In the fast-evolving world of electronic gaming, Take-Two Interactive Software, Inc. (TTWO) and Electronic Arts Inc. (EA) stand as two titans competing for market dominance. Both companies share a rich legacy in interactive entertainment and a strong presence across consoles, PCs, and mobile platforms. Their innovative strategies and diverse game portfolios make them natural rivals. This article will analyze their strengths and risks to help you decide which is the more compelling investment opportunity.
Table of contents
Companies Overview
I will begin the comparison between Take-Two Interactive Software, Inc. and Electronic Arts Inc. by providing an overview of these two companies and their main differences.
Take-Two Interactive Software Overview
Take-Two Interactive Software, Inc. develops, publishes, and markets interactive entertainment solutions globally. It operates under several brands, including Rockstar Games and 2K, offering a diverse portfolio of games across genres such as action/adventure, shooter, role-playing, and sports. The company targets console, PC, and mobile platforms, distributing products through retail, digital download, and streaming services.
Electronic Arts Overview
Electronic Arts Inc. develops, markets, publishes, and distributes games and services worldwide for consoles, PCs, and mobile devices. Its portfolio spans sports, racing, first-person shooter, action, and simulation genres, featuring major franchises like Battlefield, The Sims, and Apex Legends, alongside licensed titles such as FIFA and Madden NFL. EA primarily sells through digital channels, retail, and licensing agreements with third parties.
Key similarities and differences
Both Take-Two and EA operate in the electronic gaming and multimedia industry, developing and publishing games across multiple genres and platforms including consoles, PCs, and mobile. They monetize through retail, digital distribution, and licensing. However, Take-Two emphasizes flagship franchises like Grand Theft Auto and NBA 2K, while EA focuses on sports and licensed games. EA also has a longer market presence, having been incorporated in 1982 compared to Take-Two’s 1993 inception.
Income Statement Comparison
The table below compares key income statement metrics for Take-Two Interactive Software, Inc. and Electronic Arts Inc. for the fiscal year 2025, providing a snapshot of their financial performance.
| Metric | Take-Two Interactive Software, Inc. | Electronic Arts Inc. |
|---|---|---|
| Market Cap | 46.5B | 51.0B |
| Revenue | 5.63B | 7.46B |
| EBITDA | -3.0B | 2.02B |
| EBIT | -4.32B | 1.66B |
| Net Income | -4.48B | 1.12B |
| EPS | -25.58 | 4.28 |
| Fiscal Year | 2025 | 2025 |
Income Statement Interpretations
Take-Two Interactive Software, Inc.
Take-Two’s revenue showed solid growth from 3.37B in 2021 to 5.63B in 2025, a 67% increase overall. However, net income declined dramatically, turning deeply negative at -4.48B in 2025. While gross margins improved favorably to 54.36%, negative EBIT and net margins worsened, reflecting significant operating losses and margin deterioration in the latest year.
Electronic Arts Inc.
EA’s revenue steadily increased from 5.63B in 2021 to 7.46B in 2025, a 33% growth over the period, though it dipped slightly by 1.3% in the last year. Gross and EBIT margins remained strong and favorable, with a 79.32% gross margin and 22.28% EBIT margin in 2025. Net income rose to 1.12B despite a recent slight contraction in net margin and earnings per share.
Which one has the stronger fundamentals?
EA demonstrates stronger fundamentals with consistently favorable gross, EBIT, and net margins, alongside positive net income growth and solid profitability. In contrast, Take-Two’s revenue growth is overshadowed by substantial net losses and worsening profitability metrics. EA’s more stable income statement and margin performance suggest a financially healthier position between the two.
