Take-Two: Q4 Should Be A Monster Quarter

Kevin Berk profile picture
Kevin Berk

A couple of weeks ago, I outlined why I thought Take-Two (NASDAQ:TTWO) is very a different company than a few years ago with significantly brighter prospects. But many investors focus on the here and now. The console video games business is all about cycles--product cycles, console cycles, consumer shopping cycles. Right now we are in the lollapalooza of video game cycles for TTWO - a new version of biggest hit coupled with next gen consoles during the critical Christmas shopping season. So how is it going so far for Take-Two?

By my estimates, spectacularly. Take-Two has already projected its highest revenue holiday quarter ever. This is not surprising given that Grand Theft Auto 5 (GTA V) continued to sell extremely well going into October. After leading the NPD sales charts in September and October, GTA V sales in November remained strong, ranking 5 in sales in its 3rd month, behind four new releases. It was also the only title on the top 10 available on only two platforms. NBA 2k14 is performing very well. It was the number 6th in overall sales and the top selling sports title on the next generation platforms.

In its earnings release in late October, revenue was projected to be $650million -700 million by TTWO, which has been low-balling estimates recently. Analysts are coming in at an average slightly above $700 mil (range: $668-$766 mil). I estimate revenue will be about $800 million, with about half coming from GTA V.

GTA V Should Bring in $400 Million

Obviously add GTA V into the mix, and you get a monster quarter. I estimate that by the end of September, TTWO had "sold in" 23.5 million copies at a $47.75 ASP into the channel for revenue of $1.12 billion (revenue source: TTWO press release). On October 29th, they

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Kevin Berk profile picture
Kevin Berk is a strategic investor, entrepreneur and an expert in online media. He helped develop online ventures at CitySearch and Disney, and was instrumental in the merger of TicketMaster and CitySearch and the combined company's IPO. (It is now owned by IACI.) He founded Zeal.com in the online search and directory space. He then led the advertiser products team at LookSmart before co-founding online job search company YorZ and writing his blog, Berk Sure Has a Way (http://www.berksurehasaway.com/). Kevin combines an insider's understanding of online content, search and advertising with an eye for stocks and a clear writing style.You can follow him on Twitter: http://twitter.com/#!/kevinberk

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