Video game developer Take-Two Interactive (TTWO) is getting ready for one of the biggest launches in entertainment history with Grand Theft Auto VI, which is now scheduled for November 19 after two delays. According to Bloomberg, CEO Strauss Zelnick said the goal is to deliver something players have “never experienced before,” but he also admitted that the expectations are both exciting and terrifying. That pressure is easy to understand. GTA V has sold more than 225 million copies, making it the second-best-selling game ever behind Microsoft’s (MSFT) Minecraft.
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At the same time, the game has reportedly been in development for more than eight years, which makes it one of the most expensive projects in gaming history. Therefore, anything short of a massive hit would likely disappoint investors and analysts. Indeed, some analysts expect it to sell more than 25 million copies on day one. Zelnick said Take-Two’s strategy is built around expensive blockbuster releases, even as development costs keep rising and AI has not yet meaningfully lowered those costs. Nevertheless, early demand looks strong, with the first two trailers combined receiving almost half a billion YouTube views.
Still, one major question is why GTA VI will launch only on PlayStation and Xbox at first, rather than on PC. Zelnick said Rockstar traditionally starts with consoles because it wants to serve its core audience first, even though PC can now account for 45% to 50% of sales for major titles, compared with about 5% when he joined Take-Two in 2007. Nevertheless, this decision is likely to provide Take-Two with two sales waves: one when the console version launches in November and another when the PC version eventually arrives.
Is TTWO Stock a Good Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on TTWO stock based on 11 Buys assigned in the past three months, as indicated by the graphic below. Furthermore, the average TTWO price target of $292.36 per share implies 29.8% upside potential.
