Take-Two Interactive (NASDAQ:TTWO) stock has dropped 9.4% in 2019 as of close on February 19. Shares are down 12.8% year over year.
Take-Two consists of two wholly-owned labels; Rockstar Games and 2K. In October Rockstar released Red Dead Redemption 2, one of the most anticipated titles in recent memory. As expected, it put up remarkable retail numbers. In the third quarter of fiscal 2019 Take-Two reported 140% year-over-year growth in Net Bookings to $1.57 billion. The largest contributors to this growth were Red Dead Redemption 2, NBA 2K19, and Grand Theft Auto Online.
Red Dead 2 Online went live on November 27, 2018. Grand Theft Auto Online has generated impressive revenue for Take-Two since the release of Grand Theft Auto V, which also put up fantastic sales numbers.
However, response to Red Dead 2 Online has been lukewarm. The first Red Dead Redemption also received criticism for its online multiplayer in sharp contrast to the well-reviewed single-player campaign.
Still, Take-Two is on pace to achieve record Net Bookings and Adjusted Operating Cash Flow in fiscal 2019. Rockstar’s games are consistent critical darlings, but the gap between releases is widening. Red Dead 2 Online will have trouble generating the kind of revenue Grand Theft Auto Online has produced in the gap years.
There is scarce information on the development of Grand Theft Auto VI, but some reports are hinting at a 2020 release.
Weakening retail sales in the North America are a concern going forward, but Take-Two still comes at a decent price today considering the year it has put together so far.
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