Take-Two Interactive Software announced its financial results for the third quarter of the fiscal year 2023, related specifically to the period between October 1, and December 31, 2022. We also get a sales update for Grand Theft Auto V and Red Dead Redemption 2.
Net revenue grew 56% year-on-year, but the company recorded a net loss of $153.4 million compared to net income of $144.6 million in the previous fiscal year.
As usual, the official press release included a comment from CEO Strass Zelnick, who mentioned that net bookings were slightly below expectations. He also added that the prediction for full-year net bookings has been lowered.
“During the third quarter, we continued to execute on our ambition to create the highest-quality, most engaging interactive entertainment franchises in the industry. Our new game releases and post-launch content received significant critical acclaim; however, our Net Bookings of $1.38 billion were slightly below our prior guidance, as we believe that consumers shifted their holiday spending toward established blockbuster franchises and titles that were offered with pricing promotions in light of macroeconomic conditions. While our catalog benefited from this trend, it affected the performance of certain of our new releases and recurrent consumer spending for some of our console and PC games."
"We are operating in an environment that is in many ways more challenging than we anticipated and we are lowering our Fiscal 2023 Net Bookings guidance to $5.2 to $5.25 billion to take this backdrop into account. Accordingly, we have embarked on a cost reduction program that we believe will deliver over $50 million of annual savings, which is in addition to the $100 million of annual cost synergies that we plan to realize from our combination with Zynga. These initiatives are expected to optimize our Company’s expense structure, while also positioning us to deliver on our anticipated growth trajectory. Our balance sheet remains strong, allowing us to navigate these uncertain times with confidence."
We have always managed our business for the long-term. As we achieve the powerful synergies from our combination with Zynga, release new titles from our robust multi-year pipeline, and execute on our cost savings initiatives, we expect to deliver sequential growth and record performance over the next several years, which we anticipate will drive meaningful shareholder value."
We then hear more about the cost reduction program mentioned by Zelnick. The company plans to save $50 million annually starting with the current quarter. It will involve " personnel, processes, infrastructure, and other areas" and will "primarily focus on corporate and publishing functions."
We also get an update on the sales of the publisher's most prized properties, including Grand Theft Auto V, which has shipped over 175 million units, and Red Ded Redemption 2, which shipped over 50 million units.
The previous update, provided in November (updated to September 31) had GTA5 at over 170 million units, while Red Dead Redemption 2 was at over 46 million units.
Lastly, we read a list of financial highlights on the company's brands.
Rockstar Games:
- On January 19, announced that Grand Theft Auto: The Trilogy – The Definitive Edition is available to purchase on Steam, and on sale through February 2 as part of the Rockstar Games Publisher Sale. In addition to modern controls, graphical and environmental upgrades, and other enhancements — these versions of Grand Theft Auto III, Grand Theft Auto: Vice City, and Grand Theft Auto: San Andreas are Playable on Steam Deck and support additional features including achievements and more.
- Rockstar Games continued to provide an array of free content for their vast and growing online communities, including:
- On December 13, introduced Los Santos Drug Wars, a mind-expanding new GTA Online story update. Los Santos Drug Wars includes an ongoing slate of content, including additional story missions, a new Acid Van business, a fleet of classic and contemporary rides, new weaponry for players to expand their arsenal, and so much more. The update also adds a wide range of community-requested items, including new improvements to Freemode and beyond, various quality-of-life improvements, vehicle and economy updates, and other enhancements.
- To celebrate Halloween, Grand Theft Auto Online delivered a month-long schedule of events and gameplay, including the Beast vs. Slasher Adversary Mode, enhanced rewards and payouts, spooky items, and more.
- Through the GTA+ premium membership program, enrolled members benefit from a rotation of numerous exclusive in-game benefits, including vehicles, upgrades, and special perks in Los Santos Drug Wars.
- Released new updates for Red Dead Online, including the Halloween Hardcore Telegram Mission, and new Call to Arms locations for Halloween and the holidays.
2K:
- Continued to drive engagement for NBA 2K23 with the launch of seasons that feature new songs by top artists, apparel, themed events, and more.
- On October 18, 2K released NBA 2K23 Arcade Edition, the authentic mobile experience for the NBA 2K basketball game on Apple Arcade. The experience includes the all-new “The Greatest” mode, which features 20 of the “Greatest of All-Time” NBA players from the current NBA season at launch, along with official NBA commentary for a more immersive and realistic NBA gameplay experience. This is in addition to a variety of features and modes that offer more ways to play, including Association Mode, where aspiring coaches can play out becoming the GM or Head Coach of their favorite NBA Franchise or build out their dream team.
- On October 14, 2K released PGA TOUR® 2K23, the latest entry in the golf simulation video game franchise. Featuring PGA TOUR icon and all-time sports great Tiger Woods as cover athlete, PGA TOUR 2K23 celebrates Woods’ legacy by introducing him as both a playable in-game pro and an Executive Director advising the game’s development team. PGA TOUR 2K23 included 20 licensed courses at launch, including the industry-leading Course Designer, offering players the opportunity to build their dream courses and share them with a global online community. PGA TOUR 2K23 also offers new casual modes to help new players get into the game, while giving seasoned players new challenges and opportunities to work on their skills. The introduction of Topgolf offers a unique experience emulating the popular golf entertainment phenomenon, where players can aim for targets and try to earn the highest score. Training mode offers multiple ways to develop skills, including swing calibration, lessons, chipping practice, a driving range and a putting green.
