Take-Two Interactive has that ace up its sleeve


Take-Two Interactive (NASDAQ: TTWO) continued to benefit from strong sales performance from Rockstar Games Grand Theft Auto V (GTA V) – a title that is almost eight years old and represents a significant portion of the company’s annual bookings.

There is a risk that the game’s sales will flatten at some point and Take-Two’s revenue growth will slow down. But with no clear indication that Take-Two will release the next installment in the series soon, it is moving forward with plans to release a remastered version of GTA V for new game consoles from Sony and Microsoft which just launched in the fall.

However, an improved version of GTA V for next-gen consoles, that might not be all the company has in the works. The franchise is over 20 years old and now has a rich history of content that Take-Two could bring back to boost sales between new installments in the series.

Image source: Getty Images.

Remasters are in demand

Remakes and remasters of older games have been popular in recent years. The difference between the two is that a remaster usually involves a simple graphical upgrade for the new game hardware, while a remake is a completely redesigned version of the original version.

GTA V goes on its second remastered version. The game was originally released in 2013 for Sony’s PlayStation 3 and Microsoft’s Xbox 360. It was then upgraded with new improvements for PlayStation 4 and Xbox One in 2014.

However, Take-Two is known to go the extra mile with its development efforts, especially its remastered games. In addition to a simple graphics upgrade, the company is also adding other improvements and features to improve the game. Take-Two’s commitment to perfection is a reason GTA V continues to grow through generations of consoles.

Take-Two recently made a remastered version of the Mafia trilogy, which the company has credited, as well as sales of RGT and Red Dead Redemption, for boosting its performance in the third fiscal quarter at the end of December.

A wealth of content

Interest in remastered versions of old ones RGT titles could be huge. Activision Blizzard made a remastered version of Call of Duty: Modern Warfare 2 Campaign last year which reportedly sold 3.4 million copies, but I believe older versions RGT titles could sell many more copies.

Rumors are circulating that Take-Two may already be working on a remaster of GTA 3 (2001) and GTA Vice City (2002). A community of fans have created their own modified version of GTA 3, which Take-Two recently shut down, fueling speculation the company has something up its sleeve. Obviously, the fact that fans go to so much trouble shows that there is great interest in the Rockstar Games catalog. RGT content.

This is not surprising given the growth of the franchise over the years. Grand Theft Auto has sold a total of 270 million copies since the original release in 1998. The current episode has more than doubled the cumulative sales of the series, with over 140 million units sold since 2013. That means there has millions of new players on the franchise who never played previous versions of the series.

There were 14 releases in total, of which Grand Theft Auto Online, which serves as a multiplayer companion to GTA V. It’s a rich history of content that Take-Two could monetize.

In Take-Two’s latest earnings call, MKM Partners analyst Eric Handler highlighted the strong demand for RGT content right now and asked management for their take on the remastering of previous games in the franchise. As usual with questions about Rockstar Games’ potential release plans, CEO Strauss Zelnick declined to comment, but appeared to be okay with the timeliness when he said, “That’s a question. excellent and encouraging. I’m more inclined to leave it more as a statement than a question. ”

Game illustration for the Cayo Perico Heist update from Grand Theft Auto Online.

Image source: Take-Two Interactive.

Past content has value for new players

The company said it has the most diverse gaming pipeline ever. While this bodes well for long-term growth, management expects Rockstar Games net bookings to represent 35% of total bookings in fiscal 2021 (which ends in March), which shows how much Take-Two depends on the success of Grand Theft Auto and Red Dead Redemption.

Every outing in the RGT the series raised the bar. Rockstar Games’ ability to tell immersive stories through each release only gets better as technology advances, making the in-game action come alive as if you were watching a movie.

With GTA Vplayer base reaching such a high level, there will be a huge demand when GTA VI released. Until then, Take-Two has a great opportunity to generate additional sales by introducing new players to characters and storylines they’ve never experienced before.

Take-Two’s ability to tap into its comprehensive content catalog is a testament to the long-term value of this best video game company.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Questioning an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.

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