Financial Ratios Comparison
The table below presents a side-by-side comparison of key financial ratios for Take-Two Interactive Software, Inc. and Electronic Arts Inc. based on their most recent fiscal year data as of 2025.
| Ratios | Take-Two Interactive (TTWO) | Electronic Arts (EA) |
|---|---|---|
| ROE | -209.5% | 17.6% |
| ROIC | -64.98% | 11.32% |
| P/E | -8.10 | 33.78 |
| P/B | 16.98 | 5.93 |
| Current Ratio | 0.78 | 0.95 |
| Quick Ratio | 0.78 | 0.95 |
| D/E (Debt-to-Equity) | 1.92 | 0.35 |
| Debt-to-Assets | 44.7% | 17.9% |
| Interest Coverage | -25.9 | 26.2 |
| Asset Turnover | 0.61 | 0.60 |
| Fixed Asset Turnover | 7.32 | 12.74 |
| Payout ratio | 0% | 17.8% |
| Dividend yield | 0% | 0.53% |
Interpretation of the Ratios
Take-Two Interactive Software, Inc.
Take-Two shows mostly unfavorable ratios with a negative net margin at -79.5% and a steeply negative return on equity at -209.52%, signaling profitability and efficiency challenges. Its current and quick ratios below 1 indicate liquidity concerns. The company does not pay dividends, likely due to its negative earnings and reinvestment focus, while share buybacks are not indicated.
Electronic Arts Inc.
Electronic Arts presents a favorable profile with positive net margin of 15.02% and return on equity at 17.55%, reflecting solid profitability and capital efficiency. Its debt to equity ratio is low at 0.35, showing manageable leverage. EA pays dividends with a modest yield of 0.53%, balancing shareholder returns with stable cash flow coverage and moderate payout risk.
Which one has the best ratios?
Based on the evaluations, Electronic Arts holds a more favorable ratio profile with stronger profitability, better leverage management, and positive returns, while Take-Two faces significant financial weaknesses and no dividend payouts. EA’s higher proportion of favorable ratios supports a healthier financial standing compared to TTWO’s challenges.
Strategic Positioning
This section compares the strategic positioning of Take-Two Interactive Software, Inc. (TTWO) and Electronic Arts Inc. (EA), focusing on market position, key segments, and exposure to technological disruption:
Take-Two Interactive Software, Inc. (TTWO)
- Competes in electronic gaming with diversified brands and moderate competitive pressure.
- Key segments include console gaming ($2.1B), mobile ($2.9B), and PC products ($0.6B).
- Exposure to disruption through multi-platform presence including mobile and cloud streaming.
Electronic Arts Inc. (EA)
- Larger market cap and lower beta indicate stable position with competitive pressures.
- Focuses on live services ($5.5B), full game downloads ($1.5B), and packaged goods ($0.5B).
- Emphasizes digital distribution and live services, adapting to technological trends.
Take-Two Interactive Software, Inc. vs Electronic Arts Inc. Positioning
TTWO adopts a diversified segment approach with strong mobile and console presence, while EA concentrates on live services and digital downloads. TTWO’s varied portfolio offers multiple revenue streams; EA’s focus on live services drives recurring revenue but may heighten dependency risks.
Which has the best competitive advantage?
EA shows a durable competitive advantage with growing ROIC above WACC, indicating value creation and increasing profitability. TTWO’s declining ROIC below WACC signals value destruction and weakening profitability, reflecting a less favorable competitive moat.
Stock Comparison
The past year has seen significant bullish momentum for both Take-Two Interactive Software, Inc. and Electronic Arts Inc., with notable price appreciation and distinct trading volume dynamics shaping their market trajectories.
Trend Analysis
Take-Two Interactive Software, Inc. experienced a strong bullish trend over the past 12 months with a 62.42% price increase, although momentum has decelerated recently with a slight 3.73% decline from October 2025 to January 2026. Volatility remains elevated with a 38.97 standard deviation.
Electronic Arts Inc. also showed a bullish trend over the past year with a 45.37% price rise and decelerating momentum. The recent period from October 2025 to January 2026 saw a modest 2.05% gain, accompanied by lower volatility at a 1.73 standard deviation.
Comparing both stocks, Take-Two Interactive delivered the highest market performance with a 62.42% increase over the last year versus EA’s 45.37%, despite recent slight weakness in TTWO’s short-term trend.
Target Prices
The target price consensus for these leading gaming companies reflects optimistic analyst expectations.
