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As 2025 draws near, excitement over Take Two's (TTWO -1%) long-awaited successor in its Grand Theft Auto franchise is mounting. Today, FT reported that GTA VI is estimated to generate $3.0 bln in revenue next year, translating to over half of the company's FY24 (Mar) sales. The title is expected to be released in 2025, during TTWO's FY26 (Mar). However, highly-anticipated titles, particularly those produced by a prominent video game publisher like TTWO, often encounter delays, potentially pushing release into 2026 or closer to the end of FY26 or the start of FY27.

Still, TTWO assured shareholders in early November during its Q2 (Sep) earnings call that the game would launch in the fall of 2025. This comment helped fuel a breakout in the stock, which was stuck in a sideways pattern throughout much of 2024, outshining several weak points from the quarter, including a wide earnings miss and lowered FY25 guidance.

• Underpinning the enthusiasm over GTA VI is the extraordinary success of GTA V. Estimates place total revenue from the current title at over $8.0 bln since its 2013 release, supporting an eventual push above $10.0 bln. During its first few months on the shelves, the previous GTA title generated over $1.0 bln in revenue for TTWO.
• Meanwhile, despite over 11 years since first hitting stores and traversing a volatile macroeconomic backdrop lately, GTA V continues to support positive yr/yr revenue growth for TTWO. In Q2, video game sales outpaced internal expectations, helped by consistently fresh online content via Grand Theft Auto Online. A 35% yr/yr jump in GTA+ members (a subscription service to receive the latest online content) highlights the sustained demand for the series. Management added that engagement was strong, anticipating this to continue for the remainder of 2024.
• Given this, at $3.0 bln, the sales estimate for GTA VI could be considered somewhat conservative. However, this may be due to an uncertain economic situation domestically and overseas. During 2024, TTWO announced a restructuring plan, trimming its staff by around 5% and cancelling around $200 mln worth of projects in development, underscoring a wobbly economy. Meanwhile, reports projected that November U.S. consumer spending on video game hardware and software will be down 7% yr/yr, a sharp reversal from the 10% improvement in October.

TTWO is heading into one of the most anticipated years of the past decade due to the predicted success of its upcoming GTA title. Coinciding with this release next year are a few other popular franchises, including new Mafia and Borderlands titles, setting TTWO up for record net bookings in FY26 and FY27. The success of GTA VI could also spur significant console sales for Sony (SONY) and Microsoft (MSFT), as the upcoming title is slated for release exclusively on the latest PS5 and Xbox Series X/S. Nevertheless, a deteriorating economic picture could hinder sales trends, while delays would significantly impact TTWO's elevated FY26 and FY27 revenue expectations.