Does Take-Two Interactive Software, Inc. (TTWO) have an economic moat?

MoatScan AI rates Take-Two Interactive Software, Inc. (TTWO) 55/100 for moat strength, assessed across five sources of competitive advantage: network effects, switching costs, intangible assets, cost advantages and efficient scale. Take-Two has a real but concentrated competitive advantage built around a small number of world-class intellectual properties and publishing labels.

What is Take-Two Interactive Software, Inc.'s moat score?

Take-Two Interactive Software, Inc. (TTWO) has a moat score of 55/100. The score is a weighted average of five pillar ratings: network effects, switching costs, intangible assets, cost advantages, and efficient scale. A higher score means the competitive advantages MoatScan AI identifies are wider and more durable.

How does TTWO's share price compare with its estimated fair value?

MoatScan AI estimates TTWO's intrinsic value with a discounted cash flow (DCF) model and shows how that estimate compares with the market price at the time of analysis. The estimate updates with each new financial analysis and is a research estimate, not a recommendation.

What is Take-Two Interactive Software, Inc.'s fair value estimate?

MoatScan AI derives Take-Two Interactive Software, Inc.'s (TTWO) fair value per share from a discounted cash flow (DCF) model built on the company's reported financials, analyst growth forecasts, and a discount rate reflecting its cost of capital. The Financial Analysis tab shows the estimate alongside every assumption behind it.

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TTWO$201.44

Take-Two Interactive Software, Inc.

Last Updated

Sep 28, 202614 days ago

Moat & Trend

Management

AI Impact

Competitive Radar

Moat Score

55/100

Executive Summary

Take-Two has a real but concentrated competitive advantage built around a small number of world-class intellectual properties and publishing labels. Rockstar’s Grand Theft Auto franchise remains one of the most valuable entertainment assets in the market, while 2K’s NBA 2K and Civilization series add recurring demand and strong brand recognition. The company also benefits from long-running NBA licensing, digital distribution, and an expanded mobile presence through Zynga. However, this is not a broad, deeply diversified moat: success still depends heavily on hit releases, creative execution, and the durability of a few franchises. The recent portfolio pruning of weaker labels highlights discipline, but also underscores that the moat is narrower than a multi-category platform or a true natural monopoly. Overall, Take-Two merits a Narrow Moat with a stable trajectory.

Network Effects

Community Pull, Not True Network

Pillar Strength

5/10

Take-Two has some ecosystem reinforcement, but it is not a classic network-effects business. Grand Theft Auto Online, NBA 2K’s MyTeam/MyCareer modes, and the broader social dimension of live-service play make the games more valuable when friends and communities remain active. That can improve retention and spending, and it helps annual sports releases preserve engagement. Still, players can multi-home easily across competing games, and the value created by each additional user is indirect rather than compounding in a platform sense. The most durable communities sit inside franchises, not across the company as a whole. That means Take-Two captures engagement benefits, but not the self-reinforcing network density seen in social media or marketplaces.

Switching Costs

Moderate Franchise Inertia

Pillar Strength

5.5/10

Switching costs are meaningful but not deep. Players who invest time, money, and identity into GTA Online or NBA 2K modes may hesitate to leave because progression, friends, and purchased digital content are tied to that ecosystem. Annual sports games also create soft lock-in through roster familiarity, modes, and established habits. However, switching between entertainment products is still easy in an economic sense: consumers can move to Fortnite, EA Sports FC, or other open-world and sports alternatives with limited friction. The lock-in mostly comes from accumulated time and social momentum, not from technical interoperability, contracts, or exclusive data. That makes the barrier real, but not strong enough to be considered a major moat pillar.

Intangible Assets

Elite Brands And Licenses

Pillar Strength

8.5/10

This is Take-Two’s strongest pillar. Rockstar is one of gaming’s most powerful brands, and Grand Theft Auto is a cultural property with release-day demand that rivals almost any entertainment launch. 2K and Civilization also carry durable recognition, while NBA 2K and PGA Tour 2K benefit from official league and player relationships that are difficult to replicate. The NBA license, in particular, gives Take-Two a premium sports position and a trust advantage with consumers and partners. These intangibles are not just marketing assets; they create pricing power, preorders, and long-tail monetization. Few publishers can match the combination of brand equity, licensed access, and franchise identity that Take-Two has assembled.

