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For the most part, Take-Two (NASDAQ:TTWO) shares have languished during the current video game cycle, underpeforming competitors like Activision (NASDAQ:ATVI) and THQ (THQI) over the last 24 months.

The most recent earnings report, while a step above what Take-Two investors have been used to, was far from perfect. According to Reuters, Take-Two's net loss for its fiscal third quarter was $58.5 million, or 81 cents per share, compared with a loss of $91.4 million, or $1.29 per share, a year earlier. It was the company's seventh consecutive quarterly net loss

A year ago, I recommended buying TTWO when it was late in its regulatory filings, which drove the stock to $15. At over $20, I recommended taking profits on the video game software maker. The stock is trading at under $16 today, and I believe it may be time to re-evaluate the stock.

First and foremost, GTA IV, which analysts and the media have extensively talked about, is due for launch next year (I wonder if the delay is a marketing ploy to avoid the cloud formed by Halo 3). But more importantly, Oblivion, a game released in early 2006 by the company, has continued to do well.

It is the only game I know that at eighteen months after release, has still not been discounted from its original release price of $59, and a recently released expansion pack, adds to the game's long-term prospects.

Keep in mind though that Oblivion was co-developed by Bethesda, so Take-Two gets only part of the revenues.

More importantly, BioShock, a game released two weeks ago, is selling extremely well. I have played this game, and it promises to be one of the two biggest games of the year (the other being Halo 3).

There is just not enough credit being given to this release that has already sold over a million copies in two weeks.

In March, a new management team took over the company, and in the short time since, the company looks a lot better financially and competitively. I believe that while Take-Two shares are risky, they also carry the highest risk-reward among the video game software makers.

Full Disclosure: I do not own any of the stocks mentioned here but my position can change anytime without notice.

TTWO vs. ATVI vs. THQI 1-yr chart:

Source: Take-Two Software: Risky But Worth It