By Jack Hough
Has it really been 25 years since I stole a Mr. Whoopee ice cream truck, rigged it with a bomb, parked it near the docks, and played the jingle to lure rival gang members to murderous, dairy-based doom? Like they say: Enjoy it while you're young. Back then, I had time for occasional grand theft auto, or more specifically, Grand Theft Auto III, a landmark videogame from Take-Two Interactive Software.
GTA I and II in the late 1990s were much simpler, two-dimensional affairs with a top-down perspective. Take-Two bought the studio behind those, and then created Rockstar Games to develop edgy, cinematic titles. GTA III in 2001 was a naughty revelation -- a first-person, three-dimensional, open world of beauty and barbarity. I did things with a rocket launcher and flame thrower that I'm still not proud of -- apologies to the entire Liberty City Police Department. But I also sometimes pulled over my Banshee sports coupe just to admire the sunset, even when I had a four-star wanted level, while "I Ran (So Far Away)" by A Flock of Seagulls played on Flashback 95.6.
GTA III was transformative for Take-Two shares. In the month leading up to the game's launch, they had dipped below $5, split-adjusted. Two decades later, they were at $180, and shareholders had done more than four times as well as the S&P 500 index. But over the past five years, the stock has disappointed, gaining only 28%, while the S&P made 90% including dividends.
I didn't keep up with the franchise -- somewhere around GTA IV, I got married, and before long I was immersed in an even more chaotic open-worlder called parenting. But now I hear that after much delay, a new installment, GTA VI, looks likely to ship in November. And this one seems particularly significant for the struggling stock.
GTA releases used to come fast and furious, you might say -- nearly one a year, counting major and minor titles, over the first decade after going 3-D. Then, after a few quiet years, GTA V launched in 2013, which added a multiplayer mode, now available separately as GTA Online. And there hasn't been a new version in the 13 years since. That's because the online game operates as a continuous moneymaker, like Roblox or Fortnite. New players buy the game; spend on in-game currency to obtain special vehicles, apartments, weapons, and what have you; and pay for monthly memberships for other perks.
Revenue over the past 13 years has multiplied, and growth has gotten smoother. There are good reasons now for a new release. Modernizing the mapping technology will allow for bigger worlds, with better artificial intelligence and physics. A new monetization system could allow Take-Two to draw closer to the lucrative Roblox model of allowing players to create and profit from content, in exchange for a cut. Plus, fans of the series want a new single-player story line, and giving them one will boost upfront game sales.
GTA VI was originally slated to launch last year, but has been delayed multiple times, most recently to this coming November. Recently, a leaked Best Buy email related to imminent preorders was enough to send Take-Two stock 6% higher in a day. The shares aren't obviously cheap at just over 50 times projected earnings for the company's fiscal year through March 2027. But earnings have recently been depressed by high development costs for GTA VI, without corresponding revenue. So after this fiscal year, Take-Two is expected to triple its earnings per share in four years.
Morgan Stanley sees upside, recently reiterating its Overweight call on the stock, with a price target of $280, versus a recent $235. It notes that historically, videogame publisher stocks have risen an average of 18% over the six months prior to highly anticipated launches, but that the peak has actually tended to occur a month before launch, at a 26% gain. Overall yearly spending on console games has more than doubled since GTA V came out, to nearly $40 billion estimated for this year. If GTA can capture the same 10% of the market now that it did then, Wall Street estimates could prove low.
Take-Two reports fiscal fourth-quarter financial results on Thursday after the market close, and could then present financial guidance for the coming fiscal year, including GTA VI results. Prepare for lowballing; on average over the past decade, management guidance has come in 21% below the consensus on earnings per share. But actual earnings have then beaten guidance by 50%.
What might be even more important than financial guidance is any commentary that tells whether the release is still on track for November. I saw that the new game is set in Vice City, based loosely on Miami, whereas back in my GTA III days, Liberty City was more like New York. My first thought was about the state tax savings, which is probably as good a sign as any that my days of carefree videogame criminality remain behind me.
Write to Jack Hough at jack.hough@barrons.com and subscribe to his Barron's Streetwise podcast.
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May 21, 2026 02:00 ET (06:00 GMT)
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