Shares of video game maker Take-Two Interactive (TTWO) slipped in afternoon trading after the company once again delayed the release of its upcoming action game “Red Dead Redemption 2.”
WHAT’S NEW: Take-Two this morning announced that its subsidiary Rockstar Games delayed the release of “Red Dead Redemption 2,” which originally was set for a Spring 2018 launch on the PlayStation 4 (SNE) and Xbox One (MSFT), to October 26, 2018. The company said that the delay is to allow for additional time to “further polish the final product.” Despite this change, Take-Two reiterated its financial outlook for fiscal 2019, saying it expects to record FY19 net bookings in excess of $2.5B and FY19 net cash provided by operating activities in excess of $700M.
PREVIOUS ‘RED DEAD’ DELAY: On May 22, 2017, Take-Two’s Rockstar Games said in a blog post that the launch of “Red Dead Redemption 2” had been delayed to Spring 2018 after the company originally said that the game would be available in Fall 2017. At the time, Rockstar said it was “very sorry” about any disappointment associated with the delay, but said the company believes in “delivering a game only when it is ready.”
WHAT’S NOTABLE: On its quarterly earnings conference call earlier this week, rival game giant Electronic Arts (EA) confirmed reports that it plans to release its upcoming online multiplayer action game “Anthem” in early 2019 instead of Fall 2018 as originally planned. On the call, the company said that it is “very confident” in the new ship date for the game. Gaming site Kotaku originally reported the delay of “Anthem” last week, noting that BioWare, the studio working on the game, had harnessed all of its teams to work only on that game.
STREET RESEARCH: Following the “Red Dead Redemption 2” postponement, Baird analyst Colin Sebastian said he does not believe the game’s delay means trouble for Take-Two and that it is actually the right move. In a research note to investors, Sebastian said that, as with other oft-delayed Rockstar titles like “Grand Theft Auto V” and the original “Red Dead Redemption,” the calibre of content is more important than hitting “somewhat arbitrary” commercial deadlines. The analyst said the additional 5-6 months of development time will translate into better gameplay and user satisfaction and that the game could benefit incrementally from a holiday-period release. Sebastian kept an Outperform rating on Take-Two shares.
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