Cost Advantages

Scale Helps, Not Dominates

Pillar Strength

4.5/10

Take-Two has some scale advantages in distribution, marketing reach, and live operations, but it is not structurally low-cost relative to rivals. AAA game development is expensive, hit-driven, and increasingly front-loaded, which means the company often spends heavily to support a few tentpole titles. Larger scale can spread marketing, engine, and live-service infrastructure costs across more units, and mobile operations through Zynga offer some efficiency benefits. Even so, competitors such as Electronic Arts, Activision-style peers, and well-capitalized private publishers can match or exceed spending. Take-Two’s economics are therefore driven more by successful monetization of premium IP than by a durable cost edge. The gap is helpful, but not hard for rivals to narrow.

Efficient Scale

Selective Oligopoly Positions

Pillar Strength

4/10

Take-Two does not operate in a true natural monopoly or across a market with only a few viable players. The broader video game industry is highly competitive and fragmented. However, it does occupy selective pockets of efficient scale, especially in licensed sports simulation and blockbuster open-world publishing, where only a limited number of publishers can credibly support the economics, relationships, and production cadence required. The NBA 2K and PGA Tour businesses benefit from exclusive or semi-exclusive rights, and Rockstar’s prestige makes it harder for entrants to challenge the top end of the market. Still, these are franchise-level advantages rather than industry-wide structural barriers. The company has pockets of scarcity, not a sweeping efficient-scale moat.

Moat Type & Trend

Why this company earns its moat rating, and where the moat is heading

Moat Type

Narrow Moat

Trend

Stable

Why This Rating

Take-Two earns a Narrow Moat because its strongest advantages are concentrated in a handful of elite franchises rather than across the whole business. Rockstar’s Grand Theft Auto and Red Dead, plus 2K’s NBA and Civilization, create enduring consumer awareness, publisher leverage, and launch-day demand that smaller rivals cannot easily match. But the moat is not Wide because the catalog is uneven, hit-driven, and reliant on a few creative teams, licenses, and release cycles. If those franchises underperform or lose cultural relevance, the company’s advantage narrows quickly; that fragility keeps the moat below the threshold for a truly durable, all-weather franchise empire.

Why This Trend

The moat looks Stable because Take-Two’s core assets remain intact and in several cases are being reinforced by scale in digital distribution, live services, and mobile. The NBA 2K agreement was renewed on a long runway, Zynga broadened mobile capability, and Rockstar continues to control one of the industry’s most valuable franchises. Offsetting that, the company has shut or sold weaker labels and faces development delays, labor disputes, and rising AAA costs. The structural position would turn Positive if Take-Two consistently converted more of its IP into recurring engagement and broadened success beyond a few tentpole releases.

Management Quality Assessment

Evaluating leadership track record, capital allocation, and governance

Verdict

Competent

Strauss Zelnick has led Take-Two for nearly two decades, serving as chairman since 2007 and CEO since 2011. He is a hired operator rather than a founder, and the company’s independent board and committee structure provide solid oversight. Management has generally favored strategic, IP-building acquisitions—Rockstar North/DMA, Social Point, Nordeus and Gearbox—while avoiding dividends and repurchases, but that discipline has not translated into strong economic returns: normalized ROIC is roughly flat to slightly negative. Insider ownership is low at about 0.4% companywide and appears only modestly aligned; Zelnick’s compensation is very low versus peers, so pay is not a concern. No major related-party or board independence red flags stand out.

Key Highlights

Strauss Zelnick has been chairman since 2007 and CEO since 2011, giving Take-Two a long-tenured, stable leadership model through several console cycles and multiple strategic transitions.
Capital allocation has emphasized acquisitions of valuable IP and studio capability, including DMA/Rockstar North, Social Point, Nordeus and Gearbox, rather than dividends or buybacks.
Despite that acquisition discipline, Take-Two’s ROIC remains very weak, hovering near zero and slightly negative on recent trailing figures, suggesting limited economic returns on invested capital.
Insider ownership is low at roughly 0.4% companywide, with Zelnick holding about 0.12%; recent insider sales suggest only modest alignment, though the trend is not fully clear.
Governance looks solid, with a majority-independent board and fully independent audit, compensation and governance committees, and no obvious related-party red flags.

