It’s rare for me to sell a stock. In this case, I took a small $60 profit from Take Two Interactive and rolled the money into a new company. I originally bought Take Two Interactive last fall when I thought the company was different. After all, they created tremendous value with GTA V’s campaign in 2013 and again with Red Dead 2 in 2018. Arguably these were some of the most immersive, detail oriented, and fun story campaigns ever made. Red Dead 2, for one, grossed $725 million in sales in just 3 days. As of May 2019, 24 million copies have been sold. This would eventually be a huge boon for the company’s earnings. However, Take Two was then tasked with the challenge of keeping gamers hooked on RD2.
When GTA V Online came out, Take Two succeeded in creating a long-term stream of revenue. They first sold the story-based game (campaign) and later sold in-game cash/content for the online mode. After playing through the campaign, players would switch to online and start a whole new journey. Players would create a customized character and be thrust into a vast crime infested open world. They could then play with friends and do whatever they wanted in a vast satirical version of modern-day Los Angeles. Unfortunately, the way Take Two made money became a point of contention in the gaming community.
Like other online games, GTA V was criticized for its pay-to-win mechanics. They would sell “Shark Cards” or in game cash to players. Players could then use this cash to buy upgraded vehicles, superior weapons, and even fighter jets. Those who invested high amounts of real-life money ended up eviscerating less affluent players. Hence the term pay-to-win! After a few modifications, Take Two was able to moderate the pay-to-win mechanics and save the game. GTA V Online was then able to produce a steady stream of income while the company developed Red Dead 2. Unfortunately, even with those modifications, Take Two began to erode the good will it had built within the community.
In 2019 gaming companies all over are continuously using forms of pay-to-win and even gambling to generate revenue. They may even release a game for free only to subject players to endless “loot boxes” and/or microtransactions. With loot boxes players spend X dollars for X loot boxes. Players then open these boxes with the hope they MIGHT obtain what they need, be it a certain gun/outfit/emblem. With Take Two, they released RDO with little to no content and dozens of pretentious micro transactions. When players would find ways around spending real money, Take Two would “patch” these solutions, forcing players into the marketplace. Several months in, the company is still engaging in these practices, and there are very few players left in RDO. Because of the decline in good will, predatory business practices, and below average financial metrics I ended up having to sell TTWO.
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