Take-Two issues revenue warning, gets subpoenas

Troubled publisher says analysts' estimates are overly optimistic, announces grand-jury investigation holding back quarterly report; "premier" Rockstar PSP title delayed.


Take-Two Interactive, parent company of Grand Theft Auto publisher Rockstar Games and Civilization publisher 2K Games, today announced its preliminary earnings for the third quarter of its fiscal year, which ended July 31. Net revenues for the quarter totaled $240 million, up from $169.9 million for the third quarter of the company's 2005 fiscal year. That three-month period saw the company's earnings hobbled by the recall of Grand Theft Auto: San Andreas in the wake of the "Hot Coffee" scandal.

While the net earnings number would normally be cause for celebration, stockholders' cheers were quickly silenced by a double shot of bad news from Take-Two. First up was the company's announcement that it was delaying its final earnings report due to an ongoing internal investigation into its granting of stock options. Take-Two also revealed it has "received additional grand jury subpoenas issued by the District Attorney of the County of New York requesting documents...regarding stock options and other equity-based compensation."

Were that not grim enough, Take-Two also flatly announced that current estimates by Wall Street analysts about its fortunes were overly optimistic. "Take-Two commented that, independent of any potential financial impact that may result from the company's internal investigation of option grants, the current analyst consensus EPS estimates for its third quarter, and revenue and EPS [earnings per share] estimates for its fourth quarter are too high," it said in a statement. Take-Two blamed regulatory fees, income taxes, and its relocation of its overseas publishing headquarters to Geneva for the shortfall.

That said, the company also gave another reason for its revision--one that will have a much greater immediate impact on gamers. "The company's fourth-quarter results will also be impacted by these factors, as well as the movement of a Rockstar PSP title based on a premier brand out of the fourth quarter," read the report.

Currently, Take-Two's main PlayStation Portable release for its fourth financial quarter, which runs from August to October, is Grand Theft Auto: Vice City Stories. However, the next paragraph touts VCS and Bully for the PlayStation 2 as Take-Two's two top releases for its fourth quarter. Attempts to contact Take-Two regarding the unnamed PSP title's delay had been unsuccessful as of press time.

Needless to say, the markets were none too pleased with the news. Take-Two's share took a Bully-worthy beating in after-hours trading, sliding $1 to $11.20 as of press time.

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Avatar image for blancobo

hot coffe, hot coffe, dont know what is the big deal! i was never able to unlock it, i did see it in the internet... whats the big deal in a game you can kill people just for the sake of seeing them flying. such a big deal over some nice hot cup of capuccino

Avatar image for DiscGuru101

GTA 4 just in time... ?

Avatar image for blackIceJoe

I was looking around and found out there was a Red Dead Revolver game planned for the PSP maybe that is the game that got delayed.

Avatar image for lime05

The whole of GTA is a offence. Personally i could'nt care less about this company and it's member's. From Lemmings to GTA ? , sicko's.

Avatar image for princeofgames90

Whats the problem with you and Take-Two they are cool and GTA is the most best thing i ever played if you tired well theare alot the are not and waiting for another title besides if you want some thing else bye Civilization ok And as for ho said "THIS IS NOT LIKE A GANGSTER" well how do you thing about "THE BOYS IN THE HOOD"

Avatar image for VegetaMaelstrom

Some of you people need to re-read the article. No where does it mention any Democrats or politicians going after Take-Two. The District Attorney of New York is requesting documents to look into allegations of illegally back issued stock options for executives. If this is the case, don't blame lawyers, politicians or Jack Thompson, blame the scumbags who run Take-Two. And pray for hard jail time with a scary, horny cellmate named Bubba for the guilty. "Take-Two blamed regulatory fees, income taxes, and its relocation of its overseas publishing headquarters to Geneva for the shortfall. " These bozos are saying that because they have to pay taxes like every other citizen and company that that is the reason estimates will be down. Amazing. Apparently Take-Two doesn't pay taxes to the government unless it is already under investigation and wants to avoid additional scrutiny.

