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NBA 2k23 will ‘sell a record number of units’: Analyst

Josh Schafer
·Reporter
·2-min read

Take-Two Interactive (TTWO) began accepting pre-orders for NBA2K23 on Thursday and according to one Wall Street analyst, it could be the biggest year ever for the NBA video game.

“I think they are going to sell a record number of units for the game and probably do $600 million of revenue,” Michael Pachter, Wedbush Securities managing director, said on Yahoo Finance Live (video above).

The NBA 2K franchise has been a rising revenue driver for Take-Two Interactive. In the company’s most recent earnings release on May 16, Take-Two Interactive cited the NBA 2K franchise as one of the top contributors to net bookings and recurrent consumer spending. During the most recent NBA season, it surpassed the prior year's sales and sold more than 10 million copies, according to Chairman and CEO Strauss Zelnick.

“Downloads of NBA 2K Mobile increased nearly 25% as compared with fiscal 2021,” Zelnick said on the company’s earnings call. “We see a significant opportunity to add unique and innovative experiences throughout the game and focus on expanding our player base.”

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The loyalty of the NBA 2K franchise customer amid rising inflation and looming recession fears could be crucial to the Take-Two Interactive story over the second half of 2022.

Pachter, who currently has an outperform rating on Take-Two and sees a potential 30% upside on the stock over the next 12 months, argued that NBA 2K’s relevance to Take-Two Interactive’s overall business performance has been diluted.

The company completed its $12.7B acquisition of mobile games company Zynga in May. Previously, NBA 2K drove about $500 million of the the total $3.5 billion of Take-Two’s yearly revenue. With the addition of Zynga, Pachter estimated Take-Two’s yearly revenue nearly doubling to about $6.5 billion and therefore lessening 2K’s value.

The larger looming question for Take-Two’s stock, which has fallen nearly 30% this year, will be the strength of the consumer beyond franchises like NBA2K.

“The question really is: How bad is the recession? How long is it?” Pachter said. “Is it going to impact employment? I think not long, not through holiday, probably not going to impact employment very much.”

Josh is a producer for Yahoo Finance.

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