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Take Two's Private Division to Publish Disintegration in 2020

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Take Two Interactive (TTWO - Free Report) arm Private Division and V1 Interactive recently announced Disintegration, which is set to launch in 2020.

The new sci-fi, first-person shooter game is the first video game from the independent development studio V1, which is co-founded by Marcus Lehto, former creative director of Bungie and co-creator of Halo.

Further details of the game will be revealed at gamescom2019, scheduled between Aug 20 and Aug 24.

Take Two’s Expanding Portfolio: Key Catalyst

Take Two’s robust slate of releases that includes Ancestors: The Humankind Odyssey, Borderlands 3 and The Outer Worlds is a key catalyst.

Notably, Ancestors: The Humankind Odyssey is set to launch on Aug 27 for PC and will be available through Epic Games Store. Moreover, Borderlands 3 is scheduled for launch on Sep 13. The most popular title in the series, Borderlands 2 (launched in 2012), has sold more than 20 million units.

Last month, Take Two announced that The Outer Worlds will be available on the Xbox devices, PlayStation 4 and Windows PC on Oct 25, 2019. The new, single player, sci-fi roleplaying game (RPG) is one of the two original IPs, Ancestors: The Humankind Odyssey being the other, 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%.

We expect addition of Disintegration to further drive Private Division’s bookings in fiscal 2021.

Portfolio Strength to Fend Off Competition  

Take Two faces significant competition from the likes of Activision , Electronic Arts (EA - Free Report) and Gluu Mobile in the video game space.

Activision is set to release Call of Duty: Modern Warfare on Oct 25, 2019. EA also has a solid line-up of releases, including The Sims 4 Island Living expansion pack and VOLTA Football mode to FIFA 20, which are expected to boost engagement levels.

Despite Take Two’s robust slate of releases, we expect stiff competition from Activision and EA to hurt top-line growth in the near term.

Currently, Take Two has a Zacks #3 (Hold), while both Activision and EA carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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