Take-Two Delays 'Red Dead Redemption 2,' But Analysts Remain Optimistic

What Happened

Video game publisher Take-Two Interactive Software, Inc. (NASDAQ: TTWO) announced Thursday the highly anticipated release of "Read Dead Redemption 2" would be delayed until October. The announcement triggered a sharp selloff Thursday morning, sending shares down all the way to $119.05.

Why It's Important

This announcement marks the second time the game has been delayed, leading to frustration among gaming enthusiasts. BMO Capital Markets analyst Gerrick Johnson said the delays could be related "GTA Online" outperforming expectations.

"Releasing RDR2 while GTA is still doing so well could be cannibalistic, given they are both Rockstar games with a similar type of gameplay," Johnson told Benzinga.

Benchmark's Mike Hickey said he remains "exceedingly favorable on the market opportunity for the upcoming game."

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What's Next

Despite the announcement of a new release, Johnson said the main driver of Take-Two’s revenue generation is the sale of "GTA" and "NBA 2K" titles.

"[The announcement] doesn’t really matter too much," Johnson said. "If it outperforms, then fantastic. If it doesn't, GTA and NBA 2K will more than compensate."

Analysts at Jefferies also shared a positive outlook, believing "GTA Online" is doing so well that Take-Two could actually benefit from the delay. Analyst Timothy O’Shea attributed the delay of "Red Dead Redemption 2" to Take-Two’s "infamous perfectionism" and didn't change his 14.5 million unit sales forecast for the game.

Take-Two also mentioned it will release a "highly anticipated new title" in fiscal 2019, which Johnson and Hickey believe will be an installment in the "Borderlands" series.

Take-Two recovered from the morning's selloff, closing down 1.5 percent at $124.65.

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Image Credit: meristation [CC BY-SA 4.0], via Wikimedia Commons