Take-Two's Disc-Free Future Meets a $290 Price Target

Wall Street spent Tuesday recalibrating its models on Take-Two Interactive, and the results pointed in two directions at once. Goldman Sachs nudged its price target up to $290 from $285 while reaffirming its buy rating, according to media reports. UBS went the other way, trimming its target to $295 from $300 — still a buy, but a shade less enthusiastic.

The split verdict followed Monday's quarterly release, which gave the analysts plenty to chew on.

A Quarter That Cut Both Ways

Take-Two reported net bookings of $1.60 billion for the second quarter of fiscal 2027, a decline of 18% year over year. The GAAP net loss came in at $54.0 million. Management held firm on full-year guidance of $8.0 billion to $8.2 billion in net bookings, and guided third-quarter bookings to a range of $3.35 billion to $3.50 billion.

UBS cited softer net bookings — including the trajectory of the NBA business — and lower estimates as its rationale, per Reuters. The Swiss bank now models fiscal 2027 net bookings of $8.7 billion and fiscal 2028 at $9.1 billion, both marked down.

That NBA softness has a concrete face. NBA 2K27 has moved more than 4 million units since its September launch and still fell short of internal expectations — the second-best series debut on record, yet not enough to hit the company's own plan. A powerhouse brand, in other words, can post gaudy unit numbers and still disappoint on the bottom line. Recurring consumer spending across the business slid 9% year over year in the quarter, worse than the 5% decline Take-Two had forecast, with NBA 2K the chief drag.

Vinyl, Download Codes, and the 98% Economy

Strip away the quarterly noise and a structural story sits underneath. Strauss Zelnick told The Game Business that physical games are destined for a small collector's market, likening them to vinyl records. The numbers back the analogy: digital sales now account for 98% of Take-Two's business, leaving just 2% to physical retail.

Grand Theft Auto VI illustrates the shift neatly. When preorders opened on June 25, Rockstar confirmed the physical edition would ship with a download code rather than a disc — a box on the shelf, a digital delivery inside it. Collector demand gets its outlet without altering the company's digital trajectory.

For investors, that means the hard part of the transition is largely behind Take-Two. What remains is converting digital demand into dependable revenue — and on that front, the early signals are loud. Zelnick said Monday that GTA VI preorders are running far beyond original expectations, an "unprecedented" level by the company's own account. Sony and Microsoft each labeled the title the most-preordered game in their respective stores. GamesRadar reported Tuesday that Zelnick expects the momentum to continue. The release date stands at November 19, 2026.

The Bottleneck Isn't Distribution — It's the Content

Digital delivery offers no protection against a creative miss, and the cost side of the ledger is getting heavier. Bloomberg reported Tuesday on rising development budgets, mass layoffs, and studio closures across the industry. GTA VI's development budget is estimated at more than $1 billion; Take-Two has not confirmed a cost figure.

Zelnick, speaking at the WSJ Tech conference, defended the extra development months as necessary to avoid creative compromises. He also characterized the savings achieved so far through artificial intelligence and machine learning as relatively modest — cold comfort for anyone hoping cheaper production might offset the spending.

Which leaves the investment case resting on a single hinge: whether the extraordinary attention around GTA VI converts into sustained purchases and spending that can carry the weaker parts of the portfolio. The digital dominance and the preorder surge both argue in Take-Two's favor. The November 2026 launch will show how much that disc-free new world is actually worth to shareholders.