Avatar image for HXCDEW

WWW.GTAPSP.COM sheds some light onto this rumour of GTA being "delayed". It seems GTA VCS will release as planned after all, the delayed title however could be Bully for PS2.

Avatar image for crills

thats good for them there games are wack any way im tired of gta come on and make a new game all ready and not one were you just drive around and shoot people and go to little dots on your radar and do little missions one more thing cj and his freinds were not ganstar i live in the hood and thats not how things go down around here thats the most thing that gets me mad about san andres is how they glorrify the hood like its a good thing and then you got all these kids playing these games thinking thats how it is thats nothing like the hood so please next time you make a game in the hood make sure you repersent it rite and we dont need no sex seens we see that alot on tv all ready

Avatar image for Yceman757

Well bigelf72, your right. Im not going to argue Im a noob... I must be a noob because clearly I havent played, and have no interest in trying to play a bit of code that includes animated sex. I do not consider it to be a mod because of the fact that it was included in the original code of the game and not something that was user created. Counter-Strike is a mod, the Hot Coffee mini game is simply a bit of code that is part of the original game that was covered up and wasnt supposed to be found, and people needed to decompile code, or create means to access it. Ive seen censored video of it on G4 TV and honestly I dont see the point of playing it because it is absolutely fruitless, and its like doing a bunch of work to get nothing. Plus, it is laziness on the part the coders to leave it in the game covered up, instead of taking it out like they should have in the beginning costing Rockstar millions by having to recall the game, edit it, and re-release it. But whatever, I hope you got the "full desired effect" from Hot Coffee bigelf72, because you calling me a noob gets you nowhere...

Avatar image for rgsniper1

Bigelf72 So you're saying the ability to access hot coffee with only an action replay is bogus? I'de say that even if the action replay put the girl in a pink thong and tiny shirt while she performed sexual acts that still hot coffee. Again read the link to the GS article I posted and argue that's not enough to get them into trouble.

Avatar image for bigelf72

Yceman757 you noob, don't argue with s151990 who clearly knows more than you. It was a mod I've installed and played it. It requires two seperate files for the "full desired effect". Here's the story: The data was disassembled within the game files from Rockstar games who initially put it in...then decided to take it out without screwing up the games code by simply scrambling the data leaving it within the games files. This saved time and money initially because when you delete something that is coded into something else, it could potentially create issues. Which obviously when you set a release date, you don't want to have issues that would delay the games release. Then the inventor (coder) of the mod FOUND THE UNUSED CODE and then reverse engineered the code to get it to work properly then he made the mod that put the code back where it should have been. Then he had to play the game to find out what the effect was. Then after finding out the codes effect he posted it on the internet for everyone to experience. But if rockstar games did at one point in time had "nude" models they weren't in the game and so the sex scenes showed two characters that were fully clothed instead. Then a texture artist made a seperate mod that made the females nude. Then People complained that 1 of the 2 files where hard to find so then the second guy (texture artist/programmer) made a mod that contained both the files in one easy to use install. Thats the story. kk thnx bye.

Avatar image for mat2g

Jeez, does it ever stop for these guys. I could care less about Bully and VCS, as long as GTAIV comes out on time next year, and that it will be awesome. It better not have a female as the main character either, bring back Tony V.

Avatar image for supercoolguy

I really feel sorry for Take-Two, I'm a computer programmer and personally I understand, because in the past I've almost accidentally submitted code with swears as variables, etc. Things I was doing during testing and almost forgot to take out. I also understand how hard it is to remove pieces of code from a project of that size. You never know what removing a piece of code could do, it could cause a crash, but worst of all a bug that is hard to find that will cause problems down the road, and by that point the programmers won't know what caused it. It's just bad luck, I hope people keep suportting them, because it would be a shame to lose a company like that. Finally lets cross our fingers and hope EA makes a mistake like this to take the heat off this stupid Hot Coffee thing already

Avatar image for Yceman757

"s151990" "How many people here are seriously retarded? Does anyone actually know the truth of HOT COFFEE? It's a freakin user-created mod, that some one made for download. On xbox you have to actually have a modded xbox to use it! Seriously, do your research before you mindlessly post next time, you all look like total idiots right now." You should do your research and you would realize that Hot Coffee wasnt a mod, it was in the coding my friend... Which is why they recalled it to take it out... But it sounds like Rockstar may end up in a bit of trouble if they keep getting negative press, (most of which is unfair might I add.) and, if their stocks keep droping.

