- TTWO
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“Grand Theft Auto VI” from Take-Two Interactive (TTWO) has a shot at blowing the minds of investors amid intense anticipation for the game’s release in a few weeks.
“Success looks like if 10% of the people who watch the preview video — I think it was something like 750 million people — if they go out and buy the game, that would be mind-blowing,” Electronic Arts co-founder and Kleiner Perkins partner Bing Gordon said on Sozzi Unleashed.
Gordon — known in gaming circles as the “godfather of video games” for his work on popular properties such as “Madden” — sits on the board of directors of Take-Two Interactive.
Take-Two Interactive has been led by CEO Strauss Zelnick for about 15 years.
“You know, the movie business still brags about a $300 million box office, and a $1 billion box office blows their minds. The games business has been bigger than the movie business for a long period of time, first in hours and then in money. So you always want to be the best ever.” Gordon added. “I think from my point of view, what success for GTA 6 is going to be on Thanksgiving Day after eating your turkey, you don’t watch football, you play GTA.”
For Take-Two Interactive, the release of “Grand Theft Auto VI” represents not just a flagship title but a transformative financial catalyst.
Keep in mind that “Grand Theft Auto V,” released some 10 years ago, has generated nearly $8 billion in lifetime retail revenue and sold more than 200 million units, with the game continuing to be upgraded for online players.
“Grand Theft Auto VI” launches on Nov. 19 for PlayStation 5 and Xbox Series X and S at $79.99. Buyers of digital preorders can start preloading the game on Nov. 12.
Experts have pegged opening-week sales projections reaching up to $4.5 billion. GTA 6 is expected to be so hot that it will pull users away from other games in droves — including those on Roblox (RBLX).
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Somewhat oddly, despite the excitement around “Grand Theft Auto VI,” Take-Two Interactive stock is down 12% in the past three months compared to a 4% advance for the S&P 500 (^GSPC).
“We would be buyers of TTWO shares at $200, near year to date-lows and 20x P/E,” Jefferies analyst James Heaney said. “The stock is down -17% since opening GTA VI pre-orders, while the same time in the 2018 Red Dead 2 cycle shares were up +18%. 37 days in front of GTA VI, TTWO shares are already trading similar to the end of 2018 post-RDR2 hype cycle, not pricing in upside from GTA VI Online or an earlier PC release. At $200 we view TTWO undervalued against the same time in the Red Dead 2 cycle.”
Follow Brian Sozzi on X@BrianSozzi,Instagram, andLinkedIn. Tips on stories? Email him at brian.sozzi@yahoofinance.com.
