Life is good at Take-Two Interactive (NASDAQ:TTWO).

The company behind Grand Theft Auto IV posted another blowout quarter last night. Revenue more than doubled to $433.8 million, as earnings clocked in at $0.67 a share, reversing a year-ago loss. Wall Street missed the memo, expecting a profit of just $0.54 a share on $381.3 million on top.

GTA4 sold briskly, of course, even though the springtime release was also aided my more recent titles like the Top Spin 3 tennis game and Sid Meier's Civilization Revolution.

The fiscal third-quarter showing was so strong that Take-Two finds itself in the unusual position of lowering its guidance for the year's final quarter, even while it raises its outlook for the year.

Take-Two is now looking to earn between $2.08 a share and $2.12 a share in earnings, after you back out stock-based compensation and fees related to coping with Electronic Arts' (NASDAQ:ERTS) unsolicited tender offer buyout bid.

A friendly buyout is still possible, but as long as Take-Two keeps barreling past analyst projections and raising its guidance, there is little reason for Take-Two and its shareholders to take the money and run. That, after all, is a better strategy for GTA4 players. There are certainly plenty of those, as the company has sold 10 million copies of the game since its April release.

That revenue stream will diminish, but the spigot won't be turned off completely. Microsoft (NASDAQ:MSFT) is paying Take-Two $50 million for a pair of digitally downloaded episodic installments available only for Xbox 360 players. That's Microsoft's way of trying to make its system stand out, as if its recent price cut weren't enough.

Take-Two is in a good place right now. Based on this year's projected profitability, it's trading at a cheaper earnings multiple than EA, Activision Blizzard (NASDAQ:ATVI), and THQ (NASDAQ:THQI). Analysts see earnings retreating in fiscal 2009, since the GTA4 juggernaut is a hard act to follow. But that could change if BioShock 2 improves on last year's sleeper-hit performance.

EA is definitely welcome to party with Take-Two, but the cover charge keeps climbing with every passing quarter. Yep, life is good indeed.

Other games to play:

Electronic Arts and Activision are Motley Fool Stock Advisor recommendations. Take-Two is a Rule Breakers newsletter picks. Microsoft has been singled out in Inside Value. Play along with any of the premium newsletters for the next 30 days with a free backstage pass.

Longtime Fool contributor Rick Munarriz will admit to still playing video games, though finding time is the rub. He does not own shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy