14.12.2019 21:07:00

Smart Timing for a "Grand Theft Auto" Sequel Could Deliver Huge Gains for Take-Two Interactive

Take-Two Interactive's (NASDAQ: TTWO) Grand Theft Auto V is, by many metrics, the most successful video game of all time. Some reports suggest that it's actually the single most profitable entertainment release ever. The title has shipped over 115 million copies and generated tons of high-margin revenue through its online mode. Plus, it's still putting up strong sales and keeping players engaged. Much of the bull case for investing in Take-Two hinges on the idea that it will eventually deliver another successful Grand Theft Auto (GTA) sequel.The company may be hesitant to release a follow-up while GTA V is still putting up strong sales, due to fears that a new title might cannibalize revenue from the current one. Nevertheless, next year would be the optimal time for the company to release Grand Theft Auto VI. The best-case scenario for investors is that the company replicates the release strategy it used for GTA V: Debut the sequel at the tail end of the current video game console cycle, make it available only on current platforms for roughly a year, and then release an updated version for PC and Sony and Microsoft's new platforms in order to encourage repeat purchases.Image source: Take-Two Interactive.Continue reading
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