8.5M GTA IVs rev Take-Two revs

[UPDATE] PS3, 360 crime-actioner help raise quarterly earnings 162 percent, returning publisher to profit; 11M units shipped worldwide, episodic content delayed to November-January quarter.

The second quarter of Take-Two Interactive's fiscal year ended on April 30, the day after Grand Theft Auto IV went on sale. However, the 48 hours following the countrywide midnight launch events for the game saw Algonquin Island-sized sales, according to an earnings report released today.

For three-month period, Take-Two revenues increased 162 percent year-over-year, from $205.4 million in 2007 to $539.8 million in 2008. Net income--aka profit--was $98.2 million ($1.29 per share), versus a net loss of $51.2 million or ($0.71 per share) the year prior. The figures were far above most analysts' expectations, with a survey of analysts by Reuters estimating revenues of just $322 million.

The profit also came in spite of a spate of major expenses for Take-Two. These included a $12.4 million for stock-based compensation and a whopping $3.8 million "professional fees and legal expenses, primarily related to Electronic Arts' unsolicited tender offer."

Initiated in February, EA's takeover bid was postponed for a third time yesterday. The rival publisher's offer of $25.74 per share is now well below Take-Two's share price, which was $27.65 at the end of trading today. The stock was down slightly in after-hours trading.

Speaking with analysts following the report's release, Take-Two chairman Strauss Zelnick reiterated his defiance. "At the time of EA's unsolicited tender offer, we emphasized the board's commitment to explore all strategic alternatives including remaining independent," he proclaimed. "We said we were willing to begin formal discussions with interested parties on April 30 following the launch of Grand Theft Auto IV, and we're actively engaged in that process now. In fact, we have had and continue to have formal discussions with a number of interested parties."

EA's offer is bound to look even less attractive by the time of Take-Two's next earnings report, thanks to sales that GTAIV's Brucie could only describe as "Alpha." As of May 31, a staggering 8.5 million copies of the game were sold worldwide, and a total of 11 million units have been shipped to stores. Last month, Take-Two reported GTAIV had sold over 6 million copies during its first week on the market, generating over $500 million.

Besides retail software sales, GTAIV will also generate a second wave of revenue when downloadable episodic content is released for the Xbox 360 version of the game. Speaking with analysts, CFO Ben Feder announced the DLC--which is being touted as the first of several robust updates--will be released during the first quarter of Take-Two's 2009 fiscal year, which runs from November to January. It had been expected in October, when GTA rival Saints Row 2 will now hit the market.

[UPDATE] But while GTAIV is proving a veritable money-minting machine, other Take-Two franchises are not faring as well. Feder said flat out that "we no longer anticipate reaching profitability in our 2K Sports business in fiscal 2008." On the division's roster this year are such titles as NBA 2K9 and NHL 2K9, with College Hoops 2K9 recently canceled and the All-Pro Football franchise skipping this year--if it returns at all.

Looking ahead, Take-Two executives said that the publisher currently has some 33 titles in various stages of development, including BioShock 2. When asked about the upcoming BioShock film--which has "no risk" and an "economic upside" for the publisher--Zelnick warned that the project wouldn't arrive alongside the sequel, due in fall 2009. "It would be more likely that it would be released coincidentally with BioShock 3," he said, revealing Take-Two's intention to make a trilogy out of the award-winning PC, Xbox 360, and soon PlayStation 3 title.

Guidance-wise, Take-Two raised its estimates to $325 to $375 million for the current May-July quarter. It expects to take in $300 to $350 million during the following three months, bringing its full-year revenue to $1.4 billion to $1.5 billion.

169 Comments

  • HalfBak3dM0nkey

    Posted Jun 12, 2008 7:33 pm PT

    With a single game to bring Take2 from debt to profit, you know that's exactly what they need to emphasize in a game series from now on. The fans want GTA over poor, shoveled out games that EA brings. The sales are reflective of exactly the demand of that type of game.

  • ObiKKa

    Posted Jun 12, 2008 2:07 pm PT

    Take-Two chairman Strauss Zelnick reiterated his defiance. "At the time of EA's unsolicited tender offer, we emphasized the board's commitment to explore all strategic alternatives including remaining independent," he proclaimed. "We said we were willing to begin formal discussions with interested parties on April 30 following the launch of Grand Theft Auto IV, and we're actively engaged in that process now. In fact, we have had and continue to have formal discussions with a number of interested parties."

