Take-Two Interactive Software Inc.’s (TTWO) hit video game Grand Theft Auto V recentlyfaced criticism for its mature content in Australia despite gaining worldwide popularity.
Departmental stores in Australia such as Target Australia and K-Mart have decided to not sell the game following a huge public protest against its content. The game casts teen players as car-stealing criminals and supposedly encourages players to murder women for entertainment.
Reportedly, over 40,000 people in Australia have slammed the game saying that its R-rated content was unsuitable for teenage video game players. They even petitioned on Change.org, calling retail stores to ban Grand Theft Auto V as it projects violence as a form of entertainment.
We believe that Take-Two Interactive’s business may not suffer a big loss from the withdrawal of Grand Theft Auto V from the Australian market as it continues to sell in North America and other parts of the world. However, a negative response and public uproar in the rapidly-growing Australian video game market (annual sales over $1 billion and around 11 million players) may dampen the overall popularity of the game.
This, in turn, may affect the company’s competitive position against the likes of Electronic Arts Inc. (EA), Activision Blizzard, Inc. (ATVI) and King Digital Entertainment plc (KING).
Meanwhile, Take-Two Interactive Software’s Chairman and CEO Strauss Zelnick voiced his disappointment over the recent issue. However, he believes that most of the content of Grand Theft Auto V is similar to that of other popular games.
Further, interactive games as the future of the video gaming industry should be perceived on par with books, television and movies and granted similar creative freedom. Currently, Grand Theft Auto V boasts Metascore of 97, reflecting its immense popularity in the interactive video games genre.
However, the market seemed less responsive to the latest episode of controversy and the company’s shares gained around 4% ($1.07) before closing at $28.11 on Wednesday.
Take-Two Interactive currently has a Zacks Rank #2 (Buy).
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