed [it] more than we did.” (It’s worth noting that Deering planned to raise exclusivity anyway, and Lewis from Take-Two also doesn’t recall Colaço’s specific description).
Regardless, the initial offer, according to Colaço, centered on “co-marketing” for GTA III. Essentially, Sony would match $1 million of Take-Two’s marketing investment. A similar deal was proposed for another Rockstar game, though its identity remains unremembered.
The deal included at least two other crucial elements, likely negotiated after the initial E3 meeting, primarily between Deering and Sumner in the UK. First, a significant upfront cash payment. Second, what Sumner refers to as a “reduction on production costs.”
“In those days, production costs were really, really expensive,” he elaborates. “Basically for the right to buy a disc and have it packaged and delivered to your warehouse, I think in around 2000 is about $11 per disc… And when you’re selling millions and millions of discs, which hopefully we were, any reduction on that is very nice, thank you very much.”
Sumner remains tight-lipped about the exact discount, but Deering estimates it was “in the neighborhood of a couple of pounds a unit, maybe $3.”
With GTA III eventually selling 8.5 million copies on PS2, a $3 per unit discount could have translated into over $25 million in potential savings for Take-Two and Rockstar.
Take-Two also secured incentives that allowed Sony to sell exclusive software bundles featuring GTA, Colaço reveals. Regarding the upfront cash, Sumner remembers Sony agreeing to pay a “significant amount of money”—a welcome infusion for Take-Two, which hadn’t yet achieved its current multi-billion dollar status. “Any millions that were coming in were gratefully received at that stage,” he notes.
We were keen to get into bed with Sony.
Neither party describes the negotiations as particularly arduous. “It wasn’t like the United Nations, it was more, ‘Would you like another glass of wine?’” Deering recollects. “It wasn’t intense.”
“There’s very few formal meetings with Chris [Deering],” Sumner adds, underscoring the informal nature of their rapport.
It would be a mistake to assume this deal was solely driven by finances. Conversations with all parties reveal a strong personal chemistry, mutual respect, and a shared vision for the future of gaming.
Deering championed the inclusion of more “mature” games on PS2 to broaden the console’s appeal to adult audiences—a niche perfectly filled by Rockstar. Take-Two, in turn, recognized that the PS2’s hardware capabilities could fully realize Rockstar’s ambitious creative designs. Furthermore, knowing Rockstar’s games were often edgy and provocative, they sought a partner who would understand and trust their creative direction without interference. Sony, with its experience managing high-profile artists like Mariah Carey, proved to be an ideal match, according to Take-Two’s Lewis.
“So we were keen to get into bed, so to speak, with and work alongside Sony. And interestingly enough, they felt the same,” Lewis explains. “You sit down sometimes, if you’re lucky to do so, with certain people in a room and you realize, okay, we’re comfortable with this deal… we knew we could work with them.”
“Everyone knew what they wanted from it,” Sumner emphasizes. Sony was “massively supportive… and we just absolutely believed in what they were going to deliver.”
However, Sumner couldn’t finalize the deal independently. He required the approval of his CEO and, crucially, Rockstar. The decision to forgo the Xbox and commit to the PS2 platform felt like a “massive, massive bet.” “It had to be a team decision… but Sam [Houser] and the guys were like, ‘Well, if we want to deliver what we really want to deliver, we can’t keep on PS1. And it has to be PS2.’”
The console exclusivity deal for GTA III, granting PlayStation a two-year lead, was cemented during an evening phone call. “I was standing outside a Chinese restaurant in Windsor and doing the final negotiation,” Sumner recounts. “The deal was done at eight or nine o’clock at night, out in the dark, in Windsor.”
Looking back, was it a fair deal? In a 2013 interview, David Reeves famously described it as “remarkably cheap.” Sumner playfully chuckles at this assessment.
“I think that’s in hindsight, either that or he’s the best poker player in the world. He certainly squeaked a bit when we did the deal,” Sumner says.
“We were very, very happy at the time. And I think Sony were very happy as well. Yes, it was cheap from what we now know… I wish I could go back in time and renegotiate it and get a few more quid,” he adds with another chuckle. “[But] also, it was more beneficial for Take-Two and Rockstar than we thought it was going to be. So everyone won.”
