Take-Two Interactive Software reported a strong third quarter of fiscal year 2026 and raised its full-year outlook, according to reports released on . The earnings beat comes as the company addresses investor concerns surrounding the potential impact of generative AI on game development and its long-term strategy, particularly following Google’s recent announcement of its Project Genie AI tool.
The company’s stock was trading at $212.17 as of the report, showing a 15.6% return over the past year. However, recent trading has been volatile, with a 13.6% decline over the past week and a 15.7% decline both month-to-date and year-to-date. This mix of longer-term gains and recent pullback is framing how investors are interpreting the earnings report and outlook.
Grand Theft Auto VI Remains a Key Focus
Central to investor interest is the reaffirmed release of Grand Theft Auto VI. Take-Two management continues to position the upcoming title as a key driver of future engagement and revenue. The anticipation surrounding GTA VI is significant, and its launch is expected to heavily influence the company’s performance.
Navigating the Generative AI Landscape
Take-Two CEO Strauss Zelnick has publicly addressed the emergence of generative AI, specifically in response to concerns raised by Google’s Project Genie. Zelnick stated he was “a little confused” by the market’s reaction to the news, noting that the video game industry has been built on machine learning and artificial intelligence since its inception. He expressed enthusiasm about the potential benefits of generative AI for the future of game development.
Despite the broader industry exploration of AI, Zelnick emphasized that generative AI has played “zero part” in the creation of Grand Theft Auto VI. This signals a commitment to maintaining a hands-on, creative approach to development for its flagship franchise, prioritizing manual craftsmanship over automated generation.
Embracing AI Through Pilot Programs
While GTA VI’s development remains untouched by generative AI, Take-Two is actively exploring the technology through “hundreds of pilots” across its various game studios. The company is “embracing generative AI” to assess its potential for improving efficiency and streamlining workflows. This suggests a strategic approach to integrating AI tools where appropriate, while carefully considering the impact on creative control and development timelines.
Zelnick indicated that Take-Two is focused on leveraging AI to become “the most efficient company in the entertainment business.” This ambition suggests a broader effort to optimize operations and reduce costs through the adoption of new technologies.
Financial Performance and Outlook
The Q3 2026 earnings report demonstrated operational momentum and continued investment. Net bookings reached US$1 billion, indicating strong demand for Take-Two’s products. The company’s financial performance is being closely watched by investors as it navigates the evolving landscape of the gaming industry and the potential disruption caused by AI.
DA Davidson reaffirmed a ‘buy’ rating for Take-Two, indicating continued confidence in the company’s prospects. The stock maintained a relatively stable position following the earnings release.
Looking Ahead to Fiscal Year 2027
Take-Two anticipates achieving record results in fiscal year 2027, largely driven by the expected success of Grand Theft Auto VI. This optimistic outlook reflects the company’s confidence in its pipeline and its ability to capitalize on the growing demand for high-quality gaming experiences.
The company’s stance on AI suggests a cautious yet open-minded approach. While acknowledging the potential benefits of generative AI, Take-Two is prioritizing creative control and quality, particularly for its most valuable franchises. This strategy aims to balance innovation with the preservation of the core values that have made the company a leader in the gaming industry.
