October is ‘Go’ month for Red Dead Redemption 2 – here’s what that means
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October is ‘Go’ month for Red Dead Redemption 2 – here’s what that means

In just over a week, Take-Two Interactive’s latest video game will hit the stands. Red Dead Redemption 2 is the long-awaited sequel to Red Dead Redemption, a major franchise for the company, and if industry insiders are to be believed, the upcoming release will be this year’s biggest. Today’s blockbuster games are a big deal: they not only offer huge sales, but new video game business models mean that companies can benefit over the long term, thanks to new releases of downloadable content, online subscription-based versions of the game, and other digital assets.

Take-Two Interactive’s share price has appreciated by 13% so far this year

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Source: Yahoo Finance

According to Michael Olson, an analyst at Piper Jaffray, Red Dead Redemption 2 could bring in half a billion dollars for Take-Two. He also thinks that the online version of the game (which debuts a month later in November) could add an additional 20% of that to revenues, and suggests that most analysts aren’t factoring this in. Saying that online sales are “not necessarily reflected in consensus thinking,” Olson wrote in a note to clients:

“Red Dead Online does not have the chance to perform well without a large installed base of Red Dead units in which to sell digital content, so unit sales of the core game are critical. But the success of GTA Online has shown us that recurrent consumer spend generated by ‘Online’ components of these games can be a long-term driver of higher margin and higher visibility digital revenue.”

According to Take-Two’s Rockstar division (which is responsible for the Red Dead franchise), the online multiplayer experience of Red Dead Online is going to receive plenty of attention in its own right. Imran Sarwar, one of the division’s producers and chief designers, spoke to video game publication IGN to explain how the company views Red Dead Online:

“We see them essentially as separate products that will grow and evolve independently of each other. We love story-based, single-player games and they are the foundation of everything we do. Red Dead Redemption 2 is an absolutely massive story-based game that we hope people will be lost in for a long time and we want people to experience everything that world has to offer before we build on that with the Online experience. Not to mention, playing through the story and getting to know the controls and mechanics of the game is the best way to get ready for playing inside the world of Red Dead Online.”

Disclosure
Dominion holds Take-Two Interactive in its Global Trends Ecommerce Fund.


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The views expressed in this article are those of the author at the date of publication and not necessarily those of Dominion Fund Management Limited. The content of this article is not intended as investment advice and will not be updated after publication. Images, video, quotations from literature and any such material which may be subject to copyright is reproduced in whole or in part in this article on the basis of Fair use as applied to news reporting and journalistic comment on events.