Take-Two revenues rebound

[UPDATE] Publisher finishes fiscal year 2007 with better-than-expected fourth-quarter revenues of $292.6 million, lower losses of $7.1 million.

Last week, Pacific Crest Securities analyst Evan Wilson upgraded Take-Two Interactive's stock performance from "Sector Perform" to "Outperform," indicating that the publisher was on course to outpace the gaming industry for the next 12 months. That guidance appears to have been prescient, given that Take-Two announced today that it exceeded expectations for its fourth fiscal quarter, which ended October 31, 2007.

For its final quarter of fiscal year 2007, Take-Two posted net revenue of $292.6 million, up from $266.6 million during the same period of time last year. In addition to better-than-expected sales, the publisher again trimmed net losses, which fell from $14 million ($0.20 per share) during its fourth quarter of fiscal year 2006 to $7.1 million ($0.10 per share). Take-Two's performance comes in light of the publisher's drastic revision of its fourth-quarter projection following the delay of Grand Theft Auto IV to its fiscal second quarter 2008.

The publisher attributed its success for the quarter to 2K Boston's award-winning shooter BioShock, as well as cross-platform basketball sim NBA 2K8 and minigame compilation Carnival Games. Take-Two claims it has shipped more than 2 million units of BioShock, whereas the poorly rated Carnival Games has mustered more than 500,000 units at retail. Take-Two also said that it continues to see strong returns from its Grand Theft Auto back catalog, and that high demand for Wii games and a year-over-year rise in distribution revenue had a positive impact on its bottom line for the quarter.

Although Take-Two's quarterly performance was better than expected, net revenues for fiscal year 2007 were down on the whole, year over year. Take-Two generated $981.8 million in net revenue for the year, down from $1.038 billion in fiscal 2006. On a positive note, the publisher suffered less losses for the year compared to 2006. For fiscal 2007, net losses stood at $138.4 million ($1.93 per share), down from $184.9 million ($2.60 per share) during the same period of time last year.

Commenting on Take-Two's performance, company chairman Strauss Zelnick said, "Fiscal 2007 was a year of progress for Take-Two, capped by better-than-expected bottom-line financial performance in the fourth quarter. The company has benefited from initiatives to streamline operations and improve our cost structure, while continuing to expand our portfolio of powerful video game franchises."

Reporting on its third-quarter financials in September, Take-Two gave a preliminary indication of its fiscal year 2008 performance. Reaffirming that projection, Take-Two anticipates revenues of $1.1 billion to $1.4 billion. The publisher also offered preliminary guidance on the first quarter of its fiscal year 2008, which ends January 31, stating that net revenues are expected to fall between $175 million and $225 million.

[UPDATE] In a post-earnings conference call, Take-Two further dissected its fourth quarter earnings and answered questions from a group of industry watchers. While the publisher reaffirmed that the Xbox 360 and PS3 versions of GTAIV will launch simultaneously between February and April, Take-Two did say that the Xbox 360 version of the game will receive downloadable content into its fiscal year 2009. When asked whether the game will see a Wii release, a Take-Two representative said, "I think there are other titles that are better suited to the Wii than Grand Theft Auto 4."

Despite a "very, very solid performance" by NBA 2K8, the publisher noted that its 2K Sports division did not turn a profit in 2007. Overall, sports titles accounted for 20 percent of the publisher's revenue for the quarter, according to Take-Two CFO Lainie Goldstein. Other sports titles released for the year included All-Pro Football 2K8, The BIGS, and Top Spin 2, among others.

Following the strong performance of Carnival Games on the Wii, the publisher also noted that it would be bringing Cat Daddy Game's minigame compilation to the Nintendo DS this summer.

29 Comments

  • Chief_Kuuni

    Posted Dec 21, 2007 2:55 am PT

    wii is here to stay

  • Homerj

    Posted Dec 20, 2007 9:48 am PT

    "sony fanor ms fanboys that dispite wiis strong success think its for kids"

    Dont lump 360 users into that category, its by no means an opionion shared by the majority. A large percentage of 360 owners view the Wii as almost a companion to the 360. I'm sure a poll of 360 owners would show close to 60% of them are also Wii owners. Its the Sony Fan Boys that spout all the hate for the Wii. The PS3 cant compete with their hardware or software, and in that comparison there is no doubt that the PS3 has more power (but yet they still fail against Nintendo, even in their "home turf" of Japan)

  • Homerj

    Posted Dec 20, 2007 9:41 am PT

    "Homerj, expect to see the reverse come 08, the 360 devs will struggle to get the 360 handle Devil May Cry 4 "acceptably" because it is built for the PS3, in fact it's already pretty much assured that the draw distance on the 360 will be poorer than on PS3."

    Riiight...just like Assassins Creed. Originally a PS3 exclusive...the dev publicly stated that they had switched to the 360 as the primary platform in the final year of development due to the memory limitations of the PS3. Despite some widespread denial, there is a consensus among actual users that the PS3 version of AC has poor contrast that ruins the appearance of the textures (this is a firmware issue that can actually be circumvented by adjustments to the contrast levels on the display), and a markedly reduced lighting complexity (to try and compensate for the hardware memory limitations). In the end, the game proved too much for the memory of the PS3, leading to framerate drops and periodic lockups (this is fully evidenced, by the way, by nearly 2000 posts from PS3 users on the official AC boards, as well as the review from IGN that rated the game far lower than any other legitimate review site for these very reasons). PS3 owners are still living in the false paradise built by Sony. You can live in denial and still believe the Sony PR line that the PS3 is far more powerful than any gaming platform built until the next PS releases, but the cold hard reality is that these are all false promises. Whatever advantages Sony touted about the cell processor have been rendered meaningless by a design with too little memory with poor allocation and too little gpu power. There has NEVER been a multiplat PS3 release that did more than EQUAL to the 360, and those have been very low resource requirement games like Oblivion or COD4 (if you dont believe these are low resource games, ask a PC gamer).

