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Analysts' double-take on Take-Two earnings

Industry watchers unveil expectations of BioShock sales, downloadable GTAIV content release date, and new installments of Max Payne and Red Dead Revolver.

Yesterday after the end of the trading day, Take-Two Interactive released its quarterly financial report. The publisher touted the success of BioShock, lessened losses compared to the prior year, and expectations of a bright future that included its 2K Sports label turning a profit for the first time next year.

Investors seemed to like what they were hearing, as today the stock has been trading up about 6 percent from yesterday's closing price of $15.75. However, a handful of analysts expressed reservations about the numbers. Wedbush Morgan Securities' Michael Pachter questioned why the company left its sales guidance unchanged despite the performance of BioShock, Manhunt 2's arrival on the last day of the company's fiscal year (October 31), and other good news from management regarding its sports label and profitable distribution subsidiary Jack of All Games.

"We are hard pressed to explain how the company will manage to generate an expected $112 million in pro forma operating losses during fiscal year 2007," Pachter told investors in a note today. "The implication is that the rest of Take-Two's business is a black hole, with losses of $112 million on approximately $400 million in other revenue."

Nollenberger Capital Markets analyst Todd Greenwald was similarly dubious of Take-Two's math, but his note to investors suggest a different reason for the flat earnings guidance. "Despite the addition of Manhunt 2 and the encouraging release of Bioshock in August, management did not raise guidance for the October quarter, leaving it at $275 to $300 million," Greenwald wrote. "We continue to believe that Bioshock's financial success will be somewhat limited by the hardcore scope of the game."

Pachter also noted that Take-Two has reclassified revenue related to the release of its Xbox 360 Grand Theft Auto IV episodic content as "long term," which he said implies a release sometime in the fourth quarter (August through October) of Take-Two's fiscal 2008. In his own note, Pacific Crest Securities' Evan Wilson wrote that he expected the Grand Theft Auto IV episodic content to arrive in the company's third quarter (May through July) of fiscal 2008.

Wilson also delved a little deeper into BioShock, following up on Take-Two's acknowledgement that the game has shipped 1.5 million copies already.

"We forecast 3 million units in Q4 and 4 million through the January quarter," Wilson wrote, adding, "Given BioShock's enormous initial success, Take-Two will clearly release it on other platforms and create sequels if the market makes sense and if quality would not be compromised. Regardless, we expect a sequel to be released toward the end of fiscal 2009 at the earliest."

Wilson, Pachter, and UBS Investment Research analyst Ben Schachter all had a couple other expectations for fiscal 2009, with each predicting Take-Two to release new installments of Red Dead Revolver and Max Payne during the time frame. While Take-Two didn't announce those games during its conference call yesterday, it has brought the two franchises up regularly as examples of its stable of owned intellectual properties, and CEO Ben Feder said they would return sooner or later.

"In addition to Grand Theft Auto, our roster of $1 million plus wholly-owned brands includes BioShock, Civilization, Midnight Club, Max Payne, Red Dead Revolver, Manhunt and Bully," Feder said. "We fully intend to leverage these products, which are on development cycles that should complement and counterbalance each other."

113 Comments

  • dara2000

    Posted Mar 11, 2011 1:28 am GMT

    GTA
    !!!!
    cheat

  • dara2000

    Posted Mar 11, 2011 1:28 am GMT

    hi

  • ishoturface

    Posted Jun 10, 2008 11:37 am GMT

    nw max payne and red dead revolver

  • jack_sparrow_28

    Posted Oct 6, 2007 6:18 am GMT

    After readreading this a few times, I'M LOVING IT! NEW MAX PAYNE! HELL YEAH!

  • Crew_SK

    Posted Oct 5, 2007 1:51 pm GMT

    I expected more info regarding the new Max Payne from this news

  • jimmarn

    Posted Oct 2, 2007 7:36 pm GMT

    i just hope the game will release early and not in march.. im so looking forward to this

  • shikovi4ik

    Posted Sep 22, 2007 2:58 am GMT

    I would like another max payne game

  • Sparky2002

    Posted Sep 17, 2007 3:21 pm GMT

    I think they mean the episodic content buddy
    to be release in the later half of 2008

    the game should be release in "Q1" end of December-07 - to - March - 08 sometime

  • Iceberg04blue

    Posted Sep 17, 2007 3:01 pm GMT

    Did anyone catch the part where GTA won't be coming out in March anymore?

  • Dvorack

    Posted Sep 17, 2007 12:33 pm GMT

    Another Max Payne game would be FANTASTIC.

  • iceblade911

    Posted Sep 17, 2007 4:32 am GMT

    they better make sure the sory from max payne 3 and everything else is good... it'd be too much of a pity for that franchise to fail to live up to it's already high standards...

  • playstation_wii

    Posted Sep 16, 2007 7:24 pm GMT

    I just want GTA IV

  • rosen22

    Posted Sep 16, 2007 4:09 pm GMT

    max payne 3 would rock

  • Galzakian

    Posted Sep 13, 2007 9:19 pm GMT

    Although it wasn't officially announced, good to hear that Max Payne 3 is going to be made

  • Poshkidney

    Posted Sep 12, 2007 11:50 pm GMT

    i want a 3rd max payne

  • zux2000

    Posted Sep 12, 2007 10:45 pm GMT

    R* RULEZ
    they forgot The amazing game: THE WARRIORS

  • taino1128

    Posted Sep 12, 2007 5:30 pm GMT

    glad R* is making sequels

  • SonOfSparda018

    Posted Sep 12, 2007 3:31 pm GMT

    Red Dead Revolver's awesome!

