After years of doubting that Take-Two can be successful without a Grand Theft Auto release, analysts are beginning to back the publisher for long term profitability.
Expectations are that the company will beat estimates when it announces fourth quarter results on Thursday, as sales for the publisher are up 50 per cent on last year, primarily do to the performance of NBA 2K11.
Wedbush Morgan estimates Take-Two's latest basketball title sold around 1.9 million units this quarter and benefited from rival Electronic Arts cancelling NBA Elite 11 - with those numbers the publisher is expected to beat revenues of $325 million.
"The company appears to be on a path to consistent profitability, and we are becoming more constructive," wrote the analyst firm.
"Red Dead Redemption presents a difficult comparison for next year, and we believe that without a GTA release, the company will generate only a modest profit in its new financial year.
"We are confident that Take-Two will release GTA in either 2011 or 2012 and BioShock Infinite in 2012, and think the company can generate sustainable earnings growth in each year if the timing of releases is right."
Earlier this year Take-Two shuffled its financial calendar, moving its fiscal year end from October to March.
This move will provide it with more time before announcing a date for the next Grand Theft Auto release, according to Wedbush, with the game expected before the current contracts with Rockstar employees run out in February 2012.
"The change in fiscal year avoids the dilemma about announcing GTA, as management will not provide FY:12 guidance until May or June 2011. While we remain confident that GTA is on track for release prior to the expiration of key employee contracts in February 2012, the company will likely wait to announce the game until midyear, either with its March earnings or at E3 in June."