Is Take-Two a Good Investment After the GTA V Windfall?

GTA V has pushed Take-Two near its 52-week high, but are there more reasons to invest in it?

Mar 26, 2014 at 12:05PM

Take-Two Interactive Software (NASDAQ:TTWO) has been riding the success of its most successful franchise, GTA V, this year. Shares have already gained close to 24% as Take-Two delivered better-than-expected results driven by robust holiday demand for Grand Theft Auto V, the record-breaking launch of NBA 2K14, and the successful release of WWE 2K14. Additionally, digitally delivered content is also playing a key role in the company's revenue.

GTA V has sold over 32.5 million copies and is still going strong. The game was the fastest-selling title in the history of entertainment products, and it grossed over $1 billion in the first three days after its release. This is impressive performance since the game is only available on PlayStation 3 and Xbox 360, and has yet to hit the PC and new-generation consoles.

But, the question is, can Take-Two continue to perform well this year, despite tough competition from Electronic Arts (NASDAQ:EA)?

Can Take-Two continue its strong performance?
Until now, Sony and Microsoft have sold nearly 10 million units of the PlayStation 4 and the Xbox One, respectively. With gamers eagerly waiting for the game to hit the next-gen consoles and PC, (expected in June) Take-Two will witness another wave of high sales when this officially happens. Apart from GTA V, Take-Two's NBA franchisee is also doing well, as NBA 2k14 was one of the highest-selling games in the month of February. 

Also, the presence of a famous studio such as Rockstar Games is an advantage for Take-Two. The studio's works are seen in 250 million games worldwide, spanning a range of hit games. Again, NBA 2K14 has become the fastest-selling release in the history of the NBA 2K franchise, exceeding sales of 5 million units across consoles and PCs.

In addition, the WWE franchise is another growth driver for Take-Two; The game's sales have exceeded expectations. Take-Two is now supporting the title with add-on content, including a season pass that features several WWE superstars and legends. This is a good strategy, as additional content helps gamer engagement to improve, driving additional revenue and profits.

Take-Two has released downloadable content for several games such as BioShock Infinite, Borderlands 2, and Sid Meier's Civilization V. It has also released nine downloadable offerings in the past 16 months and is planning to release more in the coming months.  

Mobile push
Rockstar Games has released Grand Theft Auto: San Andreas for several leading mobile platforms, as well as iOS and Android. This will enable Take-Two to grow its audience, simultaneously generating additional revenue and profit at a modest cost of development and sans much marketing.

But, Take-Two needs to ensure that the porting of a popular franchise to mobile is done perfectly, unlike what rival Electronic Arts is facing. EA is attacking the mobile gaming market with several popular games such as FIFA 14. But, the company made a mess with Dungeon Keeper and received sharp criticism from gamers who stated that the game is almost "unplayable" until a significant amount of money is spent.

Even Peter Molyneux, developer of the original Dungeon Keeper game, is of the opinion that EA has not gotten the game's balance right, according to BBC. So, Take-Two will be better off if it simply avoids this, and if it does, San Andreas' cult status will push up mobile revenue.

What could come next?
Looking ahead, Take-Two has a robust pipeline of both new intellectual properties and games from its popular franchises, including more than ten unique titles for the next console generation. The initial success of the Xbox One and PS4 is a positive sign for the company. Apart from capitalizing on these new consoles, Take-Two is also investing in emerging platforms such as mobile to deliver more value to shareholders.

During fiscal 2015, Take-Two will focus on next-generation releases from the NBA 2K and WWE franchises. It also has other unannounced titles under development to complement existing games. So, exciting times lie ahead for Take-Two, and investors should continue holding the stock.

3 stocks to own for the rest of your life
As every savvy investor knows, Warren Buffett didn't make billions by betting on half-baked stocks. He isolated his best few ideas, bet big, and rode them to riches, hardly ever selling. You deserve the same. That's why our CEO, legendary investor Tom Gardner, has permitted us to reveal The Motley Fool's 3 Stocks to Own Forever. These picks are free today! Just click here now to uncover the three companies we love. 

Mukesh Baghel has no position in any stocks mentioned. The Motley Fool recommends Take-Two Interactive. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.


Compare Brokers