Ken Griffin

Citadel Investment Group has upped its stake in Take-Two Interactive Software, Inc. (NASDAQ:TTWO), according to a filing with the SEC. Ken Griffin’s value hedge fund now owns 5,502,059 shares of the company  equal to a 6.06% stake. According to the hedge fund’s third quarter 13F, it owned 3,035,471 shares. Citadel is now the fourth largest shareholder of the firm. The game maker has been attracting other large investors recently.  Carl Icahn, has boosted his stake in the past several weeks to 13.4 percent of shares outstanding, making him the largest shaeholder. Icahn famous for his activism, has not sought to make any changes yet.

Three key industry themes seem to have emerged this holiday. 1) Holiday is tracking better than expected. Concerns around social competition and/or console fatigue have proven overly conservative. 2) The top 5 holiday games as a group are growing. Long-tail titles are, in contrast, selling exponentially worse as game quality issues are magnified by negative reviews and social media. 3) The Xbox 360 and PS3 consoles continue to be relevant in 100 million households globally. This represents the largest active console installed base in video game history.

2011’s Modern Warfare 3 made by Activision Blizzard, Inc. (NASDAQ:ATVI) holds the record for biggest 5-day entertainment launch grossing $775 million globally. Some analysts believe that Take-Two Interactive Software, Inc. (NASDAQ:TTWO)’s Grand Theft Auto Five (GTA V) can approach and possibly break this record as visibility around the title’s technical scope and launch timing have improved.

2008’s GTA IV is considered the best video game ever made based on its industry leading 98 metacritic rating. It is difficult to predict how GTA V will compare to prior GTA’s, but it appears the open-world environment will be materially larger than GTA IV, Red Dead Redemption or 2004’s San Andreas.

In addition, the GTA V’s graphics are expected to be a quantum leap forward with extraordinary attention to detail on both the macroenvironment and micro-environment level. Finally, the creativity of the game concept including how gamers will jump between three separate protagonists, the thoughtful design of the in-game missions and the potential for multiplayer and co-op modes suggests
Rockstar is aiming to create a truly epic and unrivaled interactive entertainment experience.

Disclosure: No position