AI Impact Assessment

Evaluating how AI strengthens or disrupts existing moat pillars

Net verdict: Net Pressure. AI should modestly improve Take-Two’s development efficiency, QA, localization, forecasting and live-service operations, but those gains are mainly cost and workflow benefits rather than moat-expanding advantages. The company’s moat still rests on intangible assets — Rockstar, NBA 2K and Zynga franchises, brand equity, and recurrent player spending loops — which AI does not replicate. Near term, AI may also compress labor and content-production economics, reducing differentiation in mobile and annualized titles. The key uncertainty is whether AI can materially accelerate AAA production without diluting quality, or whether it simply trims expenses while allowing rivals to access the same tools and narrow the gap.

AI Opportunity Highlights

5 / 10

Take-Two can use first-party player telemetry from Rockstar, NBA 2K and Zynga to improve personalization, retention and monetization in live-service titles.
AI-assisted QA, localization and release forecasting can reduce development friction across a multi-franchise pipeline and support margin expansion.
Zynga’s mobile-scale repeat-player data gives Take-Two more training signal than smaller publishers for recommendation and live-ops automation.
If AI shortens iteration cycles, Take-Two can ship more post-launch content and updates for recurrent-spending franchises, deepening lock-in.

AI Threat Highlights

6 / 10

Generative art, animation and code tools lower the cost of building competent game features, making mid-tier studios and indie teams more capable competitors.
Procedural content and personalization are becoming platform-level capabilities, which can commoditize parts of the player experience that once differentiated publishers.
AI substitutes can erode demand for third-party localization, QA and support work, and those savings are available to rivals as well.
Annualized sports and mobile titles face the fastest imitation because AI reduces the effort required to iterate content, seasonal updates and live ops.

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Last Updated

Sep 28, 202614 days ago

Target Price

Analyst Consensus

FAIR VALUE

Financial Strength

Financial Score

50/100

Executive Summary

Take-Two Interactive’s most notable strength is its improving growth outlook, with revenue forecast to advance from $6.66B to $8.50B and then $9.25B, while EPS is projected to rebound sharply from negative levels to $6.87 and $10.29. That said, current fundamentals remain mixed: revenue has expanded materially since FY2022, but income quality is still weak, as operating margins remain negative at -1.19% and profitability ratios are still negative despite a smaller TTM loss of $320M. Cash flow has also been volatile, though FY2026 free cash flow of $434.1M and TTM free cash flow of $298.7M are encouraging. The balance sheet is solvent but only modestly liquid, with $173.5M of working capital and $2.95B of debt. Overall, the profile is improving, but the ratings still reflect meaningful earnings, liquidity, and leverage risk.

Income Statement

Revenue · Margins · Profitability

Section Score

3.5/10

Revenue has grown from $3.50B in FY2022 to $6.66B in FY2026, with TTM at $6.69B, but the path is uneven and growth has slowed versus the FY2023 surge. Net income remains deeply negative, though TTM loss of $320M is far smaller than FY2025’s $4.48B, which was heavily distorted by goodwill impairment and other write-downs. Gross margin has been fairly resilient around 53%–58%, but operating margin has stayed negative and only improved to -1.19% in FY2026, suggesting revenue growth has not converted cleanly into operating profit. For a software/gaming publisher, that margin profile is weak. Positive TTM free cash flow of $299M is a key offset, but expense growth, restructuring, and large one-offs remain notable risks.