    Well..., that does give me a bit of hope. I really thought that they were going to want to sell out to EA! Someone's said that T2 would be a good partner with Ubisoft. Well, I agree with that, as Ubisoft hasn't had much to do with the sports genre, bar their upcoming Assassin's Creed-powered snowboarding game. But Ubisoft is probably going to be nervous about merging with T2 as they'd probably have to 'babysit' T2's financial & game development managements. Now T2's revealed that their sports titles aren't doing so well, and the reason for this is obvious. It's the glitches in ALL of the current-generation sports instalments that is really hurting their appeal to the gamers. Many of us would really, really like to buy their sports games, but with these glitches, they're a HUGE turn-off to us! Don't they get that part!? This is just so frustrating. Oh, *sighs*. When will they stock up on their QA resources and finally fix these f%cking, so sad bugs once & for all!? Lol, hehe.

  • damariofan

    Posted Jun 12, 2008 1:12 pm PT

    snake3rules:

    While we would ALL love a new t2 game, T2 is probably going to try milking GTAIV's profitability for a VERY long time, so don't expect any new console GTA's this year.

  • Rikstah

    Posted Jun 11, 2008 9:48 pm PT

    im with combatsoldier we all knew GTA 4 was gonna be a stunner, however i didn't think it was gonna be unanimously given 10 out of 10 by every critic out there. Good job Take-two! That profit is well deserved ^_^

  • snake3rules

    Posted Jun 11, 2008 2:23 pm PT

    wow-- january for DLC -- what a joke -- Why even bother releasing it at all, 8 months after the games released?!?! Just put that energy toward working on the new game already.

  • ColonelGuile

    Posted Jun 11, 2008 11:25 am PT

    Oh please, Saint's Row...

    Spare me the horror of ever playing that useless game. It will never come close to GTA or any SNES game that ever came out IMO

  • semplew

    Posted Jun 11, 2008 1:53 am PT

    The reason the episodic content is not going to be released on PS3 is, Microsoft bought the rights to it before Sony had a chance too.

  • combatsoldier

    Posted Jun 8, 2008 11:10 am PT

    im not really that surprised we all knew this was going to happen.

  • coold_steam

    Posted Jun 8, 2008 6:11 am PT

    wow thats alot of many gaming industries r rising higher but still we dont have that much of good games compares to that amount of money these ppl r making

  • chickenfeed9

    Posted Jun 8, 2008 3:40 am PT

    Why is the episodic content not being released on the ps3?

  • AussieReviewer

    Posted Jun 7, 2008 11:39 pm PT

    That's alot of money

    question is..

    will the game still be appealing after more than two months?

    my answer - no

    i beat GTA4, it left me thinking.... now what?
    multiplayer can only keep you entertained for so many minutes

  • gbrading Site moderator

    Posted Jun 7, 2008 7:17 pm PT

    I'm thinking the only reason they are delaying the DLC is because at the moment, they are making so much money there is no reason to release anything new anytime soon. Still, this just goes to show how much money a company can make when they get a successful franchise.

  • PixyMisao

    Posted Jun 7, 2008 2:25 pm PT

    This is proof however that they didn't and don't need EA, I hope they find the right buyer now that they'll be looked at as a hot commodity. Don't sell out to EA boys, it will be the beginning of the end for gaming if you do.

  • Dan2002sk8er

    Posted Jun 7, 2008 1:43 pm PT

    if ea wants take two badly enough they will get it they want to be the only one making sports games.

  • el_hermoso

    Posted Jun 7, 2008 12:47 pm PT

    I also notice little difference between each consecutive 2k game. Once it got to 2003 i didn't buy another one of them. The only thing i find different about them is the few changes to the roster, and i've found i can do that myself on the previous games rather than buying a new one!

    I think i'll invest big in take two when the next gta comes out

  • currere

    Posted Jun 7, 2008 8:07 am PT

    In your face EA!

  • DarkElf2112

    Posted Jun 7, 2008 6:26 am PT

    At this rate EA better worry about Take-Two buying them! The value of the stock doesn't look like it's gonna plateau anytime soon.

