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Take-Two has released its financial results for the second quarter, which show net losses deepening to $543.6 million.
For the three months ended September 30, 2023, the company saw a 111.5% difference between this loss and the $257 million loss recorded in the same quarter last year.
Net revenue and net bookings both saw a slight dip, but the publisher said both were in line with previous guidance. It reaffirmed its forecast of between $5.37 billion and $5.47 billion in full-year revenue, but now predicts a net loss of $910 billion to $957 billion for the fiscal year.
Here’s what you need to know:
The numbers
- Net revenue: $1.3 billion (down 7% year-on-year)
- Net loss: $543.6 million (111.5% change year-on-year)
- Total net bookings: $1.44 billion (down 4%)
The highlights
Total net revenues were down 7% year-on-year to $1.3 billion with a gross profit of $415.4 billion. However, operating expenses of $959.1 billion led to that net loss of $543.7 billion.
Net bookings fared better, down just 4% to $1.44 billion. Recurrent consumer spending bookings also decreased 7% – although Take-Two noted this in line with outlook – accounted for 78% of total net bookings.
The largest contributors to net bookings were NBA 2K24 and 2K23, GTA Online, GTA 5, Red Dead Redemption 2, Empires & Puzzles, Toon Blast, Words With Friends, Merge Dragons, Zynga Poker and Zynga’s hyper-casual mobile portfolio.
Take-Two reported that it saw better-than-expected results from GTA 5, GTA Online and Red Dead Redemption 2, the first two now being ten years old. GamesIndustry.biz spoke to CEO Strauss Zelnick ahead of the results, and asked whether these titles are expected to lose momentum any time soon.
“We’re always concerned,” he said. “We never take success for granted and all titles degrade at some point. There is a decay curve. But what Rockstar has done to fight that curve, and in fact to create ongoing growth, has been nothing short of extraordinary and I think it reflects the near perfection of these properties.”
Zelnick also talked up solid results from other titles such as NBA 2K, which sold over 4.5 million units and net bookings for this title are “expected to be up year-over-year, despite market challenges.”
He also cited good performances from catalogue titles across franchises such as Borderlands, BioShock, Civilization, as well as other live service games and the Zynga portfolio.
“There are numerous pockets of opportunity inside the company,” he told us. “Most recently at Zynga, we have three new titles that are looking very positive. It’s early days, so way too early to claim great success. But Power Slap, Top Troops and Match Factory are all very promising and Zynga ad bookings are up year over year.
“So, you know, we’re firing in all cylinders. We feel really good about how the company is doing.”
It’s been well over a year since Zynga was fully integrated into Take-Two. When asked how well the acquisition has played out for the publisher, Zelnick told us mobile now represents “very close to half” of total net bookings.
“That was the goal that we had,” he continued. “The deal has turned out to be accretive. The integration went extraordinarily well… And we’ve made progress in our profitability initiatives, including going direct to consumer for some portion of our business which gives us a real margin boost.”
Looking ahead, the company reiterated its forecast of net revenues ranging between $5.37 billion and $5.47 billion, as well as net bookings of $5.45 billion to $5.55 billion, for the current financial year ending March 31, 2023.
However, the forecast for net loss has changed from between $501 million and $545 million to $910 million and $957 million.
Nevertheless, the company remains “exceedingly optimistic” about Fiscal 2025 and beyond – not the least because the next Grand Theft Auto is on the way at some point.
We’ll have more from our interview with Strauss Zelnick tomorrow.
