Take-Two Moving Away From GTA

Often, analysts are dubious of the company Take-Two when they do not have a major Grand Theft Auto release, Todd Mitchell of Kaufman Bros. believes that the publisher will be successful in 2010 even with no Grand Theft Auto V on the horizon.

“We believe concerns that there would be no GTA V in fiscal 2010 and that Take-Two was too dependent on this IP have weighed on the stock,” says Mitchell. “Take-Two is successfully diversifying away from its dependence on GTA.” Mitchell anticipates strong sales of BioShock 2, along with two other titles being released under Rockstar Games, Red Dead Redemption and Playstation 3-only Agent, plus Mafia 2 and one more undisclosed title from 2K Games. In light of Mitchell’s findings, Kaufman Bros. upgraded Take-Two’s rating from Hold to Buy.

"We now look for the release of GTA V in fiscal 2011, and believe IP introduced in fiscal 2010 can be turned into iterative franchises that will improve Take-Two's long-term earnings profile by lessening its dependence on GTA," Mitchell says.

Rockstar, despite all this remains a core component of Take-Two’s business. Mitchell estimated that 44% of a projected $412 million in 2009 revenue will come from Rockstar alone. In years past however, Rockstar has done better; in 2008 when Rockstar released GTA IV, they raised $885 million.