Take-Two Interactive’s (TTWO - Free Report) recently released game Grand Theft Auto V grossed $800.0 million worldwide in first-day sales. More importantly, Grand Theft Auto V broke the $500.0 million first day sales record set by Activision’s (ATVI - Free Report) Call of Duty: Black Ops 2 in 2012.
Developed by Rockstar North, Take-Two launched the game on Sep 17 for Sony’s (SNE - Free Report) PlayStation 3 and Microsoft’s (MSFT - Free Report) Xbox 360. Take-Two sold the new game title through 8,300 stores in North America.
Reportedly, Take-Two sold approximately 13 to 14 million units on the very first day. Grand Theft Auto IV had sold a total of 13 million units over a one-year period. Take-Two is set to launch the new game in Japan and Brazil, which will further boost top-line growth going forward.
Grand Theft Auto V has received rave reviews from critics and game analysts. The game received “M” rating from ESRB, which means mature. The new game also includes access to Grand Theft Auto Online, which will be launched on Oct 1, 2013.
The success of Grand Theft Auto V brings new hope for the beleaguered video game industry. Retail sales have been on the decline for the last couple of years due to significant competition from free-to-play games and digital distribution.
Video game retail sales in August increased a modest 1.0% year-over-year after a long gap. Although software increased 21.0% year over year, hardware sales plunged 40.0% due to lower spending on old consoles.
Both Microsoft and Sony are set to launch their new consoles late this year. The successful launch of Grand Theft Auto V suggests that there is pent-up demand for pure console games. We believe that the upcoming release of big console titles such as Battlefield 4 and Call of Duty: Ghosts will benefit from this demand in the holiday season.
We believe that the strong unit sales of Grand Theft Auto V will significantly boost Take-Two’s top-line growth in 2013. Moreover, it will improve its competitive position against the likes of EA and Activision going forward.
Currently, Take-Two has Zacks Rank #1 (Strong Buy).