Avatar image for rgsniper1

"s151990" "How many people here are seriously retarded? Does anyone actually know the truth of HOT COFFEE? It's a freakin user-created mod, that some one made for download. On xbox you have to actually have a modded xbox to use it! Seriously, do your research before you mindlessly post next time, you all look like total idiots right now." ------------- Where are you getting that from? I can go out to google right now and find the codes that unlock it on the PS2 or xbox version, all you need is a pro action replay. It started out that people thought it was a mod and later proven that all the content is indeed already on the disk and just needs to be unlocked. If you have proof otherwise please supply it. Copy and paste this in google if you want to do further reading: hot coffee action replay codes - (This is for research only, not promoting someone actually try to get the codes). Also if that's not enough for you here's the gamespot article where they accessed it without any mods right off the game disk itself. << LINK REMOVED >> I think the question to ask here is who's the one that is retarded on this subject?

Avatar image for SergeStorms

Hot Coffee has to be the most amazing mistep by a game company I have personally seen. Despite making a game with incredible, earth shattering popularity and sales, they manage to mess it up and hurt their sales and earnings. Amazing.

Avatar image for L1qu1dSword

I think the hot coffee thing was stupid because it was not available in the regular game. Who cares if it was embedded in the code. You still need a special patch or modded xbox to do it

Avatar image for etramleinad12

The game as far as I know doesn't mention a release date and Gamespot made an estimate, from other sources the game isn't being delayed a year. Go to www.gtavicecitystories.com. P.S. The Hot Coffe mod wasn't user created it was uncovered in San Andreas's coding.

Avatar image for s151990

How many people here are seriously retarded? Does anyone actually know the truth of HOT COFFEE? It's a freakin user-created mod, that some one made for download. On xbox you have to actually have a modded xbox to use it! Seriously, do your research before you mindlessly post next time, you all look like total idiots right now.

Avatar image for TheBigSeven

This game has been delayed by one year.

Avatar image for coderedfilm

man, gamespot need to get theyre story straight. first they are saying in the article, that some secret psp game had been delayed, and bully & GTA: LCS is theyre Q4 games, then on the GTA:lcs page, they put the relese date back to Q4 2007???? what the hell is going on here? what is delayed and what isnt?

Avatar image for EBWCLIF

Get ready to invest in take two now. The stock is gonna drop but next October when GTA 4 comes out it's gonna shoot through the roof. Guaranteed easy money.

Avatar image for Demonbob

Well, that's life. I am saddened for what's happening to Take-Two, but i'm hoping that Bully will help them out of their GTA hole.

Avatar image for Dolacide

The problems never seem to end for Take2

Avatar image for sugreev2001

Take Two is responsible for the kind of freedom we have in games and have raised video games profile from Child's play to serious business.They influence everyone in the vg industry...if something happens to this company then we might lose the most original game developer in the United States.Hillary Clinton and Jeff thompson should goto Hell,the $%^#^&^@ !

Avatar image for Riverwolf007

well this isint really about hot coffee its about insider trading. You guys do read these before you post right?

Avatar image for BraindeadRacr

They get "Bullied" by the media, this fellow Jack Thompson and the politicians. Say hello to trouble "Bully"! Hot Coffee was a big mistake... This could have been Take-Two and R*'s last mistake tough.. If i understand it well... GTA:VCS and Bully are delayed because of these politicians? Goddamn, what's next? "Jelly-Beans are a source of teeth infections, ban them now!"?

