Take-Two shares rise premarket after GTA 6 trailer launch; analysts bullish

Take-Two shares moved higher in premarket deals Friday, as analysts said they were bullish on the GTA 6 maker's parent company following a successful trailer launch. Apparent bandwidth issues at Netflix and gaming streaming platform Twitch indicated huge viewer interest in the game, which is due out in November, 13 years after the previous instalment. Sales could hit $4.5 billion by launch week, according to analytics firm Newzoo.

Streaming Platforms Struggle Under Demand

Streaming platforms struggled to handle huge demand for the first official preview of the upcoming "Grand Theft Auto 6" on Thursday, sending shares of Take-Two, the game maker's parent company, higher in premarket.

In a rare move, Netflix was first to show an extended look at the game. Some viewers had to refresh the page after receiving error messages, indicating high usage levels. "Some members briefly experienced an issue accessing Netflix, but we quickly recovered," the company told CNBC.

Game streaming platform Twitch, where many viewers were posting their reactions, also experienced bandwidth issues when the trailer was released, according to analysts at Wells Fargo. An assessment of player reactions was "largely positive," the analysts added.

Launch Details and Sales Projections

The sixth instalment in the franchise is due to launch on Nov. 19 for PlayStation 5 and Xbox Series X/S, and is riding expectations that it could rival its predecessor as one of the most profitable entertainment products of all time.

Global preorders totaled an estimated $260 million, according to analytics firm Newzoo, signaling the potential for $4.5 billion in sales by launch week.

"I've never seen Netflix do anything where they put a game on display, and it just shows the power of this particular title, it's in a league of its own," Christopher Dring, editor-in-chief and co-founder of analysis firm The Game Business, told CNBC's "Squawk Box Europe" on Friday.

GTA 5 is still in the top five bestselling video games every year, despite being released 13 years ago, Dring noted. The response to Thursday's gameplay debut indicated that leaks of the content in advance would not impact the launch commercially, he continued. Rockstar Games, which makes the GTA franchise, had called the leaks "heartbreaking."

Market Reaction and Analyst Views

Shares of Rockstar Games' parent company Take-Two nudged 2.5% higher in premarket trading Friday.

Analysts at both Morgan Stanley and JPMorgan described themselves as "bullish" on the stock in notes published Friday, as they pointed to the increased interest in gaming publishers from institutional and retail investors in the run-up to a highly anticipated launch.

However, Wells Fargo analysts said that Take-Two shares also needed some "positive news" regarding the new version of its separate multiplayer game GTA Online in order to achieve a sustained rerating higher. The successful GTA 6 trailer release only slightly boosted unit sales expectations, they said, while there are downside risks that sales miss expectations or the launch is delayed.

Gamer Grumbles

The GTA 6 preview follows a mixed reaction from players to the news that GTA 6 would only be released as a digital download, with no physical disc.

The alleged source of the leaked content has claimed the leaks were a protest over Rockstar's release strategy, and Sony's plan to end new PlayStation disc production in 2028.