  • Jared_Vegeta

    Posted Sep 12, 2007 11:53 am GMT

    Woot for Red Dead Revolver and Max Payne sequels. Really, I don't care what the game got rated, western games are fun. Its such an untapped setting.

  • Hicks_1

    Posted Sep 12, 2007 10:57 am GMT

    Red Dead, Tons of potential there, Max Payne is over and done with

  • wargraymon

    Posted Sep 12, 2007 9:03 am GMT

    i thought max payne 2 was suppose to be the last....wish they had more norse referenced in that one, went off the track with the theme. hopefully if they do 3 it'll go back.

  • Azhar85

    Posted Sep 12, 2007 8:13 am GMT

    It's definitely Max Payne 3..i'll love it...

  • heroface

    Posted Sep 12, 2007 4:13 am GMT

    MAX PAYNE 3!!!!!!!!!!!! that's all I need to say about this article... and apparentyl all anyone else has to say too!!!

    Someone send a link to this page to everyone at rockstar and taketwo!!! so they can see what they've started and bring us what we've all wanted for SO long now... hands up if you play through the old ones occasionally just for satisfaction? anyone?... oh... everyone!!!

  • lightwarrior179

    Posted Sep 12, 2007 3:39 am GMT

    I would simply love to see the third Max Payne part getting released!

  • balnso

    Posted Sep 12, 2007 2:28 am GMT

    pleaseeeeeeee do not withdraw these words i read max payne3 was cancelled and i really got shock pleaseeeeeeeeeeee i just finished playing thw 2 parts for the 30 times

  • jansdman

    Posted Sep 12, 2007 1:56 am GMT

    Yes please bring us Max Payne !!!

  • generaltom

    Posted Sep 12, 2007 1:12 am GMT

    Max. Payne. 3. For. Next. Gen. Would. Be. Amazing. *cries*

  • kingman03

    Posted Sep 11, 2007 11:37 pm GMT

    MAX EFFING PAYNE 3 PLEASEEE!!!

  • StreetShine5

    Posted Sep 11, 2007 11:29 pm GMT

    OMG OMG OMG MAX PAYNE!!!!!!!!!!!!!!!!!

  • Glordit

    Posted Sep 11, 2007 10:26 pm GMT

    MAX PAYNE!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

  • MindlessTeef

    Posted Sep 11, 2007 10:20 pm GMT

    MAX PAYNE!!!!!! Did someone say MAX PAYNE!!!!! ?

  • rockstarrem

    Posted Sep 11, 2007 9:56 pm GMT

    MAX PAYNE 3!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

  • solidfisher101

    Posted Sep 11, 2007 9:29 pm GMT

    MAX PAYNE 3!!!!!!!!!!!!!!!!!

  • Katarn95

    Posted Sep 11, 2007 8:40 pm GMT

    MAX PAYNE 3!!!!

  • VengfulOne

    Posted Sep 11, 2007 8:27 pm GMT

    MAX PAYNE 3
    MAX PAYNE 3
    MAX PAYNE 3
    MAX PAYNE 3
    MAX PAYNE 3

  • ShinAkuma777

    Posted Sep 11, 2007 8:19 pm GMT

    so is it a new red dead revolver?? cuz that would be the s***

  • I_pWnzz_YoU

    Posted Sep 11, 2007 8:11 pm GMT

    so does anyone know when GTA IV is coming out approx.

  • retrofraction12

    Posted Sep 11, 2007 7:42 pm GMT

    this reminded me when i was waiting for star trek : the vulcan mith pc.
    and they canceled it. i was very sad. then I got into mw4 ( mech warrior 4) and was waiting for five to come out and then microsoft cancelled it for crimpson skys ( wich sucked

  • jacob-goodlich

    Posted Sep 11, 2007 7:37 pm GMT

    thats a great idea lamprey263 ,having jack thompson play a villian in one of the games lol.

  • DarkManiaN_1979

    Posted Sep 11, 2007 6:17 pm GMT

    The Gods heed your call Arab-man666.

  • Arab-man666

    Posted Sep 11, 2007 5:39 pm GMT

    Good god. I was just looking online, at Max payne 2, and wishing that a 3 would be made. I hope all else goes like this.

  • lamprey263

    Posted Sep 11, 2007 5:38 pm GMT

    I just hope they make Max Payne 3 or Red Dead Revolver 2 something that'll make Jack Thompson's head explode in anger. Maybe make a Jack Thompson villain in one of the games.

  • HellsingSoldier

    Posted Sep 11, 2007 5:32 pm GMT

    I remember hearing about a Red Dead Revolver sequel than got canned but hey, more power to them, I enjoyed the game and as for Max Payne, I just can't wait, just look at Stranglehold and know how great of a game Max Payne 3 can be.

  • John_Vampire

    Posted Sep 11, 2007 5:05 pm GMT

    Yay, a good Update that i can put in my Major Games Of All Time Union (MGOATunion)

  • Homerj

    Posted Sep 11, 2007 5:01 pm GMT

    @geebus
    From what I gather, the guys at Remedy should be just about to the point of polishing and QA on Alan Wake. Gotta keep those quality devs working.

  • Kazona

    Posted Sep 11, 2007 5:00 pm GMT

    Last time I checked, Max Payne 3 was listed as cancelled, which was incredibly dissapointing. I seriously hope it'll return because the first two games were two of the best games I've ever played.

  • Homerj

    Posted Sep 11, 2007 4:58 pm GMT

    Given how well the Max Payne mechanics turned out in Stranglehold, T2 cant afford not to bring a new Max Payne to next gen hardware. Max Payne 3 is just begging to get made for PC/360.

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