Take-Two takes financial hit, delays games
After a lackluster FY2005, the publisher lowers Q1 guidance on Top Spin 2 and College Hoops 2K6 postponements, predicts late PS3 start.
While most people's New Year's Eve hangovers have faded, it appears Take-Two Interactive's has just begun. Today, the company announced its preliminary earnings for the fiscal year and quarter ending October 31, 2005. For the year, the company saw $1.2 billion in net sales and net income per share of $0.53, barely above the previous year.
CFO Karl Winters told analysts in a post-earnings conference call that the biggest cause for the tepid earnings was "R&D expenses, which related to our development studio acquisitions and incentive compensation related to key products that were shipped this year." Presumably, that figure also covered the higher costs of development for next-generation consoles.
For its fourth fiscal quarter, Take-Two reaped $308 million in net sales and $0.27 in net income per share, far below the same period in 2004. "Revenue was down primarily due to the large comp we were up against from last year's Q4 release of Grand Theft Auto: San Andreas for PlayStation 2," said Winters. "$236 million, or about 54 percent of last year's fourth-quarter total sales, came from that single title."
Winters also laid out which titles drove revenue during the quarter. "Grand Theft Auto: San Andreas for PlayStation 2, Xbox, and PC was approximately seven percent of Q4 revenue, while Midnight Club 3: DUB Edition for the PS2, Xbox, and PSP was approximately four percent of total revenue." Winters said that Grand Theft Auto: Liberty City Stories (PSP) and The Warriors (PlayStation 2, Xbox) accounted for three percent of Q4 revenue apiece.
In a statement, the company blamed the slump on "lower sales volume of software titles and a decrease in average selling prices of interactive entertainment products as the industry transitions to next-generation platforms." Take-Two also emphasized the preliminary nature of the numbers, saying it would take "additional time to finalize the company's year-end results."
However, the pain didn't stop with last year. Take-Two also announced that it is lowering its guidance for the first quarter of its 2006 fiscal year, which ends on January 31, to $230-$250 million in net sales--and a net loss per share.
There were several reasons behind the shortfall. Though Take-Two had three Xbox 360 launch titles--Amped 3, NBA 2K6, and NHL 2K6--and a solid PC hit in the form of Civilization IV, the company admits it had a lackluster Christmas in 2005. "Clearly, the holiday season did not live up to anyone's expectations," said Paul Eibeler, Take-Two's president and CEO, in a statement.
Another reason Take-Two won't make its previous Q1 FY2006 guidance is today's revelation that two major 2K Sports titles, Top Spin 2 (Xbox 360, DS, and Game Boy Advance) and College Hoops 2K6 (Xbox 360, PlayStation 2), have been pushed back from their January 2006 release dates. The official reason given for the delays was to "provide additional development time."
However, the news was not all bad. Besides announcing that its popular PSP game Grand Theft Auto: Liberty City Stories is being ported to the PS2, the company divulged that it is working on an "all-new" GTA for the PSP. It also said it was readying another, unnamed PSP game, as well as "a title based on a new brand for the Xbox 360 and a sequel of a Rockstar brand." The company will also release Elder Scrolls IV: Oblivion, The Da Vinci Code, Prey, 24: The Game, NBA 2K7, and other 2K Sports titles before Halloween.
Speaking with analysts, Eibeler said that the road ahead for Take-Two is very much open. "Our results this year will be impacted by a variety of factors," he said, "including the launch of three major console platforms--the Xbox 360, which is just under way, the introduction of the PlayStation 3, which we believe will occur near the end of our fiscal year, and the Nintendo Revolution sometime during calendar 2006."
College Hoops 2K6 Quick Links
Summary | Reviews | News | Previews & Features | Images | Videos | Answers | Hints & Cheats | Forum | Check Prices
Games you may like…
-
College Hoops 2K7
(X360) -
NCAA March Madness 07
(X360) -
NCAA March Madness 08
(X360) -
NCAA March Madness 2002
(PS2) -
NBA 2K7
(X360)
Users who looked at content for this game also looked at these games.
See More Similar Games
31 Comments
Sign in / Sign up