Rockstar Games is one of the most prominent video game developers in the world, known for creating iconic games like the Grand Theft Auto (GTA) series, Red Dead Redemption, and Bully.
While you cannot directly invest in Rockstar Games as a standalone company (because it is a subsidiary of Take-Two Interactive, a publicly traded company), you can invest in Rockstar’s parent company, Take-Two Interactive, which owns Rockstar Games.
This guide will walk you through how to invest in Rockstar Games by purchasing shares in Take-Two Interactive and discuss other methods of gaining exposure to the video game industry.
1. Rockstar Games’ Parent Company: Take-Two Interactive
Take-Two Interactive, the parent company of Rockstar Games, is a leading global video game publisher that owns several major game development studios, including Rockstar Games and 2K Games. Take-Two’s stock (symbol: TTWO) is publicly traded on the NASDAQ.
Why Invest in Take-Two Interactive?
- Rockstar’s Popular Franchises: Rockstar Games is behind some of the highest-grossing and critically acclaimed video game franchises, including Grand Theft Auto, Red Dead Redemption, and Max Payne. These franchises generate massive revenues, both from game sales and ongoing services (like microtransactions and DLCs).
- Continuous Success: Rockstar consistently produces blockbuster games that dominate the industry. The success of Grand Theft Auto V, for example, has continued for years, largely due to its multiplayer mode, GTA Online, which has a thriving player base and generates ongoing revenue.
- Acquisition of Other Studios: Take-Two has also expanded its portfolio by acquiring various gaming studios like Nexon and Zynga, positioning itself well in the mobile gaming space as well as console and PC games.
2. How to Invest in Take-Two Interactive (TTWO)
Investing in Rockstar Games essentially means investing in Take-Two Interactive, as it is the company that develops and publishes Rockstar’s games. Here’s how you can invest:
A. Open a Brokerage Account
- Choose a Brokerage Platform: To buy shares of Take-Two Interactive (TTWO), you need to open a brokerage account. Popular brokerage platforms include:
- TD Ameritrade
- Charles Schwab
- E*TRADE
- Robinhood
- Fidelity
- Interactive Brokers
- Create an Account: Sign up by providing personal information, verifying your identity, and linking a bank account to fund your investments.
- Deposit Funds: Once your account is set up, deposit funds into your brokerage account using a bank transfer, wire, or other methods allowed by the platform.
B. Research Take-Two Interactive
Before buying shares of Take-Two Interactive, it’s important to understand the company’s financial health and outlook.
- Check Financial Reports: Review Take-Two’s quarterly earnings reports to assess the company’s performance, revenue streams, and profitability. Key metrics to look at include:
- Revenue from Rockstar Games: Rockstar’s games are major revenue drivers. Check the company’s breakdown of revenue sources.
- Growth in Online Services: Take-Two has increasingly focused on in-game purchases and services (like GTA Online), so growth in this area is important.
- Upcoming Game Releases: Consider the release schedule for upcoming games, especially Rockstar titles like the next Grand Theft Auto or Red Dead Redemption.
- Stock Analysis: Look at analyst reports and ratings for Take-Two Interactive. Websites like Yahoo Finance, MarketWatch, and Morningstar offer insights into stock performance, ratings, and forecasts from experts.
C. Buy Shares of Take-Two Interactive
Once you’re comfortable with your research:
- Search for TTWO on your brokerage platform. TTWO is the ticker symbol for Take-Two Interactive.
- Place an Order: You can buy shares in Take-Two Interactive through market orders (at the current market price) or limit orders (at a specific price you set).
- Monitor Your Investment: After purchasing the shares, monitor the stock’s performance through your brokerage platform. You may want to set up alerts for news or price changes.
3. Alternative Ways to Invest in Rockstar Games and the Video Game Industry
While the most direct way to gain exposure to Rockstar Games is through Take-Two Interactive, there are other methods to invest in the video game industry, especially if you want broader exposure to the gaming ecosystem.
