Take-Two reported a drop in revenue in the third fiscal quarter
Take-Two presented a report for the last fiscal quarter and a forecast for the whole year. Also, its management sparingly commented on the departure of Dan Houser from Rockstar.
Red Dead Redemption 2
First about the numbers.
The company’s third fiscal quarter ended on December 31, 2019. The data in the Take-Two report complies with generally accepted International Accounting Standards (GAAP).
Note that many Take-Two indicators have sunk in annual terms. This is due to the fact that a year earlier the company had peak performance in connection with the release of 2018’s Red Dead Redemption 2. In the past quarter, Take-Two did not have launches comparable in scale.
Figures for the quarter
- Net revenue – $930.1 million. The indicator worsened in annual terms: in October-December 2018, the company earned $1.249 billion.
- Among the most profitable publisher games in the third fiscal quarter are the latest titles of the NBA series, GTA V and GTA Online, Red Dead Redemption 2, Borderlands 3 and The Outer Worlds. The latter generally exceeded Take-Two’s expectations, but the IP itself, we note, now belongs to Microsoft together with the developer Obsidian.
- 75% of the revenue came from digital purchases. In October-December, Take-Two earned $700.3 million on the digital sale of games and content for them. In the same quarter last year, revenue from them was lower: $594.7 million.
- It is noted that 37% of quarterly revenue came from IAP and DLC. In annual terms, players began spending 15% more money on virtual currency, addons and in-game purchases.
- Net receipts (net bookings) for the same time reached $888.2 million against $1.56 billion in October-December 2018. Recall that net bookings is the amount of product sales (including deferred payments from GTA Online, Red Dead Online and other online games) for the period. $690.6 million, that is, 78% of this amount came from digital sales.
- Despite the drop in total receipts, net receipts from user spending on IAP and addons increased by 6%. Their share in the total indicator is 41%.
- Net income amounted to $163.6 million. It decreased by 16.3 million in annual terms.
Game Sales
The company also went through the circulations of some of its hits for the quarter and for all time:
- Grand Theft Auto V — 5 million copies for the quarter, the total circulation reached 120 million copies. In the year of its release, the game sold 20 million copies;
- Red Dead Redemption 2 — 2.5 million copies for the quarter, 29 million copies for all time. Recall that in October, the game also appeared on the PC platform;
- The Outer Worlds — 2 million copies from the release in October;
- Borderlands 3 — 5 million copies for the quarter and 8 million copies since the release in September.
Forecast for the end of the fiscal year
Take-Two’s 2020 fiscal year will end on March 31. By this time, the publisher expects to earn up to $3.01 billion and expects a profit of up to $409 million.
The forecast was slightly adjusted downwards: in the report for the 2nd fiscal quarter, Take-Two expected annual revenue of $3.03 billion and profit of $416 million.
And one more thing
A couple of days before the publication of the quarterly report, it became known about the departure of Dan Hauser from Rockstar. He is the co—founder of the studio and the screenwriter of many of its hits, including GTA V and Red Dead Redemption 2. After his departure, Rockstar shares sank by 6%. So the management of Take-Two, presenting the report, devoted a little time to Hauser’s departure.
Take-Two CEO Strauss Zelnick said that Rockstar is now at the peak of its capabilities. This is evidenced by the excellent sales of the aforementioned blockbusters. Nevertheless, Zelnik blamed the success of the studio and its hits on another co-founder, Sam Houser, “the one who actually runs Rockstar.”
Sam Hauser is indeed the president of Rockstar and is more focused on management, while Dan was in charge of creative. Zelnik assured that Sam Hauser would not go anywhere, and thanked Dan for his “contribution to the work of the studio.”
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