  • SoberWarock

    Posted Dec 20, 2007 1:00 am PT

    When is Counter-Strike Source 1.6 coming out?

  • mariokart64fan

    Posted Dec 19, 2007 9:05 pm PT

    um wii is not just for kids otherwise driver paralel lines which is gtas competitor is on the wii ,.,, i think they are right , though i got a ps3 and 360 for gta iv ,,, they said other games well maybe theyll release a whole new gta or somthing they released manhunt 2 just recently on the wii so using kiddies as an excuse redskinstu is just ober bs played out by you and a couple of sony fanor ms fanboys that dispite wiis strong success think its for kids ,,, more then half the games i have are fps on the wii or other form of violent game,,, even zelda fits in with this cateogory because its rated t anything rated t -m racing games aside ,,, is the landmark of violence or a hint of it ,,,, and i do enjoy racing games and those cant be called kiddy games if it were then gt or forza fits this just right and there are more racing games now adays then fps or other genres and heres my tip release every gta made thus far put it in a box set for the wii and if you can give us sas(san andreas stories) for 29,99 make sure this includes gta 1 gta 2 gta london gta 3 gta vc gta sa gta lcs and gta vcs

  • redskinStu

    Posted Dec 19, 2007 12:27 pm PT

    'Cause the Wii is for kiddies.

  • JayMezzy

    Posted Dec 19, 2007 10:23 am PT

    Well i wouldn't expect their Sports department to produce profit until they get the NFL license back, cuz NFL 2K5 is the isht!! Plus im sure they'll get some profit going when GTA IV releases. fa shooo

  • themc_7

    Posted Dec 19, 2007 10:21 am PT

    indeed

  • FraserAlexander

    Posted Dec 19, 2007 10:17 am PT

    nfl 2k9

  • thekodaman

    Posted Dec 19, 2007 10:16 am PT

    Homerj, expect to see the reverse come 08, the 360 devs will struggle to get the 360 handle Devil May Cry 4 "acceptably" because it is built for the PS3, in fact it's already pretty much assured that the draw distance on the 360 will be poorer than on PS3.

  • Homerj

    Posted Dec 19, 2007 9:40 am PT

    The AAA 360 title from 2K (Bioshock) comes to the rescue. Its ironic really. 2K has gone into massive debt and mortgaged the future of the company to pander to Sony and keep GTA4 from releasing until the devs can finally get it to run at least acceptably on the PS3, and what saves them? The 360. They screw 360 users for the benefit of Sony, and they balance the books on their backs. You couldnt invent irony like that.

  • ramanav

    Posted Dec 19, 2007 9:25 am PT

    Yes!! now hopefully GTA4 will meet all expectations

  • ashuncc2

    Posted Dec 19, 2007 8:25 am PT

    With games like BioShock and 2k sports, I am happy to see them doing well. It would be great if 2k could do a current NFL game again.

  • goobyman

    Posted Dec 19, 2007 7:07 am PT

    I want to continue to see download-able content for Bioshock.

  • matt_dangelo

    Posted Dec 19, 2007 6:40 am PT

    good job T2....now dont mess up gta 4 and ur stocks and profits will go up high!

  • MasterChief725

    Posted Dec 19, 2007 6:38 am PT

    its amazing that carnival games sold as well as it did, it recieved poor ratings, but I noticed that it was always one of the top selling wii games. I would rather have The Bigs, or MLB power pros, than carnival games though for the wii...still, nice job take-two. You were underated!

  • vampiredust99

    Posted Dec 19, 2007 6:10 am PT

    Here's a tip for Take-Two: Port GTA 3, Vice City and San Andreas to the Wii. It has enough power for them and releasing them at a budget price ($19.99) would ensure they sell by the bucketload.

  • killeryoda85

    Posted Dec 19, 2007 5:55 am PT

    Yawn....

  • vahid_xbox_360

    Posted Dec 19, 2007 5:17 am PT

    ooooh yeeeeh

  • Zoomer30

    Posted Dec 19, 2007 3:02 am PT

    Im not holding be breath. At this rate SPORE could be out before GTA IV. T2 is such a messed up company, I am just waiting for the government raid Lets just hope they sell the GTA franchise to another dev before they go under.

  • RaiKageRyu

    Posted Dec 18, 2007 7:33 pm PT

    Carnival games performance was strong? You've got be kidding me.

  • seanisgod

    Posted Dec 18, 2007 6:06 pm PT

    It's a shame that developers can get away with marketing mini game collections for the Wii. I had such high hopes for that console, and I think I'm a bit disappointed. The technology and hardware are great, but the library of even decent games is completely lacking, a real shame.

  • Sam-os_IMP

    Posted Dec 18, 2007 4:01 pm PT

    yay for them..

  • nappan

    Posted Dec 18, 2007 4:01 pm PT

    This is a good way to end their fiscal year, given that GTAIV will make their next one a sure thing... two in a row in this market is nothing to sneeze at.

  • mc2much

    Posted Dec 18, 2007 3:56 pm PT

    Good on them, fuel that money into all there other games and make awsome games =D

  • legendssunist

    Posted Dec 18, 2007 3:53 pm PT

    I would rather hear about GTAIV news :/

  • V-Nine

    Posted Dec 18, 2007 3:48 pm PT

    Yay?

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