Take-Two reports net loss of $100 million as Strauss Zelnik says “I don’t believe the entertainment business is recession proof”

Take-Two has released its first financial report after closing its acquisition of Zynga. Although the publisher’s revenue rose in the three months ended June 30, it posted a huge loss due to increased costs and macroeconomic factors.

• Take-Two reported net revenue of $1.1 billion, which is up 36% year-over-year.
• Despite the growth, sales were still below Wall Street’s expectations of $1.1 billion.
• It is worth noting that this financial report includes Zynga for 39 days of the quarter, so the acquired company should have a more significant impact on the publisher’s results during the next three months.
• The company’s net loss was $100.8 million, which is down 168.3% from net income of $152.3 million for the comparable period last year.
• Net bookings grew 41% year-over-year to $1 billion. Digital sales accounted for 95% of net bookings.
• Recurrent consumer spending grew 48% year-over-year and accounted for 73% of total net bookings.

“Over and over again, I said I don’t believe the entertainment business is recession proof or even necessarily recession resistant,” Take-Two CEO Strauss Zelnick said during an earnings call. “And I think we’re seeing now the decline in consumer spending and increase in inflation will have an impact on the industry. You’ve seen it from our report today and from our competitors’ reports as well.”

• Take-Two’s new forecast takes into account different factors, including “foreign currency pressures and macroeconomic uncertainty.”
• The company expects its net bookings to reach between $5.8 billion and $5.9 billion for the full year ending March 31, 2023.
• The net loss is expected to range from $438 million to $398 million.

New data on game sales

• GTA V reached 170 million units sold worldwide, with the whole series reaching 380 million copies sold.
• Red Dead Redemption 2 sold 45 million units, with the whole series reaching 68 million units sold.
• NBA 2K22 sold 12 million copies, with the whole franchise selling 125 million units.
• Take-Two postponed the launch of Marvel’s Midnight Suns (expected to come out before March 2023) and one unannounced game, which is now scheduled for the next fiscal year beginning April 2023.