Gaming market poised for growth
In this series, we’ve learned that Take-Two Interactive (TTWO) stock has fallen more than 6% in 2018. Peers such as Electronic Arts (EA), Activision Blizzard (ATVI), and Zynga (ZNGA) have also seen considerable falls in their stock prices.
Will these companies stage a comeback in 2019? Take-Two’s sales are expected to rise more than 48% in fiscal 2019 and then fall 4% in fiscal 2020. However, its sales could then rise 20% in fiscal 2021.
Optimistic macro environment
The global gaming market is set to experience robust growth over the next few years. The gaming industry is expected to grow from $123.0 billion in 2017 to $137.0 billion in 2018 and to reach $166.0 billion by the end of 2022.
Though gaming companies have experienced short-term weakness, October was a record-breaking month for the industry, with games such as Call of Duty: Black Ops 4 and Red Dead Redemption 2 driving sales to record levels.
According to NPD Group, spending on games rose 73% year-over-year to $1.5 billion in October.
Robust product portfolio
Gaming companies now boast robust product portfolios. Take-Two and its peers entered the digital and mobile gaming space a few years ago, driving their profitability higher. Take-Two entered the esports space in May with the launch of NBA 2K League, which features 17 teams.