Take-Two interactive software’S
Grand Theft Auto V is coming to Playstation 5 – potentially positive news for the video game maker’s stock.
In a livestream on Thursday, Sony made two key announcements on the blockbuster game, which MKM Partners analyst Eric Handler said will affect Take-Two’s actions (ticker: TTWO). First, Sony (SNE) announced plans to migrate GTA V to the latest version of the console, in the same way as the first three Star Wars the films were remastered in the 1990s. The game also has a profitable and popular online version, which Sony said it would give free to all owners of Playstation 5.
As a result, Handler raised MKM’s target for Take-Two stocks to $ 160 from $ 145 and raised its score to Buy. Shares fell 1.2% to $ 133.25 on Friday afternoon.
Launched in September 2013, GTA V is the most financially successful media title of all time, in part because it has already been released on two generations of consoles, potentially selling duplicate copies but also reaching distinct audiences.
The fact that Sony announced Thursday that the developers would be moving GTA V a third-generation game console could be used to bring existing players to the new Sony hardware, said Handler. The company can again benefit from the double drop – repeat sales to players switching systems – to a limited extent.
“Bringing GTA V to these next generation systems is an important step in maintaining its large revenue base for GTA Online as the Playstation 4 and Xbox One user base begins to decline,” Handler wrote. .
The manager assumes that Red Dead Redemption 2, one of Take-Two’s other blockbusters, may also appear in an updated format for the Playstation 5. He says that although sales are below GTA VThe game still brings in a decent amount of money for Take-Two.
Investors briefly gave Take-Two an increase of about 1.7% on Thursday afternoon as news of GTA V emerged during the live broadcast of Playstation 5. According to Mario Lu, analyst at Barclays , investors may have suspected Sony of revealing Grand Theft Auto VI.
Thursday’s livestream suggests that GTA VI may be further away than investors had thought. Jefferies analyst Alexander Giaimo predicts Take-Two will announce the next GTA end of 2021 or 2022, with a game likely to be released in 2023.
“I think there are a lot of assumptions that a new big game is coming,” said Giaimo in a telephone interview on Friday. “We have a neutral rating on Take-Two. It is the most expensive video game stock. “
The Take-Two stock has increased nearly 9% so far this year, while the S&P 500 index is down 6%.
Write to Max Cherney at [email protected]