What if a public company managed to book the highest sales results ever for an entertainment property launch, and Wall Street just shrugged? That's about what happened last week when Take-Two Interactive (NASDAQ:TTWO) announced its third-quarter earnings results.
With sell-in of 29 million units in just six weeks, the Grand Theft Auto V title blew away even the most optimistic sales estimates. The game helped Take-Two increase its revenue fourfold, to more than $1.2 billion, while delivering a huge boost to quarterly profits. The company also hiked its earnings outlook for the full year, and yet the stock barely budged.
In the video below, Fool contributor Demitrios Kalogeropoulos argues that the reason boils down to consistency: Investors are penalizing Take-Two for its lack of predictable sales growth. While competitors like Electronic Arts (NASDAQ:EA) and Activision Blizzard (NASDAQ: ATVI) ring the register each year on their major franchises, Take-Two waited five years between chapters in its iconic GTA franchise. While that's great for building up anticipation for a title, it's terrible for delivering the steady sales and earnings growth that investors seek.
Fool contributor Demitrios Kalogeropoulos owns shares of Activision Blizzard. The Motley Fool recommends Activision Blizzard and Take-Two Interactive. The Motley Fool owns shares of Activision Blizzard. 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.