'Red Dead Redemption 2' Sold More Than 23 Million Copies, So How Did Take-Two's Stock Price Drop?
Per Take-Two Interactive, Red Dead Redemption 2, Rockstar's sprawling open-world western adventure has sold more than 23 million units worldwide. NBA 2K19 has proven to be its usual financial success and Grand Theft Auto V continues to roll on as the biggest gaming juggernaut in the history of the industry.
So why on Earth would Take-Two be experiencing any kind of decrease in shares?
Apparently, $450 million isn't always good enough for investors. That's especially the case when analyst estimated Take-Two Interactive's revenue for the current quarter to be $601 million. Per Yahoo Finance, that disparity is behind Take-Two's 14-percent shares dip. RDR 2 is still a massive commercial success, though it appears Red Dead Online, the game's purely online feature, might be in a position of stagnation as it's been in beta for three months and counting.
NBA 2K18 sold 10 million copies last year, and NBA 2K19 experienced the most financially successful launch in franchise history. GTA V's longevity is a marvel. Perhaps RDR2's similarities to GTA V and the elevated expectations that come with it are what raises expectation across the entire Take-Two front.
That's likely why Take-Two Chief Executive Officer Strauss Zelnick told Reuters, "We would never want to make the prediction that anything will be as successful as Grand Theft Auto."
Per Yahoo, Take-Two estimates its annual revenue will be between $2.89 and $2.94 billion, which is amazingly still below the $2.98 billion total that was originally delivered as an estimate by analysts.
Electronic Arts, one of Take-Two's chief competitors also experienced a similar dip in shares, but the two firms' issues may not be caused by the same factor. EA looks to have overestimated the financial success of the recently released Battlefield V, and that mildly successful title (by lofty standards) is taking much of the blame for EA's "difficult" third quarter.
Battlefield's sales fell a million copies shorter than its goal, and that could be attributed to a release date that competed with the more fleshed-out Call of Duty: Black Ops 4, Red Dead Redemption 2, and Battlefield V's delay of an uber-popular battle royale mode. Firestorm, their take on the concept, isn't reportedly due out until March.
With BO4's Blackout, the seemingly ever-present Fortnite, PUBG and the newly released smash-hit free-to-play Apex Legends (from EA's own Respawn), Firestorm may come too late to make a significant impact. Thankfully for EA, there is a chance Apex Legends and the upcoming Anthem from BioWare can drive things back upward.
In Take-Two's case, the stumble looks to be more a case of an overestimation of growth from analysts than a potentially flawed creative direction. In any case, the numbers can obviously still affect the perception of the organization to investors.
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