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Several indicators suggest that the release of Grand Theft Auto VI will be a blockbuster.
The video game publisher is already seeing success, as fiscal first-quarter revenue rose 12% year over year.
Take-Two raised its revenue outlook for the fiscal year, but its business isn't profitable.
Video game publisher Take-Two Interactive Software (NASDAQ: TTWO) is approaching arguably the biggest release in its history with Grand Theft Auto (GTA) VI. The company announced a launch date of May 26, 2026 for the title.
Take-Two reportedly spent over $1 billion to create the game. While that's a substantial sum, the previous entry in the franchise, GTA V, has pulled in around $10 billion in sales since its debut in 2013.
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With the arrival of GTA VI on the horizon, is now the time to buy Take-Two shares? To address this question, here's a deeper look into the company.
Image source: Getty Images.
The success of the Grand Theft Auto series is critical to Take-Two. Upon GTA V's launch, the franchise accounted for nearly 70% of the company's sales in its 2014 fiscal year.
More than a decade later, GTA products still represented 15% of revenue in Take-Two's fiscal first quarter, ended June 30. The company produced $1.5 billion in Q1 sales, a 12% year-over-year increase.
Indications already suggest that GTA VI will be a hit. Fan anticipation for the game is high. Its second trailer, released in May, is the biggest video launch of all time, according to Take-Two, with 475 million views in the first day. For comparison, 2024's Deadpool & Wolverine movie trailer reached 365 million views in the first 24 hours, which made it the most-watched film trailer in history at the time.
In addition, GTA V remains among the top three best-selling video games of all time, accounting for over 215 million units sold. The entire GTA franchise has achieved sales of 455 million units. In contrast, Minecraft has sold around 300 million units.
The company has additional irons in the fire aside from GTA VI. Two other successful franchises are launching new titles in September. The sports game NBA 2K26 comes out on Sept. 5, and the looter-shooter Borderlands 4 arrives Sept. 12.
The releases are expected to boost revenue in the fiscal second quarter, ending Sept. 30, to a range between $1.65 billion and $1.7 billion. That would be a strong increase from sales of $1.3 billion in the prior fiscal year.
With the impending titles and Take-Two's excellent Q1 sales, the company raised its fiscal 2026 revenue outlook to between $6.1 billion to $6.2 billion, up from fiscal 2025's $5.6 billion.
Despite the sales growth, Take-Two's business isn't profitable. It exited fiscal Q1 with a net loss of $11.9 million. However, that figure is a substantial reduction from the $262 million loss in the prior year, which is a sign that the company has a shot at turning a profit soon.
In fact, Take-Two achieved operating income of $21.6 million in fiscal Q1. That's a dramatic turnaround from the previous year's operating loss of $184.9 million.
A tailwind to Take-Two's ability to achieve profitability lies in digital content sales. People are overwhelmingly opting for digital downloads instead of buying a physical game disc, and digital products deliver higher profit margins to Take-Two.
In fiscal Q1, digital sales represented 98% of the company's $1.5 billion in revenue. When GTA V was released, digital comprised only 16% of revenue. This means GTA VI is likely to contribute greater profit than its predecessor.
Given Take-Two's many positives and the imminent release of Grand Theft Auto VI, the company looks like a worthwhile investment. But the stock is up 26% this year through the week ending Aug. 15. You have to wonder if now's the best time to scoop up Take-Two shares.
To assess the situation, let's examine the stock's price-to-sales (P/S) ratio, which measures how much investors are willing to pay for every dollar of revenue generated over the trailing 12 months.
Data by YCharts.
The chart shows that Take-Two's P/S multiple has increased steadily over the past year, indicating that shares are not cheap. This suggests that the anticipated sales boost from upcoming popular titles, including GTA VI, may already be priced into the stock.
Of course, if sales of GTA VI exceed expectations, Take-Two's share price is likely to rise. One approach to address the situation is to use dollar-cost averaging. Purchase some shares now, and gradually build your position over time, which takes the guesswork out of whether to buy now or wait for the stock price to dip.
Since the video game sector's sales surpass the film, music, and book-publishing industries combined, and considering the enduring popularity of the Grand Theft Auto franchise, investors have strong reason to anticipate that GTA VI will be a key driver of Take-Two's revenue growth next year.
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Robert Izquierdo has positions in Take-Two Interactive Software. The Motley Fool has positions in and recommends Take-Two Interactive Software. The Motley Fool has a disclosure policy.
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