Take-Two owns one of the largest entertainment franchises out there in Grand Theft Auto. The newest entry, GTA 6, launches this November. There is enormous hype for the new game, which is expected to sell millions of copies at launch and break records. In short, it's expected to be a once-in-a-decade (if not ever) kind of title. The game is also coming to market with a lot of positive sentiment and excitement. If you're a Take-Two shareholder, however, the past year has been a big bummer. Take-Two's share price has slid about 15% so far this year and is down about the same over the past year, meaning anyone who invested in the past year has lost money (at least on paper; gains or losses are not realized until positions are sold) in the run-up to GTA 6's release in November.
What's going on here? There are plenty of factors involved in what could be driving Take-Two's stock price down, and plenty of reasons that this could ultimately just be a short-term blip.
Zooming out
First, it's important to zoom out. In the past five years, Take-Two's stock price is up 39%. That is short of the growth of the S&P 500 (+73% over the past five years), but it's still very solid for a single stock in a competitive field.
Going back even further shows even greater gains for anyone who bought and held Take-Two. For example, after Strauss Zelnick and his team at ZelnickMedia successfully completed a hostile takeover of Take-Two in 2007, the stock exploded in price. Take-Two shares were trading at around $20 back then. Today, Take-Two trades at around $215. When GTA 5 launched in 2013, Take-Two was trading at about $18. Clearly, the stock did gangbusters since then, continuing to surge over the years as Take-Two expanded its portfolio to include numerous other heavy hitters while increasing profitability with microtransactions and recurring revenue.
So why is Take-Two stock down this year?
Take-Two, along with other game companies like Roblox, got hammered in January this year when Google announced its new AI-powered vibe-coding Genie technology, which the company said was capable of building games. Investors freaked out, thinking, or hedging, that an offering like Genie might be able to make competitors or contribute to an environment that eats away at the market share of heavyweight incumbents like Take-Two. Experts said that thesis was obviously wrong, but the market spoke, and Take-Two saw billions in market cap wiped out. Prior to the Genie announcement, Take-Two was trading at a 52-week high of $265, and the company has not recovered since then, at least in terms of its share price.
Rhys Elliott of Alinea Analytics told GameSpot, "The stock market largely has no bloody idea what's going on with games."
"It's fickle and reactive, so trying to reverse-engineer its logic on this stuff rarely works out," he said. "The stock market doesn't really grasp the gravity of a GTA launch, including the cultural weight, the install base, and the years of guaranteed revenue that follow. The negative stock reaction is more to do with headlines about leaks and rumours."
Something else that's playing a role in Take-Two's stock price is the price-to-earnings multiple, or P/E ratio, which Elliott said is "very high." A P/E ratio is determined by the formula of the stock price divided by earnings per share. Having a high P/E ratio suggests investors see significant growth ahead, but with that also comes greater volatility.
"When a stock is that richly valued, even minor negative news can trigger a pullback, even if consumer demand hasn't actually changed," Elliott explained.
GTA 6 hype isn't juicing the stock
GTA 6 is expected to be an enormous, monumental success. It's reportedly already sold 5+ million copies through preorders, generating more than half a billion dollars. By launch, the game could reach 25 million preorders, bringing in $2 billion in revenue and paying for the game's entire development budget. These are positive signs that sound like they would resonate with investors.
Rockstar finally lifted the veil on GTA 6 in the most detail yet through an "Extended Look" trailer in partnership with Netflix in August. People ate up the footage, and this event was so positively received that Xbox and PlayStation console orders surged as people sought out a new system to play the game on. Again, that all sounds like a showing of strength that could attract new investors or for existing stock owners to increase their positions. But no, since the GTA 6 Netflix event, Take-Two's stock has only declined further.
So what gives? The stock market can be fickle. As Jeff Bezos famously said when Amazon's stock was in the toilet, "The stock is not the company and the company is not the stock." The billionaire executive said this when Amazon's stock was diving at the same time that the retail giant's internal numbers were moving in a positive direction. People who held Amazon stock through the market choppiness were handsomely rewarded: Amazon today trades at more than $250/share, which is up 50% in the past five years and up 4,500% since 2010.
For his part, Elliott told GameSpot that the many GTA 6 leaks, reportedly stemming from a security breach, leading up to the Extended Look trailer on Netflix "rattled a lot of investors." He said investors generally don't like when a company displays a "loss of control over a product," especially one as valuable as GTA 6. Take-Two is undertaking efforts to find the person or people responsible for the GTA 6 leaks, but as of yet, no one has been identified. GTA 6 also suffered a major breach in 2022, with Take-Two eventually finding the person responsible.
