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Take-Two Interactive: Emerging Powerhouse In The Gaming Industry


  • Take-Two Interactive is at the forefront of many promising gaming trends.
  • Take-Two Interactive owns some of the industry's most prestigious franchises.
  • While Take-Two Interactive has been criticized for the infrequency of major game releases, the company's quality-over-quantity approach is likely to pay off.

COVID-19 has had a major negative impact across nearly all major sectors over the past few months. The video game industry is one of the few industries that may actually come out of the pandemic in better shape. Major video game companies like Take-Two Interactive (NASDAQ:TTWO), Activision Blizzard (ATVI), and EA (EA) are more valuable than they were prior to the pandemic.

Nationwide stay-at-home recommendations have clearly allowed individuals to spend more time playing video games. While this trend may not continue once normal life is resumed, it does point to the gaming industry's growing dominance in the entertainment sphere. Take-Two, in particular, has much to gain from the gaming industry's growing influence.

Take-Two reported Q4 revenue of $729.4 million in Q4, beating expectations by $143.85 million. The company's GAAP net income also increased 21% to $3.54 per diluted share. Despite one of the worst economic downturns in recent memory, Take-Two is still thriving. Take-Two owns some of the gaming industry's most successful franchises and is continually expanding its portfolio.

Take-Two has seen its share prices surge in recent months.

Source: YCharts

Technological Trends Favor Take-Two

The exponential progress of technology is making gaming more entertaining than ever. Ever-improving graphics, AI, and gaming systems are quickly pushing video games into the mainstream. Take-Two will arguably benefit the most from these advancements out of all the major video game companies. Take-Two specializes in beautifully constructed open-world games, which are highly dependent upon graphics and AI.

The major appeal of Take-Two's flagship franchises is its immersive qualities. Red Dead Redemption, for instance, enables players to experience a fully fleshed out Western world in which the player has the freedom to do a wide variety of tasks. GTA, on the other hand, allows players to experience a more urban setting.

This article was written by

AWS Certified Solutions Architect, AWS Certified SysOps Admin, AWS Certified Cloud PractitionerTop ~5% performer on Tipranks among all analysts and experts. https://www.tipranks.com/bloggers/simple-investment-ideas.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Comments (14)

The Street punished TakeTwo for a weak 2021 pipeline, and now is the time to take advantage of that. Grabbing the stock at this price is a steal. The GTA V remaster alone is going to drive this to $160 in no time.
13 Jun. 2020
Imo TakeTwo should focus on higher margins. Game development is very expensive and I love to play the games because they put so much heart into them but I dislike the stock as investor because it has not so consistent revenues & earnings (I know GTA Online stabilized it a lot) and the margins are thin (although GTA Online is a huge cash cow). Imo they should've also made GTA Online a F2P game by now to reach more players. Also RDR2 Online was just a blip compared to GTA Online. That is so sad.

That's why I rather stick to other businesses and buy the games instead.
Margins are thin?? Are you kidding?
13 Jun. 2020
@Nickfunds Are you kidding? Have you actually checked the numbers? 2019 less than 14% EBIT margin. All the years before single digits.
Compare it with ATVI. Compare it to other media companies.
This is f**king thin!
Yes, $TTWO EBIT margin is a bit lower than $ATVI EBIT margin, but you are saying we should avoid this stock because of this? You are just overreacting. $TTWO will continue to grow and make money. That's all that matters.
The Outlier Focus profile picture
Take Two’s management is top notch and with a crazy strong lineup of successful games like 2K series, Red Dead, and Grand Theft Auto (which is basically a silver bullet at this point), esports, healthy financials and a HUGE game pipeline makes Take Two a conviction buy for any investor with eyes. They know how to balance profits with quality execution on the creative side and has done so on a consistent basis over YEARS. Private Division is a clear example of this. They allow their studios room to breathe creatively to put out the best games possible that people are loyal too and will love for years and years without having to constantly push out game after game every year like a machine like EA does.

Long $TTWO
Basit Saliu profile picture
Great point and comment.
fabskxha profile picture
I agree. The unfortunate nature of the virus was a mix blessing for TTWO. It rained millions of new gamers on their laps at zero acquisition cost. Many of these gamers will continue on for many years to come post covid.
Basit Saliu profile picture
It only just the beginning for Take-Two's dominance, and the company have the best balance sheet to expand and excellent structure and management. I believe the stock price will reach $200.00 in near future. Go TTWO!

Excellent Analysis/Article Simple Investment Ideas.
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