Comments from Research Analyst at Gabelli Funds (Gabelli), Alec Boccanfuso, who covers communications services and technology with a focus on interactive entertainment and outdoor leisure products. Alec’s comments cover Take-Two Interactive (NASDAQ:TTWO) and its update on the the Grand Theft Auto IV game.
Comments from Gabelli Research Analyst, Alec Boccanfuso:
“On December 4, 2023, Rockstar Games, owned by Take-Two, released the first trailer for Grand Theft Auto VI. YouTube announced that this trailer generated over 93M views in its initial 24-hour period, shattering the previous record for a non-music video debut on the platform. The game’s trailer made subsequent shock waves around the social media world, highlighting the importance of the Grand Theft Auto franchise in the entertainment industry. Despite the trailer only have a 1 minute 30 second runtime, both consumers and investors learned a lot about the upcoming title.
First, and perhaps most importantly for investors, the game will be released at some point in 2025. This is what we internally expected based on previous trailer releases and game release cycles from Rockstar. Additionally, Take-Two’s targets for revenue for fiscal 2025 and 2026 seem to back this up. We are still unsure when the game will actually release, whether it be before or after TTWO’s 2025 fiscal year and which ends March 31 2025.
We also learned that the game will be released solely on the new generation consoles, the Xbox Series X/S and PlayStation 5. GTA VI will not be released on PC day one as expect. GTA V came out on consoles in September 2013, with the PC version not coming out until April 2015. We believe that this will once again allow Rockstar to virtually double dip on unit sales, as consumer who purchased on console will probably also want to purchase on PC later on. Additionally, with speculation arising that the new generation consoles will release in 2026, this enables Rockstar to even in some sense triple dip on sales like they successfully did with GTA V. As of now, there is no incremental information on the new era of Grand Theft Auto online, but we expect this to add additional fuel when the time comes to the unparalleled consumer anticipation.
Overall, we are highly encouraged by the trailer itself, the massive subsequent positive consumer reception and the clear dedication Rockstar has put into this game at first glance. We are looking forward to the potential financial impacts that this game could have on Take-Two’s top and bottom lines. For context, Grand Theft Auto 5 has sold in over 190 million units and has generated nearly ~$8B in revenue since its launch in 2013 making it the highest grossing entertainment product of all time. As of now, we expect GTA VI to sell in the range of 35M-40M units within its first year on the market. We believe over the next year further trailers and information releases will excite both consumers and investors.”