Financials are in millions USD unless otherwise specified

Metric	FY 2022	FY 2023	FY 2024	FY 2025	FY 2026	TTM
Period Ending	Mar 31, 2022	Mar 31, 2023	Mar 31, 2024	Mar 31, 2025	Mar 31, 2026	Jun 30, 2026
Revenue	3,505	5,350	5,350	5,634	6,656	6,687
Revenue Growth	3.91%	52.64%	-0.01%	5.31%	18.15%	15.30%
Net Income	418	-1,125	-3,744	-4,479	-298.2	-320.4
Net Income Growth	-29.02%	—	—	—	—	—
Profit Margin	11.93%	-21.02%	-69.99%	-79.50%	-4.48%	-4.79%
Revenue as Reported	3,505	5,350	5,350	5,634	6,656	6,687

Data as of Jun 30, 2026

Balance Sheet

Assets · Liabilities · Equity

Section Score

5.5/10

Take-Two’s balance sheet shows modest near-term liquidity but still manageable overall structure. Current assets were $2.96B versus current liabilities of $2.78B, leaving only $173.5M of working capital, so the short-term cushion is thin. Cash and short-term investments of $1.83B cover part of the $2.95B debt load, but net debt remains negative at $1.12B. Total assets of $9.06B exceed total liabilities of $5.46B, and shareholders’ equity is $3.61B, indicating solvency is intact. However, equity quality is weakened by $7.39B of accumulated deficits and a heavy intangible/goodwill base, which makes the balance sheet more sensitive to asset write-downs or operating stress.

Financials are in millions USD unless otherwise specified

Metric	FY 2022	FY 2023	FY 2024	FY 2025	FY 2026	Current
Period Ending	Mar 31, 2022	Mar 31, 2023	Mar 31, 2024	Mar 31, 2025	Mar 31, 2026	Jun 30, 2026
Total Current Assets	3,871	2,508	2,260	2,816	3,200	2,957
Total Assets	6,546	15,862	12,217	9,181	9,383	9,064
Total Current Liabilities	2,105	3,852	2,406	3,616	2,589	2,784
Total Liabilities	2,737	6,820	6,549	7,043	5,872	5,456

Data as of Jun 30, 2026

Cash Flow Statement

Operations · Investing · Financing

Section Score

4.5/10

Cash generation has been highly uneven. Operating cash flow fell from $258M in FY2022 to near break-even in FY2023, then turned negative in FY2024 and FY2025 before rebounding to $624.3M in FY2026; TTM remains positive at $500.2M, but the swing shows limited stability. Free cash flow has also been weak, negative in three of the last four fiscal years before improving to $434.1M in FY2026 and $298.7M TTM. CapEx has stayed moderate near $170M-$202M, so the bigger issue is working capital pressure, especially the large negative change in other net operating assets. Debt activity has been active, while buybacks look modest.

Financials are in millions USD unless otherwise specified

Metric	FY 2022	FY 2023	FY 2024	FY 2025	FY 2026	TTM
Period Ending	Mar 31, 2022	Mar 31, 2023	Mar 31, 2024	Mar 31, 2025	Mar 31, 2026	Jun 30, 2026
Operating Cash Flow	258	1.1	-16.1	-45.2	624.3	500.2
Operating Cash Flow Growth	-71.72%	-99.57%	—	—	—	394.76%
Free Cash Flow	99.4	-203.1	-185.2	-234.9	434.1	298.7
Free Cash Flow Growth	-88.21%	—	—	—	—	—
Free Cash Flow Margin	2.84%	-3.80%	-3.46%	-4.17%	6.52%	4.47%

Data as of Jun 30, 2026

Key Ratios

Liquidity · Leverage · Efficiency · Returns

Section Score

4/10

Take-Two’s liquidity has improved from earlier weakness, with the current ratio at 1.06 and quick ratio at 0.90 versus 0.65 and 0.48 in FY2023, though both remain only adequate and have slipped from FY2025 levels. Leverage is elevated but more manageable than the FY2025 spike, with debt/equity at 0.82 and debt/EBITDA at 3.49, still above FY2022 and well above the low-debt profile seen at the start of the period. Asset turnover is strong at 0.71, showing solid use of assets. Profitability remains the main issue: ROE, ROA, ROIC, and ROCE are all negative in the latest periods, indicating weak returns despite improving scale and efficiency.