  • drangel_jam

    Posted Jun 7, 2008 12:16 am PT

    I hope they don't disassemble 2k. The publishers really need to start investing more in the sports division, and pressure studios to stop updating their games every year by a factor of 1.5.

    Sports games have always been about building an engine that lasts 4 years, and tweaking the gameplay just a little with enough niche, so it can seam new.
    Guess what? It's firing back, more and more people are giving up on sports games because, like me, they prefer spend their $60 on a new game that has better production values, and that actually feels new.

    I wouldn't mind if they took a 2-yr-period to develop a really engrossing NBA game, and start making their cheap updates cheaper like $30 or 40 bucks, and it may just make more people buy them.

    Top Spin 3 looks like it will kick major ass, because it truly feels like a new-gen sequel.

  • brain20035

    Posted Jun 6, 2008 11:43 pm PT

    they deserve the credit really. next year they can still earn more money by publishing the game on the PC.

  • eminem_glen

    Posted Jun 6, 2008 10:37 pm PT

    lol mrklorox, your mario looks like he has a disease of the groin

  • mrklorox

    Posted Jun 6, 2008 7:21 pm PT

    crimped, you're more likely to get some yet to be announced exclusive content for the PS3 edition than to get the announced DLC for which MS payed. There's also the chance of unannounced free multiplatform DLC in the works.

  • crimped

    Posted Jun 6, 2008 4:57 pm PT

    I hope that after the contract with 360 runs out that the DLC for GTA4 fro PS3 will be cheaper or better yet, free

  • ShadowOfKratos

    Posted Jun 6, 2008 2:13 pm PT

    ...thanks to sales that GTAIV's Brucie could only describe as "Alpha."

    HA! LOL!!!

    R* is genetically different baby! LOL

    And EA is...
    ...
    ..Desperate...

  • cooldude03

    Posted Jun 6, 2008 2:05 pm PT

    By the time downloadable content comes out for GTA IV, I will have moved on to bigger and better things. I've played GTA4 into the ground, does Take-Two really think we'll still be interested in DLC in 6 monthes. It's going to have to be pretty impressive, oh yeah and include achievements in order to get my attention.

  • cooldude03

    Posted Jun 6, 2008 2:01 pm PT

    Sounds like one of the most successful gaming companies out there. EA better raise their bid if they want to buy Take-two.

  • morechebba

    Posted Jun 6, 2008 1:27 pm PT

    bioshock is top draw .a stuuning work of art

  • Darkblyth

    Posted Jun 6, 2008 1:21 pm PT

    Delayed agen why when its with ps3 its delayed or maybe there be dlc for ps3

  • LindBergh2007

    Posted Jun 6, 2008 12:54 pm PT

    My advice to Take 2: Give the 2K sports franchise back to SEGA. They need it more then Take 2.

  • zhuge_liang_

    Posted Jun 6, 2008 11:10 am PT

    No 2K Sports??? They're much cooler than EA's Live series...

  • BrolyGuy

    Posted Jun 6, 2008 11:09 am PT

    Lemme tell you how big this is. COD4 just got 10 million after being released for months. GTA IV is a fairly new release and it already has 8.5 million. Ponder that

  • football_legend

    Posted Jun 6, 2008 10:44 am PT

    This is my favorite game of all time (lets c if MGS 4 can top it).

  • Egyptman786

    Posted Jun 6, 2008 10:26 am PT

    damn, thats a lot

  • loggerz

    Posted Jun 6, 2008 10:18 am PT

    :
    Maybe this time take two offer to buy ea

    You know that just might happen lols :p

  • BooBakerBrown

    Posted Jun 6, 2008 10:02 am PT

    Take-Two actually has more titles than 2K Sports & GTA series. They also have Manhunt, Bully, Bio-Shock, The Darkness, The new Don King Prize Fighter, Top Spin (both part of 2K sports but not the usual B-Ball & baseball games), The Elder Scrolls IV (Shivering Isle), Dungeon Siege... amongst others that fall under the umbrella of Take-Two Interactive... well, their @least 2K games in which Take-Two is their parent company. But, if Microsoft would entertain the thought of purchasing Take-Two... does that make them as bad as EA? EA is like the New England Patriots... everyone wants to see them lose because they've won so much within the past. Now, I wanna see EA tak eone to the Cahones! Viva La Take-Two hombre!

