Take-Two Interactive Software (TTWO) CEO Strauss Zelnick knows what a hit video game looks like...
Since 2007, the company has put out major titles like Red Dead Redemption II and Borderlands 2.
It has also released the highest-grossing video game in history... Grand Theft Auto V.
The next installment – Grand Theft Auto VI – is set to launch on November 19. And Zelnick wants to make sure it meets gamers' expectations.
You see, the title has been in development for more than eight years. And it could be the first video-game release to surpass $1 billion in development costs.
Despite being one of the most anticipated releases in media history, the TTWO stock has suffered...
From January through early April 2026, it fell as much as 24%... Investors feared that AI could displace development teams by creating playable games in months rather than years.
Today, we'll look at how Grand Theft Auto VI could reset expectations for Take-Two, and why investors could be missing a big opportunity in that space.
This video-game sequel holds the key to Take-Two's future...
At the 2025 Game Awards (the Academy Awards for video games), Grand Theft Auto VI won the Most Anticipated Game award. It also won it in 2024.
That's a great sign considering it's following in the footsteps of one of the most popular video games of all time...
Grand Theft Auto V has sold more than 225 million units since its 2013 release. And to this day, it's still generating millions of dollars every year.
The online component – Grand Theft Auto Online – has turned the franchise into a revenue-gushing machine.
On that platform, gamers interact with each other in a multiplayer "sandbox"... They can collaborate on missions, build "empires," and participate in impromptu events.
This service generates about $500 million in revenue per year.
And there's no reason to think Grand Theft Auto VI will be any different. In fact, Take-Two has a two-part strategy...
First, it would launch the game on the PlayStation 5 and Xbox video-game consoles. (Some analysts expect fans to buy 25 million units of Grand Theft Auto VI on day one.) The company would then roll out the game's next-generation Grand Theft Auto Online multiplayer mode.
With the V and VI versions in tow, online spending would keep money flowing into Take-Two for years to come.
Yet the market's expectations are surprisingly tempered...
We can see this through our Embedded Expectations Analysis ("EEA") framework.
The EEA starts by looking at a company's current stock price. From there, we can calculate what the market expects from the company's future cash flows. We then compare that with our own cash-flow projections.
In short, it tells us how well a company has to perform in the future to be worth what the market is paying for it today.
We normally look at five years of data for Uniform return on assets ("ROA"). But it's important to go back further in this case... to see how profitable Take-Two was during its last Grand Theft Auto release.
The company's Uniform ROA jumped to more than 100% in fiscal year 2014. When Grand Theft Auto V sales cooled down in 2015, Take-Two's ROA plummeted.
And for most of the past decade, the company's Uniform ROA has been at or above 40%. Returns only started slipping in the past few years.
Right now, the market expects Take-Two's Uniform ROA to reach about 36% by 2030... with no real jump in profitability. Take a look...
That tells us the market is underestimating Take-Two... even though the upcoming video game could be one of the largest product launches in history.
It's too early to tell if Grand Theft Auto VI will live up to the hype...
But we know that folks can't wait to get their hands on it. And we saw what happened when Take-Two released the last iteration...
Grand Theft Auto V generated $800 million in sales in its first 24 hours... It hit $1 billion in just three days. Fans then jumped (and stayed) online to connect with other players.
This business model has pumped money into the company for more than a decade. Yet, investors don't grasp how Take-Two could benefit from another go-around.
Momentum is building behind the Grand Theft Auto VI release. And we believe that's setting up a blockbuster year for the company.
Regards,
Joel Litman
May 21, 2026
