Trading The Gaming Industry And The Grand Theft Auto 6 Hype

Trading the gaming industry gains ground as companies such as Microsoft and Sony fight against each other for a greater share of the market by releasing advanced gaming consoles and studio acquisitions. Some years ago, trading the gaming industry would likely be on the list of lower priorities, but things have changed. Gaming events such as the recent release of the Grand Theft Auto VI trailer by Rockstar Games make the headlines as, boosted by the pandemic, the gaming industry has expanded to an unprecedented level.

On the back of the recent hype created by the first glimpse into Grand Theft Auto VI, this article will share valuable insights for traders.

Rockstar’s GTA 6 Trailer Rocks The Internet But Not Markets

December 5th was D-Day for the majority of video gamers expecting the release of Rockstar’s Grand Theft Auto 6 trailer. While some suggest that GTA 6 is the most anticipated game of the decade, the trailer itself broke a record: It beat the record for the most watched non-music video on YouTube in 24 hours, hitting 85 million views. The trailer views have already surpassed the number of views of the GTA 5 trailer, a game that hit the market in 2013 and still is one of Take Two’s “cash cows.” Take-Two Interactive owns Rockstar Games as well as 2K, two of the most important publishing labels in the gaming industry.

It should be noted that the release of GTA 5 for Sony Playstation consoles, Microsoft Xbox variants and PC generated for Take-Two Interactive revenue close to $8 bn with more than 185 million copies sold. GTA 5 continues to generate revenue on the back of annual subscriptions and in-game purchases.

However, the GTA 6 trailer release was not met with enthusiasm when it came to the trading market. While some would expect Take-Two Interactive share price to surge, as the first video of the much-anticipated blockbuster game emerged, this was not the case. Take-Two Interactive’s (TTWO) share price fell by almost 4% in premarket trading, recovering ground when trading resumed and recording a 1% loss in value.

What was the reason behind the fall? Some analysts suggested that the “Coming 2025” final screen was the one that sparked the drop as gamers around the world as well as investors had forecast that GTA 6 would be on store shelves by the end of 2024. Information leaks on social media suggest that the cost of making GTA 6 will rise above $2bn, taking into consideration that Rockstar’s developers have already been working on it for almost 10 years.

What Do Market Analysts Say About Take-Two Interactive And GTA 6

It is no secret that investors would like to see GTA 6 available for the festive season on Christmas 2024. The impact of the game in terms of sales is expected to surpass its predecessor’s while the game’s release could trigger a boost in gaming console sales by people who expect to play, as some say, the best video game ever.

Take-Two Interactive shares have risen 52% this year, outperforming some popular indices such as Nasdaq. Take-Two executives announced the release of the GTA 6 trailer in the first week of November and since then the stock has been up 16%.

Speaking to Forbes reporters, analysts at Oppenheimer & Co. Inc. said that the released trailer “shows a game with quality beyond expectation despite prior leaks and high standards reserved for anything,” adding that a delay beyond early 2025 could be in the cards.

In the same Forbes report, Deutsche Bank economists suggested that “GTA VI will drive more than $1 billion of incremental net bookings in its first year on the market, a potentially massive driver of sales growth considering Take-Two registered $5.3 billion in total net bookings last fiscal year.”

Bank of America (BofA) economists didn’t seem to share optimism with their counterparts. A BofA report downgraded the Take-Two Interactive share from Buy to Neutral as “not all investors are willing to extend duration beyond 15 months,” suggesting that the GTA 6 could be launched around fall 2025 instead of the first quarter of the year, according to consensus among analysts.

The survey noted that “based on investor inquiry patterns, participation has broadened meaningfully since the stock bottomed out a year ago. We expect further broadening of participation into the launch, which dampens downside price risk, but we do not see significant further upside potential for now.”

Sony Versus Microsoft - PS5 vs Xbox: War Rages On

Video games such as GTA 6 tend to boost gaming console sales. The game will be released on Sony PS5 and Microsoft Xbox, but there is still no update regarding the PC release. According to a report by Sony, the company sold 4.9 million PS5 units in its second financial quarter which ended on September 30. The total number of consoles sold since 2020 is 46.6 million. Just a month ago, Sony presented the slim version of the PS5 console making it more attractive for people with a lack of space as the first version of it was quite large. Some gaming analysts suggest that an upgraded PS5 Pro version will be released in November 2024.

Microsoft is the outsider as the Xbox Series X|S sold 23.90 million units with the US company having a 35% market share. Xbox sales fell by 5% on an annualised basis last year. Microsoft has vowed to turn the tide by the acquisition of important studios such as Activision Blizzard.

Risk Management Tools and Building Trading Strategies

Unlike video games, trading involves risk. Beginner traders are even more exposed to risks as they probably don’t have the necessary knowledge to judge what would be the right course of action. Lack of knowledge or experience could lead to mistakes; that’s why beginner traders should find educational materials prepared by experienced traders such as articles, how-to guides and webinars and learn how to build their trading strategies.

Beginner traders should not neglect to learn how to use risk management tools such as the stop-loss or take-profit orders that are offered as part of the most popular trading platforms. Such tools make sure that traders would be able to manage their losses in case markets move against their plans. Risk management tools give more liberties on how to position funds and help traders enjoy the whole experience with less stress.

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This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments. Please note that such trading analysis is not a reliable indicator for any current or future performance, as circumstances may change over time. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks.