Take-Two reports profit, reenlists GTA creators for new IP
Record $1.5 billion annual revenue yields $97 million in net income, but Q4 loss doubles; Rockstar cofounders Sam and Dan Houser staying put through 2012, working on mystery game--and new studio.
Seven and a half months after Grand Theft Auto IV began its record-breaking retail run, its publisher has reported its annual earnings. For the fiscal year ending October 31, Take-Two Interactive sales were a massive $1.538 billion, way up from the prior year's $981.8 million. Net income--aka profit--was $97 million, a large step above the $138.4 million net loss the New York-based publisher reported the year prior.
Despite the healthy annual finances, Take-Two's fiscal fourth-quarter revenues were anemic. Though there was a year-over-year jump in sales from $292.6 million to $323.4 million during the August-October period, the company's loss more than doubled to $15.0 million. In a statement, Take-Two blamed the larger-than-expected loss on $4.5 million in "business reorganization costs" and $1.5 million in "professional fees and expenses related to unusual legal matters." That last figure is almost certainly yet another bill for the defense mounted against Electronic Arts' attempt to acquire Take-Two, which fizzled out in September after seven months of extended deadlines.
The August-October quarter also saw Take-Two incur $4.8 million in "stock-based compensation expenses." This figure likely was related to the publisher's other major announcement of the day, a deal to keep key figures in the upper echelons of GTAIV developer Rockstar Games in place until January 31, 2012. The names included cofounder and executive producer Sam Houser, fellow cofounder and vice president of creative Dan Houser (Sam's brother), and GTAIV producer Leslie Benzies. Other, unnamed Rockstar personnel were also covered under the deal.
As part of the re-up agreement, Take-Two also "agreed to fund the future development of certain new intellectual property to be owned by a newly formed company controlled by key Rockstar Games team members." Given its role as financier, Take-Two will publish the unnamed game, which may or may not be the mystery PlayStation 3-exclusive project announced in July 2007.
Rockstar recently announced the February 17 release date for Grand Theft Auto IV: The Lost and Damned, the first of two episodes only available for download on the Xbox 360. The first GTA game for the DS, Grand Theft Auto: Chinatown Wars, ships on March 17--St. Patrick's Day--in North America.
While Take-Two's slate may pay off in the long term, in the short term shareholders are skeptical. The company's stock sank like a stone in after-hours trading and had fallen 18.39 percent to $9.85 as of press time. When EA made its initial $26-per-share offer in February, Take-Two's share price was just over $17.
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