TTWO stock (NASDAQ:TTWO)
Take-Two (NASDAQ:TTWO) is in the middle of making the most anticipated video game of all time. There are now signs that GTA 6, which has been talked about for years, could be coming soon. This game will probably sell more copies than any other game ever has, and it may also set the standard for the next generation of games.
Take-Two’s future success depends a lot on how well GTA 6 does, which is not surprising given how much time, effort, and money the company puts into the GTA series. Take-Two has done a great job of making more games, but GTA is still the company’s main focus, and for good reason.
Take-Two has been in the lead for a long time when it comes to open-world games, and the gap between them and other companies keeps growing. Red Dead Redemption 2 is still one of the best open-world games, even though it came out in 2018. The fact that GTA 5, which came out ten years ago, is still one of the most popular games is even more impressive.
The only open-world games that can compete with each other are Grand Theft Auto and Red Dead Redemption. Cyberpunk 2077 was a great chance for CD Projekt Red (OTCPK:OTGLY) to beat Rockstar, but the game’s bad start made it impossible for the company to take advantage of the chance.
Now that GTA 6 is almost done, Take-Two has a chance to make its lead even bigger. Making open-world games is getting more and more expensive, so it’s hard to see GTA 6 being surpassed soon, even if it doesn’t live up to all the hype. When GTA 6 comes out, it’s likely to shake up the industry, and Take-Two is in a good position to make money from its success.
With Cyberpunk 2077, CD Projekt Red was going to show Take-Two that they were a real competitor. Instead, the game almost ruined CD Projekt Red’s reputation among gamers. This failure to launch is a good example of how hard it is to make triple-A open-world games.
A Really Interesting Virtual World
With GTA 6, Take-Two has a great chance to profit from the metaverse craze. You could say that Take-Two has already done what Meta wants to do in the metaverse, even though it was on a much smaller scale. In games like GTA 5 and Red Dead Redemption 2, players can already do a lot of different things, make friends, and even play a role.
With all the improvements in gaming hardware, software, and AI, it’s hard to say how far Take-Two can take GTA 6. There are even rumors that Take-Two may use blockchain and crypto in GTA 6, which would make the idea of a GTA metaverse even stronger. Based on what we know so far, it looks like GTA 6 will be more of a platform than a typical game.
GTA Online already has a lot of the social features that Meta wants to spread in its metaverse.
Large Risks Remain
Take-Two’s value will depend a lot on how well GTA 6 does, which makes it riskier than companies like EA (NASDAQ:EA) that have more games. Take-Two has done a great job of diversifying through acquisitions, but the company is still very reliant on its flagship franchises, especially Red Dead and Grand Theft Auto.
So far, 175 million copies of GTA 5 and 70 million copies of Red Dead Redemption 2 have been sold. This is impressive, but none of the company’s other games come close to this number. The fact that its biggest franchises aren’t doing well is even worse because of this. In fact, a big part of the company’s Q3 revenue of $1.408 billion still came from sales of GTA and Red Dead Redemption games and recurring spending on those games.
Bottom Line
TTWO stock isn’t too expensive compared to companies like Activision Blizzard (NASDAQ:ATVI), which has a market value of about $18.7 billion and a forward P/E ratio of 31. Take-Two is the leader in the open-world gaming genre, which is becoming more and more popular, and GTA 6 is getting a lot of attention. Take-Two also has a strong lineup of games other than GTA, so the company should still do well in the future.
Featured Image: Freepik @ freepik
