Take-Two Interactive Software shares rose 3.5% this Friday, since the solid prognosis of Zynga’s owner indicated a rebound in the mobile video game industry after years of postpandemics recession.
Considered in its day as the next great growth engine of the video game industry, the mobile market stagnated in recent years, since people spent more time outdoors after confinements and high inflation discouraged non -essential spending.
This left investors waiting for the results of mobile video game agreements, such as the purchase of Zynga by Take-Two in 2022 for 12.7 billion dollars.
However, the improved annual forecast of Take-Two and the best results than expected for the April-June period offered the clearest signal to the date that the US mobile video game market was recovering.
“We have seen a great boost in many of our great titles, and some of those who have really begun to take off from the fourth quarter of last year and in this first quarter,” said Financial Director, Lainie Goldstein.
Take-Two, whose fiscal year goes from April to March, creates mobile games based on puzzles such as “Match Factory”, “Color Block Jam” and “Toon Blast”. These games helped him register an increase of almost 17% in reservations (an income indicator) in his first fiscal quarter.
“The increases after exceeding the expectations of the first quarter are usually rare in this industry, especially with great releases still to arrive, but the continuous strength of the mobile market leaves a wide margin for a simple transfer of the profits,” said TD Cowen analysts.
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Big Take-Two titles could increase profits
The mobile games market is also benefiting from the growing integration of live services functions in the titles so that players continue to spend. This contributed to purchasing revenues within the application increased to 81.7 billion dollars last year from 78.6 billion in 2023, according to Tower sensor data.
In addition to the mobile business, Take-Two has large premium titles in development, such as “Mafia: The Old Country”, which will be launched this Friday, as well as “Borderlands 4” and “Grand Theft Auto VI”, all of which are expected to sell millions of copies.
“Among Take-Two’s current performance, his next releases such as Mafia and Borderlands, and, of course, GTA VI, the company should be optimistic,” said Joost Van Dreunen, video game professor at the Stern Business School of the University of New York.
With Reuters information
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