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| Take-Two Interactive Software, Inc. | 300 | 252 | 282.5 |
| Electronic Arts Inc. | 210 | 168 | 201.91 |
Analysts expect Take-Two Interactive’s price to rise above its current 251.6 USD, while Electronic Arts’ consensus target slightly exceeds its current 204.41 USD share price. Both show moderate upside potential.
Analyst Opinions Comparison
This section compares analysts’ ratings and grades for Take-Two Interactive Software, Inc. (TTWO) and Electronic Arts Inc. (EA):
Rating Comparison
TTWO Rating
- Rating: D+ with a “Very Favorable” status
- Discounted Cash Flow Score: 2, Moderate status
- ROE Score: 1, Very Unfavorable status
- ROA Score: 1, Very Unfavorable status
- Debt To Equity Score: 1, Very Unfavorable status
- Overall Score: 1, Very Unfavorable status
EA Rating
- Rating: B with a “Very Favorable” status
- Discounted Cash Flow Score: 4, Favorable status
- ROE Score: 4, Favorable status
- ROA Score: 4, Favorable status
- Debt To Equity Score: 2, Moderate status
- Overall Score: 3, Moderate status
Which one is the best rated?
Based strictly on the provided data, EA is better rated overall with a B rating and higher scores across discounted cash flow, ROE, ROA, debt to equity, and overall score, compared to TTWO’s lower grades and scores.
Scores Comparison
Here is a comparison of the Altman Z-Score and Piotroski Score for both companies:
TTWO Scores
- Altman Z-Score: 2.67, indicating a moderate bankruptcy risk.
- Piotroski Score: 6, reflecting average financial strength.
EA Scores
- Altman Z-Score: 6.88, indicating very low bankruptcy risk.
- Piotroski Score: 7, reflecting strong financial strength.
Which company has the best scores?
EA has higher scores in both Altman Z-Score and Piotroski Score, suggesting stronger financial health and lower bankruptcy risk compared to TTWO, based on the provided data.
Grades Comparison
Here is a comparison of the latest grades assigned to Take-Two Interactive Software, Inc. and Electronic Arts Inc.:
Take-Two Interactive Software, Inc. Grades
The table below shows recent grades from reputable grading companies for Take-Two Interactive Software, Inc.:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| BMO Capital | Maintain | Outperform | 2025-11-07 |
| Wedbush | Maintain | Outperform | 2025-11-07 |
| UBS | Maintain | Buy | 2025-11-07 |
| Jefferies | Maintain | Buy | 2025-11-03 |
| Benchmark | Maintain | Buy | 2025-10-16 |
| DA Davidson | Maintain | Buy | 2025-10-09 |
| Wells Fargo | Maintain | Overweight | 2025-10-07 |
| B of A Securities | Maintain | Buy | 2025-08-08 |
| UBS | Maintain | Buy | 2025-08-08 |
| Benchmark | Maintain | Buy | 2025-08-08 |
Overall, Take-Two’s grades consistently indicate a strong buy or outperform stance with no recent downgrades.
Electronic Arts Inc. Grades
The table below summarizes recent grades from recognized grading firms for Electronic Arts Inc.:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Citigroup | Maintain | Neutral | 2025-10-30 |
| Morgan Stanley | Maintain | Equal Weight | 2025-10-20 |
| Roth Capital | Downgrade | Neutral | 2025-10-02 |
| BMO Capital | Maintain | Market Perform | 2025-09-30 |
| Argus Research | Maintain | Buy | 2025-09-30 |
| Wedbush | Maintain | Neutral | 2025-09-30 |
| Jefferies | Downgrade | Hold | 2025-09-30 |
| Baird | Downgrade | Neutral | 2025-09-29 |
| HSBC | Downgrade | Hold | 2025-09-29 |
| Freedom Capital Markets | Downgrade | Hold | 2025-09-29 |
Electronic Arts shows a mixed pattern with several downgrades and multiple ratings at neutral or hold levels recently.
Which company has the best grades?
