Is Take-Two Interactive the Last Pure-Play Gaming Stock?

European video game developer UbiSoft Entertainment (OTCMKTS: UBSFY) saw its stock plummet last week following a wave of cancellations, most notably of the "Prince of Persia: Sands of Time Remake."

UbiSoft cancelled six games in total and announced a major business reset to shrink its studio count, causing the stock to drop more than 30% in just three days. With Ubisoft in trouble and Electronic Arts Inc. (NASDAQ: EA) soon to become a private entity under the Saudi Public Investment Fund (PIF), Take-Two Interactive Software Inc. (NASDAQ: TTWO) might be the last pure gaming stock left on U.S. exchanges. But does that make it a buy?

A Bifurcated and Shrinking Video Game Industry

The gaming industry has split into two distinct factions: mobile and console/PC. Mobile is the fastest-growing sector, but console and PC gaming remain crucial markets and are increasingly dominated by large-scale intellectual property (IP) franchises.

In the early days of the console wars, independent developers had specialties, such as Squaresoft’s role-playing games like "Final Fantasy." Today, developers like Ubisoft, EA, and Take-Two own numerous studios that produce a wide variety of games, from sports to first-person shooters to action RPGs.

With Ubisoft cutting to five studios and EA going private and tethering itself to sports conglomerates like the NFL and WWE-parent TKO Group Holdings Inc. (NYSE: TKO), Take-Two is quickly becoming the best pure-play for investors who want exposure to the industry.

However, there’s an elephant in the room: the long-awaited arrival of "Grand Theft Auto VI" (GTA6), scheduled for release on Nov. 19. GTA6 has been rife with delays and setbacks, and now the company’s prospects increasingly depend on a smooth launch.

Take-Two’s 3 Pillar Strategy

Take-Two has built itself into a $45 billion company using a multi-pronged strategy that produces massive (but risky) world-building games alongside consistent revenue drivers for both console and mobile gaming platforms. The company focuses on three distinct pillars:

Prestige Games: Take-Two’s biggest winners have come from the renowned studio Rockstar Games, home to classic series like "Grand Theft Auto," "Red Dead Redemption," and "Max Payne." These games often take years (or decades in GTA6’s case) to develop, but they frequently become cultural touchstones that generate massive revenue. GTA5 was released in 2013 and went on to sell 220 million units, with annual sales still totaling over a million annually despite 12-plus years on the market.

Reliable Revenue: Rockstar titles often take multiple years of development, so Take-Two needs some simpler games that can produce recurring annual revenue. This is where the 2K series comes in. Popular games like NBA 2K and WWE 2K are updated and released each year, similar to EA’s annual Madden and NCAA releases. NBA 2K25 sold more than 7 million copies during the fiscal year of its release, down from its peak in 2019 but still a strong driver of reliable sales. The current release, NBA 2K26, has already sold 5 million units as of fiscal Q2 2026.

Zynga Mobile Games: Take-Two purchased Zynga in 2022, and it's been a transformative acquisition. Mobile games offer both additional in-game purchase opportunities (or microtransactions as gamers deride them) and advertising space, and these revenue sources helped the company net more than $1.96 billion in fiscal Q2 2026 revenue, the best second quarter in its history. Mobile games Toon Blast and Match Factory each grew more than 20% year-over-year (YOY), and the mobile version of WWE 2K surpassed 38 million lifetime downloads. The key Recurring Consumer Spending metric also grew 20% in the quarter.

TTWO Stock Consolidating Around Technical Turning Points

In its most recent earnings release, Take-Two bumped its full-year 2026 net bookings guidance to $6.5 billion, thanks to a record Q2, expecting outperformance across a wide range of titles. The company’s fiscal year will end before the release of GTA6 in November, but investors will remain focused on updates on its premier franchise. Meanwhile, the stock has several short-term catalysts, including fiscal Q3 2026 earnings after the market closes on Feb. 3.

The daily chart shows a stock at a crossroads, with the 50-day and 200-day simple moving averages (SMAs) converging ahead of the Q3 2026 release. The 200-day SMA had been a reliable support level as the stock price consolidated, forming higher lows and lower highs. The Relative Strength Index (RSI) is showing signs of turning bullish after nearly dipping into oversold territory, but investors are likely waiting for hints from Q3 earnings before making large bets on TTWO shares.

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