Hit Western Videogame Drives Profits at Take-Two
YOUNG MONEY Staff
6 September 2010
When Take-Two releases GTA games, it makes huge profits; so much so that Electronic Arts once attempted to take over the company for $2 billion, or $25.74 per share. Management resisted, however, and the company's shares have struggled ever since, slumping as low as $6.
In years without a GTA game, though, it typically struggles.
With its latest game Take-Two took the industry and the markets by surprise. Rockstar San Diego's Red Dead Redemption, a Western open-world epic in the style of The Good, the Bad and the Ugly or Deadwood, has garnered universal critical acclaim, including rave reviews from mainstream outlets like the New York Times. Red Dead Redemption and its grizzled hero John Marston sold two million copies in its first month.
The game's sales helped Take-Two beat analysts' expectations of losses of 20 cents per share, instead posting profits of 14 cents per share; not a huge amount, but far better than third-quarter 2009 losses of 68 cents per share.
The company has a few more rounds left its six-shooter, too: It recently released a sequel to the cult hit Mafia, and it's scheduled to release NBA 2K11 and Civilization V, the latest iteration of Sid Meier's incredibly popular strategy series, this year.
Finally, the company released some news that upended the gaming media on Friday: next year, it will publish Duke Nukem Forever, a famous sequel that was so long in development it became a byword for vaporware: software which is endlessly promised but never materializes. The news surprised almost everyone in the industry, which had long ago written the game off.
Take-Two still has hurdles to overcome; a culture of auteurs and perfectionists in its star Rockstar Studio has led to endless delays (Red Dead Redemption was stalled for years before it was finally released), and declining sales in the videogame sector as a whole threaten profitability.
But its backers, including the takeover king Carl Icahn, appear to have faith in the company. And there's always takeover speculation to keep the stock trading upwards - "We expect the company could be acquired, if share price levels remain low into the release of Grand Theft Auto V," Mike Hickey, an analyst with Janco Partners in Greenwood Village, Colorado, told Businessweek / Bloomberg today.
Beck Bamberger career career coach Careers collection agency credit card credit report credit score debt debt consolidation debt counseling Derek Hoffman employment entrepreneur profile Entrepreneurship Facebook financial literacy find a job get out of debt health insurance internet scams Investing Laura Tirello life coach marketing Mike Michalowicz Money Management mortgage new company paying for college personal finance recession save money saving money Shopping social media start a business student loans the edge Toilet Paper Entrepreneur Travel unemployment video young entrepreneur young entrepreneurs
- Most Read
- Most Emailed
- Most Comments
Financial help Center