Ratios are dimensionless unless otherwise noted

Metric	FY 2022	FY 2023	FY 2024	FY 2025	FY 2026	Current
Period Ending	Mar 31, 2022	Mar 31, 2023	Mar 31, 2024	Mar 31, 2025	Mar 31, 2026	Sep 25, 2026
Debt / Equity Ratio	0.07	0.39	0.62	1.92	0.84	0.82
Quick Ratio	1.54	0.48	0.72	0.68	1.1	0.9
Current Ratio	1.84	0.65	0.94	0.78	1.24	1.06
ROEReturn on Equity (ROE)	11.71%	-17.50%	-50.91%	-114.76%	-10.56%	-9.04%
ROAReturn on Assets (ROA)	5.42%	-3.21%	-2.43%	-3.04%	-0.53%	-0.62%
ROICReturn on Invested Capital (ROIC)	42.58%	-8.85%	-5.46%	-7.89%	-1.72%	-2.02%
ROCEReturn on Capital Employed (ROCE)	12.30%	-4.80%	-5.60%	-9.40%	-1.20%	-1.50%

Data as of Sep 25, 2026

Growth

Revenue · EPS · Valuation · Estimates

Section Score

7.5/10

Take-Two shows a sharp swing from the prior period’s uneven revenue path into a clearer growth inflection ahead, with revenue expected to rise from $6.66B to $8.50B and then $9.25B. That implies accelerating top-line momentum overall, even though the second forecast year moderates to high-single-digit growth after a strong first step up. EPS is also projected to rebound strongly within the forecast window, moving from negative to $6.87 and then $10.29, suggesting earnings leverage and improving margins as scale builds. Analyst sentiment is very constructive: a Strong Buy consensus from 29 analysts, a wide but positive target range of $170 to $368, and a stable recommendation mix with only minor month-to-month shifts.

Third-party Analyst Price Targets

Low$170-15.61%

Median$290+43.96%

Average$286.44+42.20%

High$368+82.68%

Strong BuyConsensus rating and price targets published by third-party analysts. Not a MoatScan AI view.

29 analysts

Third-party Analyst Recommendation Trends

Rating	Apr '26	May '26	Jun '26	Jul '26	Aug '26	Sep '26
Strong Buy	24	25	26	26	25	25
Buy	2	2	2	2	3	3
Hold	1	0	0	0	0	0
Sell	1	1	1	1	1	1
Strong Sell	0	0	0	0	0	0
Total	28	28	29	29	29	29

Forecast · Analyst Estimates

Revenue This Year8.50B

+27.75%from 6.66B

FY 2027

Revenue Next Year9.25B

+8.82%from 8.50B

FY 2028

EPS This Year· non-GAAP adj.6.87

+67.72%from 4.10

FY 2027

EPS Next Year· non-GAAP adj.10.29

+49.78%from 6.87

FY 2028

Historical · Reported Actuals

Metric	FY 2022	FY 2023	FY 2024	FY 2025	FY 2026
Revenue	3.50B	5.35B	5.35B	5.63B	6.66B
Revenue Growth	+3.91%	+52.64%	+0.00%	+5.31%	+18.14%
EPS (GAAP diluted)	3.58	-7.03	-22.01	-25.58	-1.62
EPS Growth	-29.67%	-296.37%	-213.09%	-16.22%	+93.67%

Revenue in USD · EPS per share · Price targets in USD

Data as of Mar 31, 2026 · Forecast EPS is analyst non-GAAP adjusted; historical EPS is GAAP diluted — not directly comparable.

Fair Value Estimation

DCF · Model estimate vs. price -51.7% · Price above model estimate

AI Fair Value Estimate (DCF)

$97.28vs$201.44

Model estimate vs. price-51.7%

Price above model estimate

A discounted cash flow framework is appropriate for Take-Two because the business has a clear operating ramp, a measurable path to cash generation, and economics that can be modeled through release cycles, margin expansion, and capital intensity. The projected free cash flow progression from negative in year one to positive by year ten suggests improving margin conversion, disciplined capex relative to revenue, and a gradual fade from early investment phase economics toward a steadier terminal profile.

