Take-Two Interactive Software (TTWO) has surged this year as the company delivered impressive results driven by the robust holiday demand for Grand Theft Auto V, the record-breaking launch of NBA 2K14, followed by successful release of WWE 2K14. Going forward, there is more growth in store for Take-Two.
GTA V's success
GTA V had thumping success as it has sold more than 32.5 million copies till now and it expects to sell many more in the coming months. The game was the fastest selling title in the history of entertainment products that grossed over $1 billion in the first three days. I feel this is an outstanding performance since the game is only available on PlayStation 3 and Xbox 360, and is yet to hit the PC and new-generation consoles.
But, Take-Two Interactive has to make sure that it continue to perform well in the coming years to keep pace with its peers such as Electronic Arts. Also Sony and Microsoft have together sold approximately 10 million units of the PlayStation 4 and the Xbox One. However, Take-Two expects greater sales from next-generation consoles and PCs that will be launched in June 2014. Apart from GTA V, the company’s NBA franchisee is also doing well as NBA 2K14 was one of the highest selling games in the month of February.
Take-Two also benefits from the presence of famous studios such as Rockstar Games, as it offers nearly 250 million games worldwide, spanning a range of hit games till date. Again, its NBA 2K14 has also become the fastest selling release in the history of NBA 2K franchise, that exceeded sales of 5 million units across consoles and PCs.
In addition, Take-Two owns the WWE franchise that can certainly boost its sales in the gaming business. The game has performed better in the last year and exceeded expectations. The company is also supporting content, including a season pass that features several WWE superstars and legends, and thus expects better operational and financial performance in the ongoing and coming quarters. This is indeed a good strategy as additional content helps gamer engagement to improve, driving additional revenue and profits.
Consequently, Take-Two has released downloadable content for several games such as BioShock Infinite, Borderlands 2 and Sid Meier's Civilization V. The company, so far, has released nine downloadable offerings in the past 16 months and is planning to release more of it in the coming months which will definitely have a great impact on its sales that it expected to surge in the remaining quarters of fiscal 2014.
As far as the future is concerned, Take-Two has a robust pipeline for both new intellectual properties and games from its popular franchises in development, including more than 10 unique titles for the next console generation. The company is also benefiting from the initial success of the Xbox One and PS4.
So, exciting times lie ahead for Take-Two and investors should continue holding the stock.