2Mon
Super nice analysis, thank you very much! However, I don't think the companies are ideal in comparison. Ubisoft and EA are poorly managed and have been on the decline for years. Embracer is also just a rummage table for games companies. They bought everything for years and then had to close down and devalue their shares because they were completely over-indebted.
If anything, CDPR can only really be compared with manufacturers who have at least made it their mission to produce good games. Otherwise, strictly speaking, it's not even the same business model. The only peer group that comes into question for me is $CDR $PDX $TTWO $11B.
Something like Cyberpunk - where resources are invested in the project for years to make it a financial and artistic success afterwards - would never happen at EA or Ubisoft. They just churn out the games and hope that they've produced them cheaply enough that they're not in the red.
If anything, CDPR can only really be compared with manufacturers who have at least made it their mission to produce good games. Otherwise, strictly speaking, it's not even the same business model. The only peer group that comes into question for me is $CDR $PDX $TTWO $11B.
Something like Cyberpunk - where resources are invested in the project for years to make it a financial and artistic success afterwards - would never happen at EA or Ubisoft. They just churn out the games and hope that they've produced them cheaply enough that they're not in the red.
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@Soprano You may be right, but in the end everyone is fighting for the consumer's attention in the gaming sector and Ubisoft and EA also have story games, even if it feels like they are never finished. The quality is lacking, but anyone who plays Star Wars or FIFA or Assassin's Creed can hardly end up playing or watching Witcher or Cyberpunk. And even compared to the others, CD is doing very well. Take two has great IPs with Rockstar (GTA and co) and 2k but in the end they are always negative and dilute the shareholder, so it doesn't matter how good the game is if you only get minimal returns in the end. Also the risk ratio is not right. GTA swallows CF for years, has historically released a lot but never phenomenally much and in the end you have the risk that the game might not be the banger after 10 years as everyone hoped. It can end up like Cyberpunk, where you've waited so long, you're just disappointed and then have to put in so much human capital to please the consumer.
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2Mon
@topicswithhead Well, I'm not convinced by the first argument. You would actually have to compare the entire entertainment sector with each other - anyone who is watching a Disney movie or Netflix or is in a casino or strip club (there are also shares there) - can't play Witcher either. But you have to be realistic enough to realize that most gamers will prefer a new Witcher or a GTA to any Ubisoft copy and paste game.
I don't think Take Two is as bad as you make it out to be. At least in the 2010s, the stock achieved phenomenal returns. It's only gone sideways since 2018. And I don't know if you're aware of it, but they also took over Zynga and became one of the big players on the mobile market. That has been incredibly expensive so far and is the reason why the figures look so bad. But if it is still profitable, that is of course something that would put them ahead of all other major western video game manufacturers.
I don't think Take Two is as bad as you make it out to be. At least in the 2010s, the stock achieved phenomenal returns. It's only gone sideways since 2018. And I don't know if you're aware of it, but they also took over Zynga and became one of the big players on the mobile market. That has been incredibly expensive so far and is the reason why the figures look so bad. But if it is still profitable, that is of course something that would put them ahead of all other major western video game manufacturers.
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@Soprano In principle, you also have to compare the entertainment sector, but I'm referring to gaming here. That doesn't change the fact that you also earn money with the side stuff.
I only see it as relevant to compare the last 5 years, because everything before that is historically important but irrelevant in terms of business and valuation.
It's of little use to me today that you earned very well in GTA 5 times and so on. That only gives me a direction for GTA 6 with a similar product, but no more. In the last few years, nothing has been going well and the mobile division is already making good money, but it's still doing rather poorly. You also act as if 2k didn't have Fifa like games with NBA 2k and 2k WWE, and the games outside of Rockstar Games were mostly unfinished.
Also, not all gamers prefer good games over bad ones, brand and novelty games are also there. Otherwise you would hardly play any game from Ubisoft, Assassin's creed has always been released unfinished and with a half-thought-through story for the last few years and yet many people still buy it. So you need more than just a good game.
Take Two isn't a bad company either, but it hasn't achieved anything in the last few years, is only just positive and now even negative and has only achieved 20% TR in the last 5 years despite the GTA 5 trailer. You have strong Ips especially through Rockstar and in the end you are still completely dependent on GTA. If the game doesn't perform then it's a real bummer and years of investment are gone. Given that you already have Red dead, LA noire, Mafia, 2KNBA, civilization and Zynga, I somehow don't see the right balance between risk and return. It really depends too much on GTA
I only see it as relevant to compare the last 5 years, because everything before that is historically important but irrelevant in terms of business and valuation.
It's of little use to me today that you earned very well in GTA 5 times and so on. That only gives me a direction for GTA 6 with a similar product, but no more. In the last few years, nothing has been going well and the mobile division is already making good money, but it's still doing rather poorly. You also act as if 2k didn't have Fifa like games with NBA 2k and 2k WWE, and the games outside of Rockstar Games were mostly unfinished.
Also, not all gamers prefer good games over bad ones, brand and novelty games are also there. Otherwise you would hardly play any game from Ubisoft, Assassin's creed has always been released unfinished and with a half-thought-through story for the last few years and yet many people still buy it. So you need more than just a good game.
Take Two isn't a bad company either, but it hasn't achieved anything in the last few years, is only just positive and now even negative and has only achieved 20% TR in the last 5 years despite the GTA 5 trailer. You have strong Ips especially through Rockstar and in the end you are still completely dependent on GTA. If the game doesn't perform then it's a real bummer and years of investment are gone. Given that you already have Red dead, LA noire, Mafia, 2KNBA, civilization and Zynga, I somehow don't see the right balance between risk and return. It really depends too much on GTA
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@topicswithhead You're better off with Microsoft, Sony, Nintendo
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