Adobe Systems Incorporated (ADBE) Wins With Subscriptions, Activision Blizzard, Inc. (ATVI) Moves to Free

The only game company I would want right now is Take-Two Interactive Software, Inc. (NASDAQ:TTWO) as a speculative play on GTA V. I know the game will be a success, but I am not sure how much it will help the company’s bottom line and balance sheet in the first few months. I am also not sure how the market will react to the large development and marketing budget. That is why I would take only a speculative position even though with a product with the strength of GTA, Take-Two would be a buy.

Plentiful and varied DLC can help games bring in extra money over time. With a world as big as GTA, the company can have $0.99 DLC for clothes, cars, or guns and have $20 DLC that add new maps, missions, and characters.

Conclusion

I would refrain from entering Adobe Systems Incorporated (NASDAQ:ADBE) to getting in any deeper with Activision Blizzard, Inc. (NASDAQ:ATVI). Activision Blizzard is going to have to deal with the irrelevance of the subscription model soon, while Adobe has seen its stock rewarded for its shift to subscription. Take-Two Interactive Software, Inc. (NASDAQ:TTWO) is at $15, and while it’s up from where it was a few months ago, the move is within reason considering the recent market movements. With such a strong catalyst coming, there is potential along with some serious risk. A small position, or perhaps some options are best suited to the situation.

Nihar Patel has no position in any stocks mentioned. The Motley Fool recommends Activision Blizzard, Adobe Systems, and Take-Two Interactive . The Motley Fool owns shares of Activision Blizzard.

The article Adobe Wins With Subscriptions, Activision Blizzard Moves to Free originally appeared on Fool.com.

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