A. Invest in Gaming ETFs (Exchange-Traded Funds)
An ETF is a collection of stocks that you can buy as a single investment. There are several ETFs that focus on the video game industry, which would provide exposure to Take-Two Interactive as well as other gaming companies.
Popular gaming ETFs include:
- VanEck Vectors Video Gaming and eSports ETF (ESPO): Invests in companies involved in video game development, eSports, and related services.
- Global X Video Games & Esports ETF (HERO): Focuses on the video game and eSports industries, including game publishers, developers, and gaming hardware companies.
- iShares Expanded Tech-Software Sector ETF (IGV): Includes tech companies, with exposure to software developers, including some game developers.
These ETFs can provide you with exposure to companies in the gaming industry, not just Take-Two Interactive.
B. Invest in Other Gaming Companies
If you want more direct exposure to the video game sector, consider investing in other major gaming companies. Some of the biggest players in the gaming world include:
- Activision Blizzard (ATVI): Known for franchises like Call of Duty, World of Warcraft, and Overwatch.
- Electronic Arts (EA): Famous for games like FIFA, The Sims, and Battlefield.
- Ubisoft (UBI.PA): The creator of games like Assassin’s Creed, Far Cry, and Watch Dogs.
These companies are in direct competition with Take-Two Interactive and often make investments in similar genres and game types.
C. Invest in Gaming Hardware Manufacturers
In addition to investing in game developers, you can also consider investing in gaming hardware companies. These companies produce the consoles, graphics cards, and other hardware that drive the gaming ecosystem.
- NVIDIA (NVDA): A leading producer of graphics cards, essential for gaming PCs and consoles.
- AMD (AMD): Known for its processors and graphics technology for gaming consoles like the PlayStation and Xbox.
- Sony (SNE): The company behind the PlayStation gaming console.
- Microsoft (MSFT): Maker of the Xbox and other gaming-related products.
D. Follow Rockstar Games’ New Releases and Events
Rockstar Games regularly releases updates and new games, and they are also known for their highly successful marketing campaigns. Staying up-to-date on Rockstar’s developments can help you anticipate market movements or potential catalysts for Take-Two Interactive’s stock.
- Upcoming Game Releases: The release of major games, such as the long-awaited Grand Theft Auto VI or Red Dead Redemption III, can have a significant impact on Take-Two’s financial performance and stock price.
- Live Services: Rockstar Games’ ongoing support for titles like GTA Online generates steady revenue, making it a key factor in the company’s financial outlook.
4. Risks of Investing in Rockstar Games (Take-Two Interactive)
Like any investment, buying shares in Take-Two Interactive comes with risks:
A. Market Risk
- The video game industry can be volatile, and consumer interest in certain games can change quickly. If a new Rockstar title doesn’t meet expectations or underperforms, it could negatively impact Take-Two’s stock.
B. Competition
- Take-Two competes with other major publishers like Activision Blizzard and Electronic Arts. If their competitors release successful titles, it could limit Take-Two’s market share.
C. Development Delays
- Delays in the release of major titles like the next Grand Theft Auto could hurt Take-Two’s stock price, especially if investors are relying on those releases for growth.
D. Regulatory Risks
- The video game industry is subject to various regulations, including those around loot boxes, in-game purchases, and data privacy. Changes in these regulations could impact Take-Two’s revenue and operations.
5. Conclusion: How to Invest in Rockstar Games
While you cannot invest directly in Rockstar Games, you can gain exposure to the company by investing in Take-Two Interactive (TTWO), its parent company. Here are the steps to get started:
- Open a Brokerage Account and fund it.
- Research Take-Two Interactive (TTWO) using financial reports and analyst ratings.
- Buy Shares of TTWO through your brokerage account.
- Consider investing in gaming ETFs or other gaming companies if you want broader exposure.
- Stay informed on upcoming releases and live service updates from Rockstar to anticipate major events that may affect stock prices.
Investing in Take-Two Interactive allows you to gain exposure to Rockstar Games’ revenue-generating franchises while participating in the growth of the broader gaming industry.
Like any investment, it’s important to do your research, understand the risks, and monitor your portfolio.