XCOM 2 hasn't driven sales to the same heights as a year ago. Image source: Take-Two Interactive.

What: Shares of Take-Two Interactive Software, Inc. (NASDAQ:TTWO) gained 13.8% in May, according to data provided by S&P Global Market Intelligence, after the company reported earnings, and got some tailwinds from competitors.

So what: Take-Two Interactive is in the midst of a transition from highly successful blockbuster games like Grand Theft Auto and NBA 2K to a more mobile-centered business, something investors have been expecting. So it wasn't a surprise that adjusted revenue dropped 20% in the fiscal fourth quarter, to $342.5 million, and adjusted earnings per share dropped $0.03, to $0.46. But earnings easily beat the $0.26 in earnings that Wall Street expected, so the stock ended the month on a high note. 

Helping shares this month was strong results from Electronic Arts and Activision Blizzard, which are less reliant on blockbuster games, and are showing the path to the future in gaming. Despite its declining results, Take-Two Interactive rode their coattails a bit in the quarter.  

Now what: Investors were impressed with Take-Two Interactive beating Wall Street's expectations, but I don't see the company as positioned nearly as well as EA or Activision Blizzard in today's game environment. It just hasn't made the same push into mobile, and doesn't have the same recurring-revenue model that both competitors have built.

Until we see a more-stable model develop, and growth in Take-Two Interactive's engaged user base beyond one-time game sales, this stock isn't a long-term value for investors.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.