Deering, for his part, maintains that it wasn’t cheap at the time, arguing it aligned with other exclusivity deals, including securing Tomb Raider for the PS1. The deal’s purpose, he explains, was to “make up what they would’ve made by having the other versions.”
But this wasn’t the final chapter of the saga.
There were conversations about doing something with Xbox. But that just didn’t seem right.
This initial deal only secured exclusivity in Europe. In the United States, Sony was “not as massively supportive” of the arrangement, Sumner recalls. Consequently, GTA III could theoretically have launched in October 2001 as a PS2 exclusive solely in Europe, potentially allowing for an Xbox release in the US much earlier than its eventual November 2003 debut.
The US team “were ambivalent at first,” Deering states. “I don’t think they were focusing on the franchise, and hadn’t had that same tip from their third party team on the rumored power of the game.
“Then word got out around the industry that this is going to be a good game,” he continues. “And finally, I think at the very last minute, the US came in and joined on. ‘Can we hitchhike on this deal?’” He suggests their participation was “reluctant.”
Colaço even posits that Sony Computer Entertainment America (SCEA) might have only fully committed after GTA III’s initial release. SCEA “only really got on board when they saw GTA’s sales impact and the relationship we had established with Take-Two flourishing,” he says.
As the Xbox’s launch approached, the partnership between Sony and Take-Two faced another test.
Microsoft had previously revealed that, in 2001, it rejected Rockstar’s pitch to bring GTA III to the original Xbox. While the exact implications for Sony’s exclusivity deal remain unclear, Sumner believes a deal with Microsoft was “never going to happen,” even if the offer was “ridiculously large.”
“There were conversations about doing something with them. But that just didn’t, in my mind, my memory, didn’t seem right,” he says. “They weren’t heavy and they weren’t aggressive about it, Microsoft, but… we were happy with the bed we’re lying in. And there was no reason to change and also, you know, PlayStation were doing better than Microsoft at that stage.”
He further claims Microsoft simply “didn’t understand what made us tick.”
“Sony made you feel warm and in my memory, that’s not what we got with Microsoft. They weren’t aloof, but they just really didn’t get it. I don’t think they really understood the market. And they weren’t certainly putting their arms around us. You do business with people you like, or you trust. And that’s what we did. We just trusted [Sony], absolutely trusted them.”
He was serenading the whole hotel… And he’s not a bad singer, to be fair.
That bedrock of trust and the flourishing relationships deeply bonded Take-Two and Sony, Lewis affirms. “You could ring any of the senior management there and they would answer your call and they would listen to what your concern was, whether it be getting approval for the game, whether it be production and marketing, whatever it is… I was speaking to someone from Sony probably daily.”
Sony’s assistance extended to the development side, according to Obbe Vermeij, then a technical director at Rockstar North. GTA III famously started development on the Dreamcast, and although initially saddened by the switch, Sony facilitated a smooth transition by supplying 20 rare PS2 dev kits.
While Sony didn’t directly provide Rockstar with engineers, it did maintain a “weird room full of electronics” at its London headquarters. This facility allowed third-party developers to rigorously test their games.
“They would be able to find the bottlenecks and tell you, at a very detailed level, these instructions [to fix it],” Vermeij explains. “Sony were just super supportive whenever we asked for something, they would give it to us.”
The bond between Deering and Sumner was particularly robust. Both speak highly of each other, and Sumner notes they still occasionally meet for drinks.
“I have very fond memories of Chris Deering singing outside my hotel in Reykjavik at four o’clock in the morning. He was serenading the whole hotel… And he’s not a bad singer, to be fair.” Yet, these social gatherings, or “jollies,” were secondary to the invaluable support Sony consistently provided.
“They really went out there to support the company… and I hate to say, in my opinion, unlike Nintendo, unlike Xbox, and unlike Sega,” he asserts.
“It felt like someone putting their arm around you and saying, ‘actually, guys, you’re part of the team.’ I mean, it sounds like I’m in the Sony fan club. And I’m not saying that just because it’s about PlayStation 2, I actually truly believe it.”
