[tweakmonkey]

As a small time investor of stocks, I like to read-up on the financial status of various game and tech companies. One of my favorite games at the time I started investing was Grand Theft Auto: San Andreas, so Take Two (the publisher of the GTA series) was a prime target in my mind... that is, until I read its financial statements. Take Two posted net losses for all four quarters of 2006 and marginal profits prior to that, barely squeeking into profits despite over $400 million in sales for 2005, which is typically unheard of for a software publisher with the prestige of games like GTA.

PERIOD ENDING 31-Oct-06 31-Oct-05 31-Oct-04
Total Revenue 1,037,840 1,202,595 1,127,751
Cost of Revenue 825,476 785,998 749,680

Remember, as an investor you want to buy into growth or you lose money. Obviously sales would slow in 2006 from no new GTA releases, but the cost of revenue went up over the last couple years despite this drop, and the costs were already very high for a publisher.

There's good news on the horizon (at least potentially good news). Take Two is being taken over, BBC reports.

The change in management would be "a positive for the company, assuming key development personnel are retained", said JP Morgan analyst Dean Gianoukos, while Elizabeth Osur of Citigroup said the move was "long overdue".

A few things should be noted here:
- Take Two *publishes* Grand Theft Auto. They do not develop it. Rockstar Studios does, who is currently owned by Take Two. This does not necessarily mean that the GTA team will break up or the game will change its content much.
- In the past, as mentioned above, Take Two has done an awful job managing finances, barely making a profit many times and losing money recently despite decent sales.
- If the new investors put a better grip on finances, GTA could become much more profitable for all parties involved, meaning the franchise could grow and mature considerably.

As bad of shape as Take Two has been in over the last few years, I cannot imagine this takeover being a bad thing. It will probably take 18 months or longer before the finances can really be turned for the better, but the leadership and organization of Take Two will be more apparent within a year.

[freeridemusik]

Thanks for the info... I have also been investing a little here and there and was looking into game companys. Good to get some more info.