Take-Two Interactive (NASDAQ:TTWO), the name behind the hit gaming franchise Grand Theft Auto, is dropping multiple projects and lowering its headcount under a cost reduction program.
Take-Two’s Focus on Efficiency
This move is aimed at boosting efficiencies and enhancing the company’s margin profile. The effort will lower TTWO’s workforce by nearly 5% and result in total charges in the range of $160 million to $200 million. At the same time, TTWO expects annual cost savings to the tune of over $165 million from the program.
For TTWO, the cost-saving measures come on the heels of its $460 million acquisition of Gearbox Entertainment last month. Gearbox is known for hit titles, such as Borderlands, Homeworld, Brothers in Arms, and Risk of Rain. Meanwhile, the next installment of Grand Theft Auto is expected to release sometime in 2025. In December, the game’s trailer notched over four million views on YouTube within hours of its launch.
Broader Industry Pain
The layoffs at TTWO point to continued pain for the video game industry. Other big names such as Unity Software (NYSE:U), Tencent’s (OTC:TCEHY) (HK:0700) Riot Games, and the gaming division of Microsoft (NASDAQ:MSFT) have also trimmed their headcounts in recent times.
The layoffs at TTWO indicate ongoing challenges in the video game industry. Other major players, such as Unity Software (NYSE:U), Tencent’s (OTC:TCEHY) (HK:0700) Riot Games, and the gaming division of Microsoft (NASDAQ:MSFT), have also reduced their workforces in recent times.
What Is the Price Prediction for Take-Two Interactive Stock?
Despite recent selling pressure, Take-Two shares are still up by nearly 17% over the past year. Overall, the Street has a Strong Buy consensus rating on the stock, alongside an average TTWO price target of $178.86. This implies a nearly 23% potential upside in the company’s share price.
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