- With a light release schedule this year, Take-Two Interactive (TTWO -4.9%) is more dependent on revenue from its cash cow Grand Theft Auto Online, and that's raised concerns that have spurred a slump in its third day so far this week.
- The company and its GTA free play mode are facing hot competition from smaller but rapidly growing survival games like PlayerUnknown's Battlegrounds and Fortnite: Battle Royale.
- The company has 5% of its EPS at risk from the competition, says Morgan Stanley (NYSE:MS)'s Brian Nowak -- relatively light considering the competition for player attention those rivals present. Fortnite has 45M registered free users and PUBG has sold 30M units.
- That EPS risk is modeled on a 10% drop in in-game monetization, he says (Fortnite and PUBG each generate about $1.2B in in-game and digital revenue).
- M-Science also wrote a cautious note on TTWO today.
- Moving possibly in sympathy: EA -1.3%; ATVI -2.2%.
- Now read: Activision Blizzard: An Undervalued Microtransactions Machine
Original article