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The Ratings Game: Take-Two stock falls more than 5% after Rockstar Games has ‘Grand Theft Auto’ trouble

Take-Two Interactive Software Inc. shares fell more than 5% Monday following a glitchy launch from the company’s “Grand Theft Auto” franchise that lasted through the weekend.

Take-Two
TTWO
shares fell as much as 7% to an intraday low of $174.82, and closed the regular session down 5.5% at $177.60. In comparison, the S&P 500 index
SPX
finished the day virtually flat, and the tech-heavy Nasdaq Composite Index
COMP
declined less than 0.1%.

Back on Thursday, Take-Two’s Rockstar Games released “Grand Theft Auto: The Trilogy – Definitive Edition” on all major platforms, and since then several outlets have been reporting bugs, outraged gamers demanding refunds, and that those who bought the PC version of the game had not been able to play the game at all.

On Rockstar’s support page and Twitter account, the studio said it had updated the game and apologized for the inconvenience.

In a note, Jefferies analyst Andrew Uerkwitz, who has a buy rating and a $231 price target on Take-Two, said the launch “will likely cause investors to lower their December quarter estimates and continue to question TTWO’s ability to expand the portfolio while maintaining quality.”

Admitting that his expectations for the launch had already been low, Uerkwitz said the launch troubles likely will “likely remove some upside,” and that while “several fixes have already been implemented, including the PC version being available again; we do wonder how the game got launched in this state.”

Gamers and investors have become particularly unforgiving when a game is released and it contains bugs. That’s become an even bigger issue since last year’s buggy release of the long-awaited and overdue “Cyberpunk 2077” from CD Projekt SA
PL:CDR
that forced distributors like Sony Group Corp.
JP:6758
to offer full refunds.

Since the “Cyberpunk 2077” debacle, the number of delayed game releases has risen noticeably. Back in September, Take-Two said expansions of the “Grand Theft Auto” franchise and two “immersive core titles” would be delayed. In this past year, Electronic Arts Inc.
EA
delayed the release of “Battlefield 2042” by a month, and Activision Blizzard Inc.
ATVI
said it was delaying the release “Overwatch 2” and “Diablo IV.

Of the 27 analysts who cover Take-Two, 17 have buy ratings and 10 have hold ratings, along with an average target price of $214.09, according to FactSet data.

Earlier in the month, Take-Two raised its bookings forecasts for the year during its quarterly earnings report.

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