Is Take-Two a One Trick Pony?

While some may consider Take-Two Interactive a one-hit wonder, but the company has a lot more to offer apart from its Grand Theft Auto series.

In fact, in the most recent quarter, Take-Two Interactive (TTWO) reported earnings per share of $0.21, $0.08 better than the estimates. The company’s net revenue was up 13 percent year over year. The company gained huge benefits due to the continued robust performance of Grand theft Auto V as well as NBA 2K16, together with increment in regular customer spending, comprising record bookings from GTA Online.

In all the previous quarters since the launch of GTA V, GTA V, and GTA V online have performed much better than the company’s expectation.
However, the trend continued in the recently reported quarter, as GTA V performed significantly better than the company’s expectation.

As per new data from the NDP Group, across all platforms in the previous year, GTA V successfully became the world’s second most selling game including physical as well as full game downloads. Moreover, GTA Online carries on growing with the game delivering record bookings in the first quarter.

While it’s true that Take-Two relies heavily on the GTA franchise, the company also has other offerings.
Is Take-Two a One Trick Pony?
Image by superanton / Pixabay
One catalyst for the company’s growth is its robust line-up of games for 2016. For instance, the company is about to release Mafia 3 later this year. The prior two installments of the Mafia series sold over 5 million units combined and became viral among gamers.

In addition, the third installment of Mafia has formerly received good reviews from prominent sources such as IGN as well as Polygon.

Apart from all this, digital revenue and sports franchising are the two most significant areas that offer huge growth opportunities. In the past few years, the company was very belligerent regarding monetizing these two segments and in a very short span of time it achieved substantial progress in its endeavor.

Moving onward, the company still has great products in its pipeline that could aid its growth. One substantial opportunity came out of the Games for Change Festival in June, at which the company detailed that it would work with non-profit learning company GlassLab to amend a version of the Civilization V game.

While GTA will be Take-Two’s primary source of revenue for a long-time, the other aforementioned titles should also boost the company’s fundamentals going forward. As a result, I think Take-Two is a good buy.
Published on Aug 24, 2016
By Prudent Investor

Copyrighted 2020. Content published with author's permission.

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