  • Chefjase

    Posted Jun 6, 2008 10:01 am PT

    Good for them, I guess they have enough to plan for the the next GTA, and Bully 2: The Graduation Massacre Chronicles!!

  • jmanders2002

    Posted Jun 6, 2008 10:01 am PT

    That's what I'm talking about!!

  • akiwak

    Posted Jun 6, 2008 9:52 am PT

    In your face EA!!!!!

  • jknight5422

    Posted Jun 6, 2008 9:46 am PT

    Man, it almost makes you wish Take-2/Rockstar(?) had remained a privately-owned company.

  • Hvac0120

    Posted Jun 6, 2008 9:24 am PT

    EA wouldn't be making a mistake by purchasing T2. EA doesn't want all of the developers and properties. They just want the big ones. Namely GTA and BioShock. Take-Two continues to tell us that they are in talks with other interested parties, but nobody knows who these parties are. Maybe their strategy is to keep that quiet so that EA doesn't go to the other parties and make offers to stay away? Maybe they really don't have any other interested parties? If that were true, then why turn down EA?

    There is a big secret being kept at T2 and they are keeping it well. It must be one of those "If I told you, I would have to kill you" kinds of secrets. I wonder how long this will go on. Will T2 be able to hold off page June 16? Will EA continue to extend it's offer?

    Too many mysteries!

  • Pedro7_2000

    Posted Jun 6, 2008 9:21 am PT

    Knowing the board paid themselves part of this $3.8 million...$3.8 million "professional fees and legal expenses, primarily related to Electronic Arts' unsolicited tender offer."

  • mrjasler

    Posted Jun 6, 2008 9:07 am PT

    OK now what for Taketwo? wait another 3 years until the next GTA for the same profit.. the next 3 years of Bioshock and rehashed 2kSports titles? this company is not as great as some of you make it out to be. The will get some sales of GTA til the end of the year but nothing, nothing even close to the last month or so. From a business perspective i think EA might be making a mistake getting taketwo.

  • turnerdoc posted Jun 6, 2008 8:29 am PT (does not meet display criteria. sign in to show)

    turnerdoc

    Posted Jun 6, 2008 8:29 am PT (hide)

    THIS GAME SUCKED ALREADY TRADED NEVER EVEN PASSED IT SUCKED SAINTS ROW 2 THATS MY NEW GTA

  • mehmetbalibasa

    Posted Jun 6, 2008 7:42 am PT

    Maybe this time take two offer to buy ea

  • gamefreakwill

    Posted Jun 6, 2008 7:26 am PT

    Cheers to Take Two!!!!! Hopefully these amazing sales and profits will help Take Two drive EA from their shareholders. EA sucks and has been pasting their name on too many awsome game franchises like Mass Effect. Keep it up Take Two, you'll be ok. As for you EA, start something awsome and spend you 2 billion on that, and maybe I'll buy it.

  • solidusdeus1

    Posted Jun 6, 2008 6:50 am PT

    How can you make a sports franchise generate money? Do away with exclusive deals (NFL, MLB) We need competition (like in sports)

  • Autolycus

    Posted Jun 6, 2008 6:41 am PT

    you peeps dont get it. If you to see 2k SPORTS survive, YOU HAVE TO PURCHASE THEIR GAMES AND NEW. used games (Aka gamestop) dont generate ANY PROFIT WHAT SO EVER for the publishers.

    You can cry until the cows come how but you simply arent buying their new games, which is why they arent making profit.

  • dragonsama

    Posted Jun 6, 2008 6:39 am PT

    Thats pretty sad about 2K sports. they games have been way better than anything EA has ever put out.

  • BooBakerBrown

    Posted Jun 6, 2008 6:31 am PT

    HOORAY Take-Two!!!! HOORAY GTAIV!!!!.... HOORAY BEEEER!!!!

    No really, They should keep the 2K sports titles because production cost should be relatively low. I prefer NBA 2k games better than the Live series of games. Live hasn't been any good for a decade... those games are garrr-bawj. Besides that, I can actually buy those 2K games for my kids to play on the PS2 & utilize the PS2 HDD (darn you Sony... gotta get some use out of that thing besides starting another subscription to FFXI). Well, hopefully someone else will buy Take-Two so that EA can't... until EA entually buys the company that buys Take-Two.

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