The shadowy behemoth of the video game industry is Take-Two Interactive ($TTWO), a publisher that doesn't get quite as much publicity as its main competitors Ubisoft, Activision Blizzard, or Electronic Arts. But 2019 has quietly been the year of Take-Two, and before its earnings call tomorrow November 7th, we'll break down why the company is on a hot streak by examining its portfolio and using alternative data.
According to analysts tracked by Zacks, EPS expectations are $1.24.
First off, Take-Two helped launch some heavy-hitting games these last few months. Developers under the 2K brand (Visual Concepts, Hanger 13, etc.) and a partnership with Gearbox Software all released follow-ups that will undoubtedly be best-sellers by the end of the year. Borderlands 3 and NBA 2K20 alone would be enough to dominate a calendar but with the continued success of GTA V and GTA Online, and Red Dead Redemption 2 and Red Dead Online, Take-Two is sitting on multiple cash cows that will carry them into the future on a healthy amount of incoming capital.
The Diamond Casino & Resort update rolled out in July recorded GTA Online’s highest player engagement and daily active users, weekly active users and monthly active users. - Yahoo Finance
2K Games has over a thousand staffers, and Rockstar Games has a cool 3,000+ employees. This puts the total number at well over 5,000 and considering there's going to be games coming from Ghost Story Games, 2K Marin, Firaxis, and others in the coming quarters, we expect even more hires to close out development on some unannounced titles.
Hiring is at an all-time high, compared to the last few years of data we tracked. Game development tends to have a lot of hiring as games ramp up internally, including freelancers and contract gigs, leading to a cleanse of sorts when the game ships. But with so many live service games like GTA and Red Dead's Online modes, there may be a need to keep talent around for much longer in a game's life cycle.
Finally, you can see in both the charts above and below just how powerful the IP/brands are for Rockstar's games and the Borderlands and NBA 2K franchises. These are massive titles in the gaming world, and we only expect more money to pour in from microtransactions and DLC sales going forward.
About the Data:
Thinknum tracks companies using the information they post online - jobs, social and web traffic, product sales and app ratings - and creates data sets that measure factors like hiring, revenue and foot traffic. Data sets may not be fully comprehensive (they only account for what is available on the web), but they can be used to gauge performance factors like staffing and sales.