Take-Two gets a lump of coal for holiday quarter
Publisher reports sinking sales and mounting losses, talks BioShock 2, big delays, PS3-360 differences, and DLC release windows for GTAIV; All-Pro Football benched.
The big news surrounding Take-Two Interactive these days has been Electronic Arts' publicly announced bid to acquire the company. Despite that, the company's latest financial results are giving gamers other tidbits to talk about, including confirmation that the newly established 2K Marin is working on BioShock 2, and that the company's upcoming Borderlands and Midnight Club: Los Angeles games have been delayed.
For the company's first fiscal quarter of 2008 (the three months ended January 31), Take-Two Interactive posted revenues down about 13 percent to $240.4 million from the same period the year before. The company also lost more money for the period, falling $38 million short of break-even instead of the prior year's first-quarter net loss of $21.5 million.
Take-Two explained the sales shortfall by saying the previous year's first quarter had more new games released in time for the holidays. Of this year's crop, the biggest sellers were BioShock, Carnival Games, NBA 2K8, and various Grand Theft Auto games (including the Japanese launch of Grand Theft Auto: Vice City Stories on the PlayStation Portable and PlayStation 2).
Despite the combination of slumping sales and worsening losses, Chairman Strauss Zelnick said in a statement that the company was "pleased with Take-Two's stronger than expected top and bottom line results." He attributed that to the company's "diverse range" of strong sellers like Carnival Games and BioShock, and emphasized that Take-Two is looking forward to Grand Theft Auto IV, which releases April 29. In a conference call with analysts, Take-Two CFO Lainie Goldstein said that Grand Theft Auto IV preorders and initial feedback on the game have also been better than expected.
Grand Theft Auto IV launches the day before Take-Two ends the current second fiscal quarter, and the publisher offered sales projections today that underscore the impact it is expected to have. Take-Two Interactive is expecting earnings per share of $1 to $1.10 off of second-quarter sales of $450 million to $500 million. For the full year, Take-Two is projecting sales of $1.25 billion to $1.4 billion, with earnings per share of $1.35 to $1.55. The company finished its last fiscal year with a total of $982 million in sales.
The release of Rockstar's open-world urban action game is being looked forward to by gamers and Take-Two shareholders alike, and there are some questions about the game that both groups share. In the conference call, one analyst asked about differences between how the Xbox 360 and PlayStation 3 versions will play. Zelnick responded that the two editions of Grand Theft Auto IV will be identical, except for a "slightly warmer color palette" on the PS3 edition and the exclusive downloadable content set for the Xbox 360 game. As for that downloadable content, executives said to expect the first episode in the fourth quarter of the current fiscal year (August-October 2008), with the second episode arriving by the end of October 2009.
As for other sequels from the studio, Take-Two revealed that it has sequels "to some of Rockstar's AAA titles" in the pipeline for the company's fiscal 2009, which runs from November 2008 through October 2009.
Zelnick was also asked about the decision to move BioShock 2 to the newly established 2K Marin from the original development studios of 2K Boston and 2K Australia, and whether or not the original game's creative director Ken Levine would be involved in the sequel. While the game will be made primarily by 2K Marin (which was established by a core of 2K Boston developers who worked on BioShock), Zelnick said that Levine and 2K Boston would be contributing to the title but would also be working on a new intellectual property. If those are the only projects Levine and co. are working on, that suggests earlier rumors about a 2K Boston-developed remake of X-Com were false.
Take-Two also had news for a few of its other franchises. After Carnival Games on the Wii proved a surprisingly strong seller last year, the publisher is extending the brand. By the end of October, Take-Two plans to ship a DS version of Carnival Games, as well as a Wii-exclusive spin-off, Carnival Games: Mini-Golf. As for last year's franchise debut of All-Pro Football, it apparently didn't make the cut. When asked about the absence of a football game on the company's release schedule, Take-Two execs said it had been taken off the slate, but they were continuing to weigh their options.