Take-Two Interactive Software, Inc. has received consistently higher grades, predominantly “Buy” and “Outperform,” compared to Electronic Arts Inc., which has several downgrades and more cautious “Hold” or “Neutral” ratings. This disparity may influence investors by signaling stronger analyst confidence in Take-Two’s outlook relative to Electronic Arts.
Strengths and Weaknesses
Below is a comparison of key strengths and weaknesses for Take-Two Interactive Software, Inc. (TTWO) and Electronic Arts Inc. (EA) based on the most recent financial and strategic data.
| Criterion | Take-Two Interactive Software, Inc. (TTWO) | Electronic Arts Inc. (EA) |
|---|---|---|
| Diversification | Moderate: Revenue mainly from Console ($2.1B) and Mobile ($2.9B) segments, limited PC and other products ($593M) | Strong: Diverse revenue streams from Live Services ($5.5B), Full Game Downloads ($1.5B), and Packaged Goods ($524M) |
| Profitability | Weak: Negative net margin (-79.5%), negative ROE (-209.5%), declining ROIC (-64.98%) | Strong: Positive net margin (15%), ROE (17.55%), and ROIC (11.3%) with growing profitability |
| Innovation | Struggling: Declining ROIC trend and negative value creation signal | Robust: Growing ROIC trend indicates successful innovation and competitive advantage |
| Global presence | Solid console market presence but weaker mobile and PC expansion | Broad and global with strong presence in live services and multiple platforms |
| Market Share | Losing value with unfavorable financial ratios and high debt (D/E 1.92) | Maintaining value with favorable financial ratios and lower debt (D/E 0.35) |
Key takeaways: Electronic Arts demonstrates a durable competitive advantage with diversified revenue, consistent profitability, and efficient capital use. Take-Two struggles with profitability and value creation, signaling higher investment risk despite solid console revenues. Investors should weigh EA’s financial strength against TTWO’s current challenges.
Risk Analysis
Below is a comparative table outlining key risks for Take-Two Interactive Software, Inc. (TTWO) and Electronic Arts Inc. (EA) based on their latest 2025 financial and operational profiles:
| Metric | Take-Two Interactive (TTWO) | Electronic Arts (EA) |
|---|---|---|
| Market Risk | Beta 0.96 (moderate) | Beta 0.76 (lower) |
| Debt level | High D/E 1.92 (unfavorable) | Low D/E 0.35 (favorable) |
| Regulatory Risk | Moderate, US & global markets | Moderate, global exposure |
| Operational Risk | Negative margins, poor ROE | Positive margins, strong ROE |
| Environmental Risk | Moderate, tech sector focus | Moderate, tech sector focus |
| Geopolitical Risk | US-based, global sales | US-based, global sales |
The most pressing risks for Take-Two stem from its high leverage and poor profitability metrics, increasing financial vulnerability despite moderate market risk. Electronic Arts presents lower financial risk with stronger profitability and capital structure, but both face typical operational and regulatory risks inherent in global tech and gaming sectors. Caution is advised with Take-Two due to its financial distress signals in 2025.
Which Stock to Choose?
Take-Two Interactive Software, Inc. shows a mixed income evolution with a 5.31% revenue growth in 2025 but suffers from unfavorable profitability ratios, including a -79.5% net margin and negative returns on equity and assets. Its debt levels are high, and the overall financial ratios and rating are unfavorable, reflecting value destruction and declining profitability.
Electronic Arts Inc. reports a favorable income statement with a 15.02% net margin and positive growth in net income over the period. Its financial ratios are mostly favorable, including a solid return on equity of 17.55% and low debt levels. EA’s rating is very favorable, supported by a durable competitive advantage and stable profitability trends.
Investors focused on value creation and stable profitability may find Electronic Arts more favorable, given its strong financial ratios and growing competitive moat, while those with higher risk tolerance and interest in potential growth could interpret Take-Two’s evolving revenue as a point of interest despite its current challenges.
Disclaimer: Investment carries a risk of loss of initial capital. The past performance is not a reliable indicator of future results. Be sure to understand risks before making an investment decision.
Go Further
I encourage you to read the complete analyses of Take-Two Interactive Software, Inc. and Electronic Arts Inc. to enhance your investment decisions:
