Take-Two Interactive (TTWO): Waiting for GTA VI
1. Executive Summary
The investment thesis for Take-Two is singular and obvious: Grand Theft Auto VI. It is anticipated to be the largest entertainment launch in human history (bigger than any movie or album). The stock is effectively a "call option" on the release date and the subsequent decade of recurring revenue from GTA Online.
Key Thesis Points
- The Supercycle: GTA V generated over $8 billion. GTA VI is expected to surpass this. The release (slated for Fall 2025) provides a massive revenue cliff.
- Mobile Zynga: The acquisition of Zynga (FarmVille) provides stable cash flow to smooth out the lumpy nature of console game releases.
- IP Vault: Beyond GTA, they own Red Dead Redemption, NBA 2K, and Civilization. No other publisher has this depth of "Must Have" AAA titles.
2. Business Overview
- Rockstar Games: The crown jewel studio (GTA, Red Dead).
- 2K Games: Sports (NBA) and Strategy (Civ).
- Zynga: Mobile advertising and in-app purchases.
3. Risks
- Delays: If GTA VI is delayed to 2026 or 2027, the stock will crash in the short term.
- Quality: It must be perfect. Cyberpunk 2077 proved that hyping a broken game destroys the stock price.