Take-Two reported weak fiscal second-quarter results, but they don't matter. Fiscal 2027 sales and profits will hinge on the success of Grand Theft Auto VI, which will finally be released on Nov. 19.
Grand Theft Auto VI will ride on the popularity of the 235 million copies of Grand Theft Auto V sold, and in-game purchasing will give this title a multiyear runway of high sales.
Bears
Take-Two lives and dies with Grand Theft Auto, and if GTA VI disappoints, the stock will likely get crushed, and the ability to invest in the future will be hindered.
Take-Two is one of the largest global developers and publishers of video games, with labels including Rockstar, 2K, and Zynga. Grand Theft Auto is the firm's biggest franchise, accounting for about 30% of total sales for the past decade. NBA 2K is the industry's dominant basketball video game, with Take-Two releasing a new version annually. Other notable franchises include Red Dead Redemption, Borderlands, and Civilization. Typically, more than three-fourths of the firm's sales are from in-game spending, with the remainder coming from initial game sales. Since acquiring Zynga in 2022, mobile makes up about half of total sales.