Please ensure Javascript is enabled for purposes of website accessibility

Instant Analysis: Take-Two Interactive Software Inc. Deepens Its Ties With WWE

By Leo Sun - Jan 29, 2016 at 3:17PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

This video game company will remain the exclusive publisher of WWE titles for years to come.

Take-Two Interactive (TTWO 2.05%) and WWE (WWE 0.14%) recently inked a multi-year extension of their licensing deal for WWE's pro wrestling video game titles. This means that the WWE 2K series will continue annually after its most recent release, WWE 2K16, and that Take-Two will continue updating its mobile card-battling game, WWE SuperCard. Terms of the deal weren't disclosed.

Why WWE matters to Take-Two
THQ originally published WWE titles, but the company filed for bankruptcy in 2012 and was acquired by Take-Two, which subsequently signed a new licensing contract with WWE in Feb. 2013 Take-Two holds exclusive worldwide rights to publish all WWE games on all major platforms and distribution channels.

WWE 2K14 marked the franchise's transition to Take-Two and 2K Sports. Its sequels have been stable revenue generators for the company. Market-tracking site Vgchartz reports that WWE 2K14 sold 2.3 million copies, WWE 2K15 sold 3.06 million copies, and WWE 2K16 has sold 2.3 million copies since last October.

Take-Two doesn't break down revenue by game, but it stated that its largest contributors to non-GAAP net revenue last quarter from digitally delivered content were Grand Theft Auto, NBA 2K, Borderlands, and WWE 2K. Digital revenue rose 57% annually to $141 million during the period and accounted for 39% of the top line. The company also noted that WWE SuperCard was its most financially successful free-to-play mobile offering to date and has been downloaded nine million times on iOS and Android since its launch in Aug. 2014.

Why investors should care
By securing a new deal with WWE, Take-Two extends the runway for one of its top franchises, while supporting the growth of its 2K Sports titles. The WWE games won't offer the same explosive revenue growth as its blockbuster Grand Theft Auto V, which has sold nearly 52 million copies to date, but they should deliver stable returns for the company on an annual basis -- something that the irregular GTA releases can't do.

Leo Sun 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.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Take-Two Interactive Software, Inc. Stock Quote
Take-Two Interactive Software, Inc.
$123.14 (2.05%) $2.47
World Wrestling Entertainment, Inc. Stock Quote
World Wrestling Entertainment, Inc.
$72.54 (0.14%) $0.10

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/13/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.