Take-Two’s GTA 6 ‘likely winner’

EA Sports

© Reuters. Take-Two’s GTA 6 ‘potential winner’ – EA’s FIFA breakup a potential long-term threat, says HSBC

HSBC started Take-Two Interactive. Interactive Software (NASDAQ:) with a Buy rating and price target of $170 and Electronic Arts (NASDAQ:) with a Hold rating and $128 target in a note to clients on Tuesday.

Focusing on the TTWO, HSBC analysts said the long-awaited Grand Theft Auto 6 is a “likely winner”.

“With GTA5 selling over 180 million copies, we see a potential upside to our conservative forecast of 30 million copies in year one (and 110 million during FY30e) and expect the title to be even more profitable than its predecessor given the game’s monetization growth since then,” the analysts wrote.

HSBC also noted that TTWO has a strong mobile presence following its acquisition of mobile game developer Zynga in 2022, while also pointing to “future synergies and tax relief”.

On EA, analysts said that while the FIFA World Cup™ helped drive FIFA23’s record-breaking sales of the tournament and boosted direct spending, the company’s guidance and post-12-month booking growth rates point to slower revenue ahead.

They also believe that the disintegration of FIFA (EA Sports’ FIFA game will be called EA Sports FC after its partnership with FIFA ends) is a long-term threat to the company. They also indicated that the company “suffers from mobile problems.”

“We started with a hold rating due to a more mixed development history, relatively weak mobile, possibly more competition in the future, and lack of catalysts, but balanced by continuous cost improvement and fair valuation,” they wrote.

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