3 Reasons Why Grand Theft Auto's Publisher May Struggle This Year
If you have owned a game console anytime in the last few years, you've likely either played or heard about the "Grand Theft Auto" series from Take-Two Interactive Software . In fact, Grand Theft Auto V was a huge part of Take-Two's massive holiday sales. However, there are at least three reasons that investors may want to take five on Take-Two this year.
It's a huge success! Now what?
It's no secret that Grand Theft Auto V is a huge hit. The title was a big part of why Take-Two's revenue jumped almost 90% in the current quarter, and strong releases from NBA 2K14 and WWE 2K14 also helped.
With players trying to decide what title to buy, the fact that Grand Theft Auto V took on other titles and won is a big deal for Take-Two in the short-term. Call of Duty: Ghosts was also released by Activision-Blizzard in the last quarter of 2013. Electronic Arts got into the act with strong sales of Madden NFL 25, Battlefield 4, and FIFA 14 on the PlayStation 4 and Xbox One consoles in particular.
Long story short, Take-Two's "Grand Theft Auto" franchise is strong and should continue to drive results. While Grand Theft Auto Online is expected to help the company going forward, there is a big problem. Take-Two has already confirmed there will not be a sequel to the "Grand Theft Auto" franchise for 2014. This is the first reason Take-Two may struggle this year. A title that produced over $1 billion in sales in the first 3 days won't be refreshed in 2014.
While some gamers complain about games being refreshed annually, Activision-Blizzard and Electronic Arts have proven annual game releases work with their "Call of Duty" and EA Sports businesses. Take-Two needs to get the point and speed up development of the next "Grand Theft Auto" title.
Online gaming is the future!
There seems to be a continuing shift in the gaming industry where even traditional single-player games are being updated to feature online multiplayer as a key selling point. In addition, there are existing subscription based franchises that are being constantly refreshed to keep players coming back.
The second reason Take-Two could struggle this year is, the company expects Grand Theft Auto Online to pick up where Grand Theft Auto V left off. While this online title may help, there are far too many online and multiplayer games for players to simply ignore them in favor of Take-Two's franchise.
During 2014 alone, Activision-Blizzard plans on releasing an update to Diablo III with the Reaper of Souls expansion. The company also will be releasing Hearthstone: Heroes of Warcraft, which is expected to become another huge hit for the company. In addition, games with both single player and huge multiplayer experiences like another "Call of Duty," a "Battlefield" sequel, and a new title from Activison-Blizzard called Destiny will all come to play.
This doesn't even account for smaller publishers releasing online games like The Elder Scrolls Online. With millions of fans of each of these existing titles, and huge potential behind newer releases, it will be difficult if not impossible for Grand Theft Auto Online to stay at the top of its game.
Time to Evolve
The third problem facing Take-Two for 2014 is one of the major titles Take-Two is betting on in the fall of this year is the online multiplayer game Evolve. While the graphics look good, and some might like the almost Phil Robertson-esque look of one of the characters in particular, the story appears to need work.
Evolve pits four soldiers that have their own tactical assignments like trapper, medic, support, and assault, against a player-controlled monster. In theory the game is unique because usually the "bad guy" (the monster in this case) is computer controlled. While this is a unique take on a multiplayer game, it begs the question of how long will gamers stick with this?
In theory there are five distinct experiences (each of the four soldiers and the monster.) However, the game will need to evolve, pun intended, for players to keep at it. If the game plays the way it looks, the soldiers versus the monster or the monster versus the soldiers, it could get old very quickly.
The bottom line is, in the video game industry gamers have a, what have you done for me lately mentality. Grand Theft Auto V is a huge hit, but if Evolve and others don't live up to expectations, 2014 could be a tough year for Take-Two.
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The article 3 Reasons Why Grand Theft Auto's Publisher May Struggle This Year originally appeared on Fool.com.Chad Henage has no position in any stocks mentioned. The Motley Fool recommends Activision Blizzard and Take-Two Interactive. The Motley Fool owns shares of Activision Blizzard. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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