AI Valuation Commentary

A DCF is the right lens for Take-Two because the business should eventually convert a growing revenue base into durable free cash flow, but the valuation remains highly sensitive to long-run margin durability, the 6.7% discount rate, and the 4% terminal growth assumption. Under these assumptions, fair value is 97.28 USD per share versus a current price of 201.44 USD, implying a margin of safety of -51.71% and an overvalued verdict. The downside case reflects limited room for error if operating margins fail to expand as expected or if growth normalizes faster. A bull case would require stronger margin leverage, sustained cash conversion, and a lower risk hurdle; a bear case would come from weaker execution or slower growth fade.

DCF Assumptions

WACC

6.7%

Weighted avg cost of capital

Revenue Growth (10Y)

4.7%

CAGR assumption

EBITDA Margin

9.5%

Steady-state projection

CapEx / Revenue

3.3%

Capital investment

Terminal Growth

4.0%

Long-run growth rate

Projection Period

10 yrs

Explicit forecast horizon

Projected Cash Flows

Values in millions USD

Year	Revenue	EBITDA	FCF	Discounted FCF
Yr 1	6,790	208	-122	-114
Yr 2	7,107	360	78	69
Yr 3	7,520	536	238	196
Yr 4	7,761	706	353	272
Yr 5	8,237	900	515	372
Yr 6	8,590	969	587	398
Yr 7	8,801	1,026	640	406
Yr 8	9,312	1,112	676	402
Yr 9	9,809	1,202	742	414
Yr 10	10,275	1,291	810	423
Terminal Value (PV)				16,312

Key Valuation Ratios

Current vs 5-year average

Forward PE

24.56x

5Y avg 32.21x

-23.7% vs avg

P/FCF Ratio

126.10x

No history available

PS Ratio

5.63x

5Y avg 5.11x

+10.2% vs avg

A multiple below its own multi-year average can indicate the stock is cheaper than its recent history — context, not a standalone signal.

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Frequently asked questions about Take-Two Interactive Software, Inc.

Does Take-Two Interactive Software, Inc. (TTWO) have an economic moat?: MoatScan AI rates Take-Two Interactive Software, Inc. (TTWO) 55/100 for moat strength, assessed across five sources of competitive advantage: network effects, switching costs, intangible assets, cost advantages and efficient scale. Take-Two has a real but concentrated competitive advantage built around a small number of world-class intellectual properties and publishing labels.Sign in free to see the Moat Type verdict and the pillar-by-pillar reasoning.
What is Take-Two Interactive Software, Inc.'s moat score?: Take-Two Interactive Software, Inc. (TTWO) has a moat score of 55/100. The score is a weighted average of five pillar ratings: network effects, switching costs, intangible assets, cost advantages, and efficient scale. A higher score means the competitive advantages MoatScan AI identifies are wider and more durable.Sign in free to see each pillar rating, the Moat Type verdict and the moat trend.
How does TTWO's share price compare with its estimated fair value?: MoatScan AI estimates TTWO's intrinsic value with a discounted cash flow (DCF) model and shows how that estimate compares with the market price at the time of analysis. The estimate updates with each new financial analysis and is a research estimate, not a recommendation.Sign in free to see the fair value estimate and how it compares with the price.
What is Take-Two Interactive Software, Inc.'s fair value estimate?: MoatScan AI derives Take-Two Interactive Software, Inc.'s (TTWO) fair value per share from a discounted cash flow (DCF) model built on the company's reported financials, analyst growth forecasts, and a discount rate reflecting its cost of capital. The Financial Analysis tab shows the estimate alongside every assumption behind it.Sign in free to see the estimate and the full assumptions behind it.

Disclaimer: The analysis on this page is generated by AI and is provided for informational purposes only. It does not constitute financial advice, investment recommendations, or an offer to buy or sell any security. Always conduct your own due diligence and consult a qualified financial adviser before making any investment decisions. MoatScan AI is an educational research tool. It is not licensed or registered with the Securities Commission Malaysia or any other financial regulator, and it holds no positions in, and receives no compensation from, any company analysed.

TTWO$201.44

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Frequently asked questions about Take-Two Interactive Software, Inc.

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