The video game industry can be a tough place to thrive, and even when a company does succeed, there’s still no guarantee that their investors will see the situation the same way. Take-Two Interactive just experienced that firsthand. The publishing giant recently released their third-quarter earnings report, highlighting sales and revenue data from October 1st – December 31st, 2018.

The report shows that Red Dead Redemption 2 has sold-in 23 million copies, massively driving revenue for the company. In fact, revenue for that holiday period was $1.2 billion, up $480 million from last year. CEO Strauss Zelnick sees this as a big victory, telling CNBC that the company performed well during the quarter and expects a record year.

“So we crushed the quarter. We had great results across the board and we issued an outlook for the full year that says we’ll have a record year in terms of net bookings and cash flow provided by operations. We sold 23 million units of
Red Dead Redemption. It’s a massive hit.” — Strauss Zelnick

Investors apparently see things differently. Despite the fact that Take-Two reported higher sales than they previously anticipated (and raised their sales forecast for the full year), their stock has absolutely tanked. At the time of writing, Take-Two’s stock has dropped by an incredible 14.85%, effectively erasing over 1/7 of the company’s market value.

As Niko Partners Analyst Daniel Ahmad explains, Take-Two is one of many AAA companies experiencing a stock drop recently as they are under-performing relative to market growth. Take-Two is doing better than they expected… but investors expected even more based on the market, and now they’re disappointed despite the fact that Take-Two surpassed all of their targets.

No
Our Verdict

Top

Ben Lamoreux

Comments

Comments are closed.

You may also like

More in News