Although analysts are often dubious on Take-Two's earnings power in years with no major GTA
release, Kaufman Bros. analyst Todd Mitchell says the publisher will be profitable in fiscal 2010 even with no Grand Theft Auto V
"We believe concerns that there would be no GTA V
in fiscal 2010 and that Take-Two was too dependent on this IP have weighed on the stock," says Mitchell, as Kaufman upgraded its rating on the company from Hold to Buy.
"Take-Two is successfully diversifying away from its dependence on GTA," he adds, anticipating strong sales of BioShock 2
and the release of two other Rockstar titles, Red Dead Redemption
and PlayStation 3-exclusive Agent
, plus Mafia II
and an unannounced title from 2K Games.
There's also GTA: Chinatown Stories
for the PSP, Mitchell adds, also factoring in the release of new GTA
episodes including The Ballad Of Gay Tony
"We now look for the release of GTA V
in fiscal 2011, and believe IP introduced in fiscal 2010 can be turned into iterative franchises that will improve Take-Two's long-term earnings profile by lessening its dependence on GTA
," he says.
Rockstar's work is a core component of Take-Two's business nonetheless, the analyst says, estimating that 44 percent of a projected $412 million in 2009 revenue will come from the well-reputed label, just about half of that from catalog sales.. Compare that to 2008's GTA IV
release, however, when Rockstar accounted for $885 million.