Take Two Interactive (TTWO - Free Report) recently announced that The Outer Worlds will be available on the Xbox devices, PlayStation 4 and Windows PC on Oct 25, 2019. The game is now available for pre-order.
The new single player sci-fi roleplaying game (RPG) is one of the two original IPs, Ancestors: The Humankind Odyssey being the other one, which Take Two’s Private division will publish this year.
The Outer Worlds expands Take Two’s RPG portfolio. The game is expected to be one of the largest contributors to net bookings along with the likes of NBA 2K, Red Dead Redemption 2, Red Dead online, Borderlands 3, Grand Theft Auto Online and Grand Theft Auto 5 (GTA 5) for fiscal 2020.
Take Two projects net bookings between $2.5 billion and $2.6 billion for fiscal 2020. While 2K (publisher of Borderlands franchise) and Rockstar (publisher of GTA and Red Dead Redemption franchises) are expected to account for 60% and 30% of net bookings, respectively, Private division is anticipated to contribute 10%.
Notably, the company reported net bookings of $2.93 billion, up 47% year over year, in fiscal 2019. The record bookings were driven by solid demand for Red Dead Redemption 2 and strong growth of NBA 2K.
Expanding Portfolio: Key Catalyst
Take Two’s growth is primarily driven by its popular franchises — GTA, Red Dead Redemption and NBA. The company’s robust slate of releases that includes Borderlands 3, Ancestors: The Humankind Odyssey and The Outer Worlds is a key catalyst.
Notably, Borderlands 3 is scheduled for launch on Sep 13. This first-person shooter RPG franchise has sold more than 43 million units worldwide. The most popular title in series Borderlands 2 (launched in 2012) has sold more than 20 million units.
Moreover, Ancestors: The Humankind Odyssey is set to launch on Aug 27 for PC and will be available through Epic Games Store. Additionally, the game will be available on PlayStation 4 and across the Xbox One devices in December 2019.
Further, acquisition of Barcelona-based free-to-play mobile game developer, Social Point, is helping Take Two fast penetrate the rapidly growing mobile gaming market. Social Point also has a robust slate of new releases (more than 10 games) for the remainder of 2019.
Portfolio Strength to Fend Off Competition
Take Two faces significant competition from the likes of Activision (ATVI - Free Report) , Electronic Arts (EA - Free Report) and Gluu Mobile (GLUU - Free Report) , among others.
Although lack of a major release, particularly from the Blizzard division, is a headwind for Activision this year, EA has a solid line-up of releases, including the upcoming second season of Apex Legends, The Sims 4 Island Living expansion pack and VOLTA Football mode for FIFA 20.
Nevertheless, we believe Take Two’s portfolio strength based on its robust slate of releases to provide it a competitive edge.
Currently, Take Two has a Zacks #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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