- In December, 2K and HB Studios supported PGA TOUR 2K23 with a limited-edition holiday bundle that included NBA 2K23 and new content featuring branded gear from Barstool Sports, 100 Thieves, and Dude Perfect.
- On January 23, announced that WWE 2K23, the newest installment of the flagship WWE video game franchise developed by Visual Concepts, will be coming soon for PlayStation 5, PlayStation 4, Xbox Series X|S, Xbox One, and PC via Steam. In celebration of his 20 anniversary as a WWE Superstar, 16-time World Champion, Hollywood icon, record-setting philanthropist, and WWE 2K23 Executive Soundtrack Producer, John Cena, will be featured on the cover of each edition of the game. Global music phenom Bad Bunny - Billboard's Top Artist of the Year and one of the most streamed artists in the world for 2022 - will also make his WWE 2K debut. WWE 2K23 features several franchise advancements, including a unique new take on the 2K Showcase, the WWE 2K introduction of the fan-favorite WarGames, and expansions to several marquee game modes. WWE 2K23 Deluxe Edition and Icon Edition are scheduled for worldwide release on Tuesday, March 14, 2023 via Early Access, followed by the Standard and Cross-Gen editions on Friday, March 17, 2023.
- During the quarter, WWE Supercard released new seasons, including new card tiers, official match commentary and special equipment. This was in addition to their earlier Halloween-themed content drop featuring the infamous Chucky character from the Child’s Play horror film franchise, which coincided with the Season 2 premiere of the Chucky TV series on USA/Syfy.
- On December 2, 2K and Marvel Entertainment released Marvel's Midnight Suns on Windows PC via Steam and Epic Games Store, PlayStation 5 and Xbox Series X|S. Created by Firaxis Games, the legendary studio behind the critically-acclaimed, world-renowned XCOM and Civilization franchises, Marvel's Midnight Suns combines the rich story, character relationships, customization and progression of an RPG with the tactical strategy and combat mechanics of a revolutionary new card-based tactics game.
- On December 22, 2K announced Firaxis Tactical Legends, a new special offer on Steam that was available through January 2, 2023 and includes base game versions of Marvel's Midnight Suns, XCOM: Enemy Unknown and XCOM 2.
- On October 21, 2K and Gearbox Software launched New Tales from the Borderlands, a standalone, choice-based interactive narrative adventure set in the Borderlands universe. The title contains a number of compelling narrative dynamics and features that bring the cinematic experience to new heights.
- On October 24, 2K and Supermassive Games launched a new Halloween-themed DLC for The Quarry featuring a classic makeover with new character outfits inspired by ‘50s horror. Entitled the 50s Throwback Character Outfit DLC, the update was free for new and returning players for a limited time, after which it was available for individual purchase.
- On November 15, 2K announced Civilization VI: Leader Pass, a new season pass that adds 18 new playable leader selections to Civilization VI, offering players more ways to rule in the critically-acclaimed strategy game.
Private Division:
- On December 9, Private Division and Piccolo Studio announced After Us during The Game Awards. This riveting exploration adventure game will launch in Spring 2023 for PC on Steam, and on PlayStation 5 and Xbox Series X|S.
- On December 14, Private Division celebrated its 5 anniversary by revealing a publishing agreement with Bloober Team. The independent Polish developer is best known for creating psychological horror games and is working on an upcoming unannounced new survival horror IP in partnership with Private Division. Additionally, the label unveiled the Private Division Development Fund to support smaller independent development teams with project financing and mentorship opportunities to enable them to self-publish their ambitious titles. Private Division also released a video highlighting its internal studios and developers they have recently partnered with for upcoming releases.
Zynga:
- On October 26, CSR Racing 2 released Race Pass, an all-new seasonal way to earn rewards, complete objectives, and unlock some of the most exciting cars in CSR history. Race Pass features innovative new rewards that help players max out their cars and drive stronger player retention and monetization.
- On November 17, Rollic completed the acquisition of mobile game developer Popcore. A leader in the puzzle genre, the Berlin-based Popcore is home to a number of chart-topping games further strengthening Rollic as a leader among hyper-casual publishers worldwide. Following the acquisition, Popcore’s Tap Away game reached the #1 spot for most downloaded game multiple times throughout the quarter in Apple’s U.S. App Store.
- On November 17, Top Eleven launched a wide slate of in-game updates celebrating the World Cup, including a limited-time mini-game, Penalty Clash, in which players from around the globe could compete for rewards and in-game content.
- On November 21, Harry Potter: Puzzles & Spells launched Club Quidditch, the game’s first-ever Club vs. Club competition, which drove a meaningful lift in player engagement and monetization during the event.
- In December, Rollic’s game Balls’n Ropes reached the #1 most downloaded game in the U.S., giving Rollic a total of 20 games that have reached #1 or #2 in Apple’s U.S. App Store.
- During the quarter, Small Giant released several in-game events in Empires & Puzzles including Alliance Quest Musketeers, the game’s biggest-ever Black Friday event in terms of revenue, and Contest of Elements.
Ghost Story Games:
- On December 9, Ghost Story Games, the development studio led by game creator Ken Levine, announced during The Game Awards that Judas, an all-new single-player, narrative first-person shooter is in development for the PlayStation 5, Xbox Series X|S, and PC via Steam and Epic Games Store. In conjunction with the project reveal, Ghost Story Games has launched the official pages for Judas on Steam and the Epic Games Store where fans can now add the game to their Wishlist.