Avatar image for lgoldberg

Take-Two really made a mistake with the hot coffee thing.

Avatar image for metdevthegamer

Poor Take-Two, always getting picked on.

Avatar image for Gigantorz

Good lord. All this because they didn't show the ESRB content that'd knock the rating from 17 and up to 18 and up? Is there something wrong here? Both sides should go sit in the corner and rethink their lives...

Avatar image for soul_motor

As much as I hate GTA, I don't like seeing a gaming company being bullied by politicians. Granted they could have been more honest in the Hot Coffee scandal, but they should have the freedom to publish most anything they want, it is still a "free-market" economy.

Avatar image for Thorpe89

Oh no - I can't wait any longer. No delays, please!

Avatar image for MSE369

god damn it i jst wanna play the new GTA and Bully!!!!!!!!!!!!!!!! :(

Avatar image for Pastehunter

I ask the same as games_pot1 .

Avatar image for d-suhiti

If T2 is in trouble, I dont really mind them selling R* Games to Microsoft. GTA exclusivness for the 360 FTW.

Avatar image for Fallout_red

I just want to get my hands on Bully. DAMN THEM.

Avatar image for GFofgaming

Damn, how tihs GTA: LVS releases this year.

Avatar image for ajy2

If EA buys out Rockstar, well I dunno what to say to that. At least they don't have Blizzard...

Avatar image for soniqstylz

And for a second comment... I wouldn't be suprised of the mystery game was either a port of the table tennis (or a version of it) or maybe midnight club? Odd that the twoR* games are Take Two's top releases for the fourth quarter... no 2KSports games? (NHL, College Basketball)?

Avatar image for soniqstylz

Wow... these comments seriously make me *eye roll*

Avatar image for mithund

bah ! if Take Two goes under, Rockstar has nothing to worry about. There will many other publishers who'll fight tooth & nail to get hold of the GTA franchise. I don't mind seeing GTA IV on the 360, PS3 & PC.

Avatar image for SirSalami

GTA fans, fear not. Rockstar and thier franchises aren't going to crumble simply because thier publisher is facing some issues. Any publisher would would sell what little of thier soul is left to get thier mits on GTA. But that's beside the point. Really, i think this all started way back, when EA decided to corner the pro sports game market. The 2k sports games used to sell like hot-cakes. Now, it's just madden and the like, sponging up all the cash with little / no competition. Sucks for game fans and 2K (take2),... smooth move for EA. It would seem that between EA's sports game take-over, Take2's own CFO, and Rockstar's arrogance, news of this calibur will continue for this usually respectable publisher.

Avatar image for mendakfizz

Big deal...

Avatar image for Mkeegs79

Maybe Nintendo needs. That will benefit them huge.

Avatar image for SpiderFreak

I agree that GTA is a "cesspool of filth." But I also think that it's Rockstar's right to make that game. America is going in a downward spiral of taking away freedoms. I'd love nothing more than for GTA to just stop being made for many reasons, not the least of which is the bad rap it's giving games in general. But I would fight to the death for their freedom to make it. SF

Avatar image for Drudaddy

Microsoft needs to do the gaming industry a favor and buy out rockstar, and get take-two out of a finance sling (and have gta exclusive to the xbox360)

Avatar image for stinkster

Cesspool or not, I think the GTA series is sweet. If you take away all of the "amoral actions", you notice the mechanics that have won it so much prestige.

Avatar image for BahamutX83

GTA is, IMO a cesspool of filth. I'm just surprised it took this long for Washington to get up in arms over the game, and like Splitterguy said it's funny how it's over something hidden that's no different than the regular content in the game. If this story proves to be true then at least I have proof that the bigwigs at Take-Two are idiots. But, once again a lot of this is just my personal opinion.

Avatar image for americahellyeah

Try as they might they can't shutdown Take Two. Because they are all just "really really lame". Maybe GTA VI will break the trend and politicians will finally decide that they're fighting for something that will never happen. Politicions come and go but GTA stays eternal.

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