Take-Two beware: analyst warns of struggle for profits

Analyst Michael Pachter of Wedbush Morgan Securities believes that even Grand Theft Auto IV can’t carry Take-Two Interactive into the happy land of rolling in dinero, reports GamesIndustry. The GTA series is Take-Two’s best performer in the company’s portfolio, but the fourth console title in the series will have to contend with another powerhouse when it launches later this year, Pachter warns: Halo 3.

“In our view, Xbox 360 owners who choose to buy only one of the two games at launch will opt to buy Halo 3 first, because of its well-developed online gameplay and fiercely loyal fan base,” he says.

Neither does Wedbush Morgan believe that Take-Two’s other titles and studios, including its sports lineup (2K Sports), and Sid Meier’s little outfit, Firaxis Games (responsible for Pirates! and Civilization, among others), can help pad the company’s bottom line. “We think that the company’s strategy over the last two years has been unsound, as it appears to us to have chased revenues from any source without regard to the profit potential of the game.”

Then there are those corporate investigations. Uh-oh. Pachter’s advice to investors: SELL. People with money won’t be too happy to fund future Take-Two projects at this rate. Take-Two won’t be happy to hear this, either.

Analyst Michael Pachter of Wedbush Morgan Securities believes that even Grand Theft Auto IV can’t carry Take-Two Interactive into the happy land of rolling in dinero, reports GamesIndustry. The GTA series is Take-Two’s best performer in the company’s portfolio, but the fourth console title in the series will have to contend with another powerhouse when it launches later this year, Pachter warns: Halo 3.

“In our view, Xbox 360 owners who choose to buy only one of the two games at launch will opt to buy Halo 3 first, because of its well-developed online gameplay and fiercely loyal fan base,” he says.

Neither does Wedbush Morgan believe that Take-Two’s other titles and studios, including its sports lineup (2K Sports), and Sid Meier’s little outfit, Firaxis Games (responsible for Pirates! and Civilization, among others), can help pad the company’s bottom line. “We think that the company’s strategy over the last two years has been unsound, as it appears to us to have chased revenues from any source without regard to the profit potential of the game.”

Then there are those corporate investigations. Uh-oh. Pachter’s advice to investors: SELL. People with money won’t be too happy to fund future Take-Two projects at this rate. Take-Two won’t be happy to hear this, either.