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Take-Two Stock Falls Despite Red Dead Redemption 2 Success

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Red Dead Redemption 2 may have been one of the biggest games of last year, but that apparently hasn't done much for the stock price of its publisher, Take-Two Interactive. The company has seen its shares slump by 14% due to lower quarterly projections than what some analysts were anticipating.

The company reported estimated earnings of $450 million to $500 million for the quarter ending in March, which is well under the $609.1 million projection many market analysts had been anticipating, leading to the decrease in share price. This may surprise many fans, as Red Dead Redemption 2 was the second best selling game of 2018, coming in right under Black Ops 4.

While it wasn't quite enough to take home Game of the Year at the Game Awards, the game earned shining reviews from many outlets and even a perfect score in our review.  It wasn't Take-Two's only hot release either, as NBA 2K19 was the third best selling game of last year.

So, with two of the best selling games of last year under Take-Two's belt, the company likely fell short of financial projections due to the free-to-play battle royale game Fortnite, which even Netflix considers to be its greatest competitor when it comes to getting users' attention. Fortnite's free-to-play structure and content updates have likely pulled away customers that prefer less of a financial investment, which could explain why Take-Two came up short.

Of course, even with the lower projections, Take-Two is still incredibly cozy financially. The company is also responsible for Grand Theft Auto 5, which is the most profitable entertainment product of all time and still regularly tops monthly sales lists. Red Dead Redemption 2 sales have also exceeded 23 million copies, which is far greater than the 15 million unit estimate from before the game's release. With this being the case, employees and fans of the company should have no fear of any closures or layoffs in the near future.

Despite the dip in share price, Take-Two Interactive's future seems bright. The publisher ought to have have many more games come in the future, though we will have to wait to find out if any surprises are among the bunch.

Source: Bloomberg

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