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Take-Two Interactive Software Inc. Message Board

  • telsarowe telsarowe Jan 2, 2013 12:22 PM Flag

    My $50,000+ TTWO bet:

    There is little doubt in my mind that GTAV (Grand Theft Auto 5) will be the highest grossing best selling video game in history. The GTA series has gone beyond cult classic and casual gaming experience. It's now a cultural phenomenon and dare I say a cultural microcosm. No video game has been debated more in the blogosphere, marketsphere, at the dinner table, church pulpit and to some degree the Senate floor. The budget for GTA expands with every game and because the games are released years apart the technology increases dramatically with every game. It's really quite striking playing GTAIII and GTAIV right after one another (as I did to test this out). The refinement in motion control, graphics, speed and depth are very noticeable. GTAV will be the most advanced and best GTA game in every single possible consideration of the word "best".

    Think about it like this; There are 7,000,000,000 people living in the world. Over 125,000,000 copies of the game series have been sold worldwide. As a basic ratio that means that 1 in every 56 people in the world have owned the game. That's absolutely astounding. If you subtract those likely too young to play (say under age 7) or those likely too old to play (say over age 60) that basic ratio goes to 1 in every 35 people in the world owning a GTA series game. If GTAV sells 25M copies that number of those owning a GTA game climbs considerably.

    For a game as violent and morally nihilist as GTA these sales figures are telling. As an aside this recent study made me quite pensive. The recent massacre in Connecticut has broached the subject on censorship controls again with several prominent political figures calling for not just gun regulation but video game regulation. I have not got the slightest concern that this call for regulation is vacuous and will amount to nothing but rhetoric. Public discourse on video game censorship may actually be a advertisement catalyst which would work quite well for GTA.

    -(TAKE) TWO FUN FACTS TO CONSIDER-

    Since the last GTA series game release (April 29th, 2008), tens of millions more game consoles have been sold worldwide.

    The last GTA series game was released at the same time when social media, the smart phone revolution, and free advertising mediums (YouTube et al) were in they're infancy. For a game as culturally polarizing and microcosmic as GTA this cannot be underestimated and is HUGE.

    -ONE TRICK PONY-

    This is company is not. This is a company with the biggest gaming franchise (GTA) and several other blockbuster franchises; NBA2k, Bioshock, Max Payne, Red Dead Redemption, Borderlands, Xcom et al. These games consistently receive rave reviews, score 85% or higher favorably ratings and are nominated for game(s) of the year (Bioshock at one time being touted the greatest game ever made). They are also diverse, with certain games appealing to certain age groups (I'm older and appreciate the philosophical/cerebral themes of Bioshock) and gaming mediums (PC/console). Speaking of game mediums, mobile is a hotspot where TTWO has lagged but is in its infancy with aggressive plans to penetrate and capitalize going forward evidenced by their recent partnerships with Japanese software developers.

    For the franchises TTWO has I believe they are undervalued @ $11 as 2013 will see TTWO deliver solid earnings. A failed buyout bid by ERTS (now EA) in 2008 put a $25 buying price on TTWO's stock price and since then TTWO's gaming prowess has improved considerably.


    -2013-

    TTWO will release Bioshock Infinite in March, GTAV a few months later and then the new gaming consoles from the usual suspects should come late. These are 3 huge catalysts that have lead me to put a $20 price target on TTWO. Too, there is a very high probability of a buyout before GTAV's release. I have purchased $50k worth of March 2013 $13 calls and June 2013 $13 calls combined. I now personally own almost all of the open interest in both of these options.This is along with owning 2k shares @ $11.35.

    Sentiment: Strong Buy

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