There’s a saying in the video game industry that a delayed game can become good. But a game that’s rushed out with flaws will never be great. Some video game companies have taken that philosophy to heart, even when it means delaying an anticipated release.
That can be tough for some studios, since they have to develop the game before they can sell it and generate revenue. For larger studios working with multiple properties, it’s somewhat easier.
For instance, Take-Two Interactive Software (TTWO) just announced the delay of the anticipated Grand Theft Auto VI. The move also brought a forecast for lower revenues.
While that’s disappointing, it simply means that the company’s revenues and profits will simply occur later. Given that it’s been over 10 years since the last game in the series, anticipation remains high – so those future profits look likely.
Take-Two has significantly underperformed the market over the past year, up just 6%. It may continue to trading sideways, but should break higher as the game gets close to launch.
Action to take: Long-term investors may want to consider building a position here, and using any declines in the coming months to add to that position.
For traders, shares have traded in a narrow range over the past year. For that kind of pattern, a strategy like covered call writing could add some income for shareholders.
For those without shares, the September $130 puts, last trading for about $3.75, could be sold for income, at the risk of being assigned shares near their 52-week low.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.