This deep trust extended far beyond GTA III. The precise timing of timed exclusivity discussions for GTA Vice City and San Andreas remains somewhat ambiguous. Deering recalls the initial understanding as a “three-game deal,” while Sumner states each game was negotiated separately. Colaço, however, pins it to the point when SCEA officially joined the GTA III exclusivity agreement.
At a minimum, the terms were renegotiated following GTA III’s monumental success, Colaço confirms. “Once the game came out and was a success, much bigger than anyone expected, then to maintain the arrangement the financial numbers went up considerably.”
Take-Two argued that foregoing sales on other platforms was becoming increasingly costly as GTA’s popularity soared. Colaço acknowledges this was “partially true,” but also notes Take-Two genuinely valued its close partnership with Sony.
“So the conversations became much more about becoming strategic partners than transactional ones.” This evolved relationship, he adds, naturally included discussions about exclusivity for upcoming GTA titles.
While the exact terms of the Vice City or San Andreas deals are not disclosed, it’s clear they far surpassed GTA III’s initial agreement. Notably, the exclusivity periods progressively shortened: Sony secured a full year for Vice City, but only seven months for San Andreas, both less than GTA III’s two years. As time progressed, the roster of attendees at these meetings “changed a little as discussions were more global and the financial numbers dwarfed the original deal,” Colaço explains.
Sam Houser and others were all like, ‘Oh my God, it’s not doing well.’
The profound impact of GTA III on broader gaming culture and the PS2’s sales wasn’t instantaneous or guaranteed. Before its release, Rockstar harbored concerns that GTA III might not resonate with audiences, Vermeij reveals.
“At the last E3 show before [release], maybe six or eight months before the game came out, it had a really poor showing. People weren’t really that interested. I remember the guys in New York, Sam Houser and others, they were all like, ‘Oh my God, it’s not doing well.’”
“But of course, we did know that Sony were into it, and they promised a lot of marketing and they totally delivered on that.”
Its monumental success only became undeniably clear about six months post-release, he notes.
“Typically a game would sell well for three or four months and then it would just die out. With GTA III, it wasn’t like that. It sold okay, but then it just didn’t die out. It just kept going because people told their friends and it was just picked up organically. It just kept going.”
Both Sumner and Lewis confirm that Take-Two deliberately managed product availability, keeping it “tight.” If demand was for one million units, they would ship only 600,000. “People were saying it was going to be banned. It was never ever going to be banned, but people believed that, and so what we did is we kept the product really, really tight, so when you saw it in Electronics Boutique, you had to buy it, because if you didn’t buy it they may not be here tomorrow,” Sumner explains.
Grand Theft Auto quickly ascended to cultural phenomenon status. Sumner, by then relocated to New York, found himself appearing on primetime TV shows to defend GTA’s controversial violence. He also recounts a remarkable moment where Tommy Mottola, head of Sony Music Entertainment, offered to handle the game’s music budget—originally set at $600,000—for free. “He said, ‘I will get you the tracks, I just want to release the CD.’ That was the power of Grand Theft Auto.”
Lewis fondly remembers the joy and relief following GTA III’s release. “You get a sigh of relief, I think is fair to say initially, and then this euphoria, because it keeps happening. We really had arrived when these products continued day in, day out, to sell… every 100,000 new PS2s we could pretty much say, ‘Well, we got to sell another 10,000 GTA III’s.’”
While quantifying GTA exclusivity’s exact contribution to the PS2’s success is impossible, everyone involved agrees it was immensely helpful.
“Of course they would have been successful [without it],” Sumner admits. “Would they have been as successful without Grand Theft Auto? Probably not, because the amount of coverage and the desirability of that product just sucked people in at a ridiculous rate.
“Sony delivered a great platform but it’s a piece of plastic unless you have something like Grand Theft Auto on it and that was fundamental to people’s understanding or awakening to the opportunities, cultural opportunities that the PlayStation could deliver.”
Deering estimates that, in Europe, “all things considered, recognizing and trying to be self critical and not inflating everything, we probably did 20% more than we would’ve without it, at least through PS2 and 3.”
Not a bad outcome for negotiations that began casually over evening drinks at a Los Angeles hotel. “They came to the Sunset to complain,” Colaço reminisces. “They went out with $2 million they weren’t expecting. And we did the best exclusivity deal of all time!”