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Take-Two Interactive Software Banks on Diverse Portfolio for Revenue Growth

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Jul. 5 2016, Updated 9:07 a.m. ET

Industry-leading intellectual property

Take-Two Interactive Software (TTWO) has seen its revenues increase from $825 million in fiscal 2012 to ~$1.4 billion in fiscal 2016. According to the company, this revenue growth was possible as it has a diverse portfolio of intellectual property.

Take-Two Interactive notes that it has ten franchises with “at least one five-million unit selling release, and more than 45 individual, multi-million unit selling titles.” Since 2007, Take-Two Interactive has added eight new franchises, including best-selling games such as Evolve, WWE 2K, BioShock, and Borderlands.

Take-Two Interactive’s franchises are popular with those who play the Xbox (MSFT) as well as the Japan-based (DXJ) Sony (SNE) PlayStation consoles.

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Games across genres

Take-Two Interactive launched several games in 2016 in genres including sports, action, adventure, role-playing, strategy, and fighting. According to Statista, shooter and action games dominate video game sales and account for 24.5% and 22.9%, respectively, of total sales in the US (IVV).

This was followed by the sports, role-playing, and adventure genres, which account for 13.2%, 11.6%, and 7.7%, respectively, of total sales.

Why is Take-two Interactive optimistic about long-term growth?

According to the Entertainment Software Association (or ESA), more than 155 million Americans (SPY) play video games. Each game-playing household has an average of 1.7 gamers.

Approximately 80% of these US households own a device to play video games, and 48% of these households own a dedicated gaming console such as the Xbox and the PlayStation. More than 42% of Americans regularly play video games, totaling more than three hours per week.

The next article will look at the growing importance of digital revenues in the gaming industry.

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