Shares of Take-Two Interactive Software Inc. TTWO hit 52-week highs on Wednesday and continue to trade higher during the COVID-19 pandemic and new console releases.
Will Hershey, the Co-Founder of Roundhill Investments shared his thoughts on Take-Two, which is a top 10 holding of the Roundhill BITKRAFT Esports & Digital Entertainment ETF NERD.
Success of GTA V: Hershey said Take-Two is having success with its "Grand Theft Auto V" game and its strong user engagement online. Hershey said “Grand Theft Auto V” is making so much in recurring revenue it's almost similar to a software-as-a-service company.
“Now you can monetize on an ongoing multiple,” Hershey said.
A new map update is coming to "Grand Theft Auto" online, which is the first major map expansion since the “Grand Theft Auto V” launched in 2013.
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Why They Don’t Need GTA VI: A new game costs more money to develop than putting that money into updates for an existing game. Hershey said this is a continuing trend in the video game market to focus on updates and monetization for existing games instead of releasing games in franchises every year or two.
“They’re not incentivized for new content,” Hershey said.
Esports Opportunity: Take-Two also owns the 2K Sports franchise, which has a partnership with the NBA on the NBA 2K Esports league.
Hershey said the esports that continue to perform are games like “League of Legends” and “Counter-Strike,” which are games you can’t replicate in real life, not sports games like "NBA 2K."
Watch the full interview in the video below:
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