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TTWO Launches NBA 2K14 for Next-Gen Consoles - Analyst Blog

Posted: 11/19/2013 6:06:00 PM
Referenced Stocks: ATVI;EA;SNE;TTWO

Take-Two Interactive Software, Inc. ( TTWO ) recently launched the next-generation console version of NBA 2K14 for Sony's ( SNE ) PlayStation 4. The game will also be available for Xbox One starting today. NBA 2K14 released on Oct 1, 2013 secured a metacritic score of 84.

The next-gen NBA 2K14 delivers an enhanced gaming experience. Its dynamic gameplay engine has been upgraded with the help of ECO-Motion Engine to portray player emotion and enhanced controls. The eco-motion engine also enables better control on the game.

NBA 2K14 launch on the new consoles is expected to drive Take-Two's market share in the near term. We believe that Take-Two has a decent lineup of new games, which will boost its top-line growth in the upcoming holiday season.

According to Gartner video gaming industry sales is expected to reach $93.0 billion at the end of 2013, up from $79.0 billion in 2012. Moreover, the console market is expected to touch $111.0 billion by the end of 2015, which will in turn positively influence the purchase of new console games.

We believe that this presents significant growth opportunity for Take-Two going forward. The company's latest release Grand Theft Auto V received rave reviews. In the recently concluded fiscal 2014, revenues surged 340.3% year over year to $1.27 billion.

This also helped Take-Two to provide an optimistic outlook for fiscal 2014. The company expects non-GAAP net revenue to be in the range of $2.20 to $2.30 billion, while earnings are expected to be in the range of $3.50 to $3.75 per share.

Although the company has a decent product portfolio, stiff competition from game developers such as Electronic Arts ( EA ), Activision Blizzard Inc. ( ATVI ) and social gaming companies such as Zynga remains a major headwind in the near term. Moreover, a fragmented gaming industry may temper growth prospects to a certain extent.

Take Two has a Zacks Rank #3 (Hold).

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