Take-Two Interactive Software (TTWO) video game Grand Theft Auto: San Andreas drove “tens of millions” of downloads, Netflix (NFLX) said as it reported bumper quarterly earnings and subscriber growth.
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Netflix hailed the TTWO content as it reported making “good early progress” on its video game strategy, as the streaming platform reported subscribers rose 19 million in its Fiscal fourth quarter, sending shares up 15%.
NFLX Hails Gaming Potential
On the earnings call, co-CEO Gregory Peters said the company was “just scratching the surface” in terms of what’s possible with gaming.
“We’ve learned quite a bit and made some good early progress since we’ve launched games,” he added, noting that the company was continuing to refine its gaming strategy.
In addition to GTA: San Andreas, the critically claimed Oxenfree II from developer Night School Studio stands out, he said.
Fan favorites based on Netflix content, like Too Hot to Handle, Emily in Paris, and Selling Sunset were also mentioned by Peters, who said the company’s latest big release, Squid Game: Unleashed “validates our Netflix game formula, which is enabling this virtuous cycle between linear content and simultaneous game offerings.”
Squid Game: Unleashed reached number one in action games in app stores in 107 countries and is on pace to become Netflix’s most downloaded game.
The approach of utilizing Netflix content within gaming helps to extend audience’s engagement and, Peters said, creates a “synergy that reinforces both mediums, the interactive and the non-interactive side.”
TTWO Gets Upgrades
Meanwhile, it’s not just NFLX doing well from gaming, with TTWO seemingly on the up, too. After a 23% rally in the last six months, Oppenheimer increased its price target on the stock to $215 from the previous $190 while maintaining an Outperform rating on the company’s shares. Stifel analysts also this week raised their price target on the shares, citing the earnings potential from its healthy development pipeline.
Is TTWO a Good Stock to Buy?
Overall, Wall Street has a Strong Buy consensus rating on TTWO, based on 16 Buys and two Holds. The average TTWO price target is $199.76, implying almost 8% upside from the current level. Shares of TTWO have risen 23% over the last six months.
