Take-Two is one of the larger third-party video game publishers and owns one of the largest most well-known video game franchises in “Grand Theft Auto.” With the acquisition of Zynga, the company is now also one of the largest mobile game publishers. The firm is well positioned not only to capitalize on the success of GTA but also to continue diversifying its revenue beyond its signature franchise. Take-Two should continue to benefit from the high demand for consoles, the ongoing revitalization of PC gaming, and the growth of mobile gaming.
Take-Two has capitalized on the shift within the industry toward a bifurcated market consisting of major AAA blockbuster titles on one side and smaller independent games on the other. Take-Two generally focuses on the higher end, using both its capital to fund the higher budget blockbusters and its marketing advantage over independents in terms of both budget and established networks to support its titles. Over the past 10 years, the firm has established new franchises such as Borderlands while reinvigorating older ones like Xcom. The company continues to invest in new intellectual property and to fund its development via sequels and expanding its core franchises onto mobile platforms. The Zynga acquisition will speed up the process of creating mobile versions of the franchises.
Like its peers, the firm is focused on engaging users beyond the initial game sale via widening the monetization window by expanding the use of multiplayer options and releasing downloadable content, or DLC. Online game modes lead users to develop social networks thus encouraging player loyalty. DLC can either refresh the multiplayer experience by introducing new maps and increasing the level cap or extend single-player engagement by extending the storyline. Take-Two introduced a separate multiplayer mode, GTA Online, with the launch of GTA V in 2013. The mode has helped this installment sell over 145 million units by expanding its life cycle and monetization. As a result, GTA V launched onto its third generation of consoles in March 2022, likely pushing the potential launch of GTA VI out into fiscal 2024.
Opportunities:
- Take-Two has established newer large franchises, such as “Borderlands,” while revitalizing older ones, such as “Xcom.”
- “Grand Theft Auto” is one of the largest and best-known video game franchises, with more than 345 million units sold over its life.
- The introduction of “GTA Online” in “Grand Theft Auto V” enabled the firm to monetize the game beyond the initial sale.