By all accounts, it is incredibly likely that Grand Theft Auto 6 will be getting announced within the next year, potentially much sooner than that, and getting released within the next few years.
Take Two Interactive (TTWO) is the parent company of Rockstar Games, the developer of Grand Theft Auto games. TTWO also owns the developer of the worlds most popular Basketball series NBA2K. However, my thesis for the stock is based on the upcoming announcement and eventual release of Grand Theft Auto 6.
The company TTWO is currently valued at a market cap of 20 billion. For comparisons sake, this is less than one third of Activision Blizzard - the company that owns the developers of games such as Call of Duty and Diablo. Whilst these games are huge, no single entry in any of these games has ever come close in sales to the latest Grand Theft Auto release, Grand Theft Auto 5. In fact, Grand Theft Auto 5 is currently the second highest sold video game of all time, a close second to Minecraft.
For all of Grand Theft Auto 5's success, I believe the next entry in the game is likely to break its records. Despite the developers silence, the future release is very widely discussed, and I think it is fair to say that it is one of the most anticipated games, if not THE most anticipated game, in history. Everyone and their mother has heard of the Grand Theft Auto series, and after the success of GTA 5, there is no doubt that everyone will be rushing to buy GTA 6 when it is finally released. Both Rockstar Games and Take Two Interactive will also know exactly how to cash in on the eventual success of the next entry, as they have with GTA 5 - they will milk every penny out of the player base in the form of paid DLC & online add-ons.
For the argument that GTA 6 is already "priced in" to TTWO stock, I find this argument unconvincing. Currently, TTWO is trading at around the same levels it was almost 6 years ago. In addition, one could have made the same argument about GTA 5 being priced in 10 years ago, yet upon the release of the game the share price had a steady climb and ended up almost doubling a year after its release. Unlike games such as Call of Duty which come out every year, I do not believe that the release of future GTA iterations is priced in to the stock at all times. These games come out very infrequently (see how its already been 10 years since the last entry in the series), and what is more, it is much less clear what to expect from each iteration. Like I said at the start, TTWO is currently valued at 20 billion, and if Grand Theft Auto 6 exceeds expectations? Well, I personally believe it could go a heck of a lot higher than that. NFA.
[link] [comments] https://www.reddit.com/r/stocks/comments/12zs8jq/is_ttwo_undervalued_how_to_profit_off_of_gta_6s/
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