Big banks generally agree that Take-Two today is oversold--a stock that consensus says is dropping too fast and not in line with business fundamentals--with numerous analysts issuing "Buy" ratings and lofty price targets for the stock. JP Morgan, for example reiterated a Buy rating with a price target of $310. Bank of America, meanwhile, held its Buy rating for Take-Two and issued an even richer price target of $368. A Wells Fargo stock analyst is also bullish, with a $293 price target. In short, the stock analyst consensus is that Take-Two has significant upside potential, making it an attractive investment in the lead-up to GTA 6's release.
How can Take-Two get there?
Rockstar and Take-Two have so far only discussed GTA 6's single-player mode. In fact, the game is being officially marketed to consumers as a "single-player experience." But everyone knows that GTA 6 will eventually have an online multiplayer mode given the enormous commercial success of GTA Online. A recent leak said GTA Online generates more than $1 million per day, and that's today, some 13 years after the game launched.
In 2014, Zelnick referred to GTA Online as "the gift that keeps on giving" as it relates to ongoing spending via microtransactions. In short, it's a cash cow, and a high-margin one at that. While fans wait to hear what Rockstar may have in store for GTA 6 with regards to online support, the existing GTA Online is expected to have another banger year in 2026. Bank of America recently raised its GTA Online revenue forecast by a whopping $900 million to $2.2 billion for fiscal 2026 due in part to GTA 6's release having a positive halo effect on GTA Online.
Elliott went on to say rumors of a possible delay for GTA 6's online mode "created short-term panic" among Take-Two investors, which contributed to the lagging share price. "This is a stock that's already been burned by delays twice, so any whiff of another is ringing alarm bells," he said.
To be sure, GTA 6's online has not been delayed, at least not publicly, in part because it hasn't even been announced yet. Analysts should not be surprised that GTA 6 won't launch with an online mode, though, as Rockstar employed a similar strategy with both GTA Online and Red Dead Online--neither of those games launched alongside their single-player experiences.
It remains to be seen how GTA 6 Online could be monetized, but Rockstar has already shown signs that it is taking steps to make more money per user on GTA 6. To begin with, GTA 6's base edition is $80, which is $20 more than what GTA 5 cost at launch in 2013. Then there is GTA 6's $100 Ultimate Edition, which includes exclusive content.
Rockstar and Take-Two also stand to make more money on GTA 6 because the game will not be sold on a disc anywhere, thereby allowing the company to capture more profit by virtue of lower fees paid to other sources. GTA 6 will still be sold in stores, but only the $80 edition will be available, and it only comes with a code in a box. The $100 Ultimate Edition, meanwhile, is seemingly bypassing retail entirely, as no retailers have any listings for it.
GTA is a small piece of Take-Two
Take-Two may be best known for the GTA franchise, but it's a highly diversified company. Take-Two has 15 franchises with individual titles that have sold more than 5 million units, including GTA and Red Dead, of course, along with NBA 2K, Borderlands, BioShock, Mafia, and Civilization, just to name a few. Additionally, Take-Two owns Farmville developer Zynga, and its franchises have collectively exceeded 10 billion downloads. Other factors potentially contributing to downward pressure on Take-Two's stock could be Civilization 7 and Borderlands 4 seemingly missing sales targets, at least initially, while Take-Two still hasn't provided specifics on what's coming next for some of its other giant franchises, BioShock and Mafia, to name a few. Then there are also the general macroeconomic factors that are putting pressure on stocks across the entire market.
The GTA franchise at Take-Two accounts for less than 15% of the company's total revenue, though that number is for a typical quarter--when GTA 6 launches, it will significantly increase. Many industry watchers, including CNBC's Andrew Ross Sorkin, have observed that news about GTA tends to push Take-Two's stock up or down. Zelnick pushed back and said Take-Two mainly trades on its earnings, and that may be true in the long term, but it's also true that after Rockstar delayed GTA 6 to November 2026, Take-Two's share price dove.
But, again, the stock market is fickle. There is a famous Benjamin Graham saying that posits, “In the short run, the market is a voting machine but in the long run, it is a weighing machine.”
This means, in essence, that a stock's price can fluctuate--sometimes wildly--based on emotional trading on news events like, say, GTA 6 getting delayed, even though everyone knows the game is still coming out and is expected to be one of the biggest entertainment releases ever. However, a company's core fundamentals--including cash flow, revenue, and profits--will ultimately determine the "true" value of a stock. Elliott told GameSpot that he believes the Take-Two sell-off in the past year has been an example of this.
"The thing that matters for the bottom line--that GTA 6 will be the biggest entertainment release ever--barely registers day to day for many."
Zelnick said expectations for GTA 6 are, naturally, "very, very high." However, he admitted that if GTA 6 doesn't live up to the hype or commercial expectations, "We still have an enormous business in mobile, console, and PC, outside of all things Grand Theft Auto. We have diversified the company meaningfully."
