Take-Two Interactive Software reported that its bookings in the June quarter were $1.22 billion, or flat compared to $1.20 billion a year ago. In after-hours trading, Take-Two stock is down 1.2% to $137 a share.
The New York company said the bookings were in line with expectations and it remains highly confident in its path forward. We would note that path includes Grand Theft Auto VI, which is still on schedule to ship in the fall of 2025.
Take-Two said it achieved solid first quarter results by engaging players with exciting new game releases and content updates, while maintaining a focus on efficiency. The company has completed about 600 layoffs and cost reductions aimed at ensuring that efficiency. Meanwhile, it says that its core franchises are healthy.
“We achieved solid first quarter results by engaging our players with exciting new game releases and content updates, while also maintaining our focus on efficiency. Our management team remains confident in our path forward and we are reiterating our Net Bookings outlook for the year of $5.55 to $5.65 billion,” said Strauss Zelnick, CEO of Take-Two Interactive, in a statement. “We are highly optimistic about our future — our core franchises remain vibrant, our teams are hard at work on the most ambitious development pipeline in our history, and we are evaluating continually new growth opportunities that have the ability to enhance our business model and financial profile. As we pursue our strategic priorities, we expect to achieve sequential increases in net bookings in Fiscal 2026 and 2027, which we believe will drive long-term shareholder value.”
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Grand Theft Auto V, launched in 2013, has sold over 200 million units to date. That’s the same number that the company mentioned last quarter so it’s not clear how many sold in the first fiscal quarter ended June 30, 2024.
“Our teams are hard at work on the most ambitious development pipeline in our company’s history, and we remain focused on new growth opportunities to enhance our business model and financial profile,” Take-Two said.
Recurrent consumer spending was flat for the period and accounted for 83% of net bookings, which includes all money that came in for the quarter. By contrast, revenues don’t include figures such as subscription or in-app purchase revenue that players will use in future quarters.
Mobile increased mid-single digits, driven by the addition of Match Factory and growth in Toon Blast, which was partially offset by declines in their hyper-casual mobile portfolio and Empires and Puzzles. Grand Theft Auto Online and NBA 2K were both down.
During the quarter, the company launched TopSpin 2K25, No Rest for the Wicked on Early Access for PC, NFL 2K Playmakers, and Star Wars Hunters. Digitally-delivered net bookings increased 2% and accounted for 97% of the total. The increase was largely driven by a modest increase in net bookings, as well as mix of business.
In the period, 82% of console game sales were delivered digitally, up from 80% last year. Catalog accounted for $447.8 million (88% of non-mobile net bookings).
The largest contributors to revenue were NBA 2K24, Grand Theft Auto Online and Grand Theft Auto V, Toon Blast, Empires & Puzzles, our hyper-casual mobile portfolio, Match Factory!, Red Dead Redemption 2 and Red Dead Online, Words With Friends, and Merge Dragons!.
Strauss Zelnick interview
“We had a great first quarter, a great start to the year. We’ve reiterated our guidance for the year, and we expect tremendous sequential growth in fiscal 26 and 27,” Zelnick said in an interview with GamesBeat. “The broader game industry has returned to modest growth.”
He said he sees some low-single digit growth in the console side and middle single-digit growth on the mobile market and that these are “decent tailwinds.”
“Of course, with that backdrop, we still have to make hits in order to survive and thrive,” Zelnick said. “You’re not seeing too many new layoffs, and there were a lot of layoffs, and we had some, as you know, modest layoffs. So those are always painful for the individuals, the companies and the industry, but it does feel like we’re through those.”
He believes more companies see themselves as “right sized” now, though perhaps not all companies. Despite the recent meltdown in the Tokyo stock market, Zelnick said he is not as concerned about consumer demand.
“I think the consumer is going to be just fine,” he said.
Zelnick said it is difficult when you have to part with colleagues. But he said the company’s own layoff and cost reduction process went as it expected and the company feels like it is a very efficient organization.
“We feel like we’re in a good spot at the moment,” he said.
I asked if he had any sense of when the next generation of game consoles will arrive, and he said he didn’t have any insight into that.
The new Borderlands movie is about to debut and hasn’t received great reviews from critics. But Zelnick said he was optimistic and hopeful.
I asked if he was in the mind to greenlight new intellectual properties, given the slight improvement. He said that it’s always tempting to focus on successful franchises, but he added, “If that’s all you do over time, given that all IP does have a decay curve, if you fail to make new intellectual properties and creating new hits, you won’t have a business. You’re burning the furniture. So we do both. We have 11 franchises that have each had at least one five million unit seller. We have something like 67 that have sold over two million in individual releases. I think we have the best collection of owned intellectual property in the business. And nonetheless, we’re constantly working on and releasing and hopefully creating inside of new intellectual properties, because we’re willing to do that.”
He added, “We have Match Factory at Peak, a division of Zynga. We have Screw Jam and Twisted Tangled from Rollic, a division of Zynga. We have games with Game of Thrones: Legends, Star Wars: Hunters and many other titles coming from Zynga. We have titles coming from 2K. We have Private Division titles. The business is excited about new intellectual property. You are right. It’s the riskiest part of business. It doesn’t always work out, but I think it has to be done.”
He noted he saw one report that suggested playtime is down for gamers, but he said Take-Two hasn’t seen that with its games.
Rockstar Games
The company said the Grand Theft Auto series exceeded expectations, as momentum continues to build ahead of the launch of Grand Theft Auto VI in fall 2025.
Grand Theft Auto Online surpassed projections, led by its summer content pack, Bottom Dollar Bounties, which launched June 25. The audience for Rockstar’s premium membership service, GTA+ grew strong double digits over last year, with Rockstar Games offering its members an array of valuable benefits that range from enhancing the in-game experience to providing access to their classic titles, including the recent addition of L.A. Noire.
Red Dead Redemption 2 has sold-in more than 65 million units to-date, or about one million more than last quarter. In addition, Red Dead Online continued to engage its audience during the period with new monthly bonuses and free outfits inspired by top content creators within the Red Dead community.
2K
NBA 2K24 delivered a solid quarter and it has sold-in close to 11 million units to date. Engagement remains strong, with users playing more frequently and participating in more games compared to NBA 2K23 for the same period last year.
The franchise continues to expand its audience through several innovative mobile experiences, including NBA 2K24: MyTeam, a free-to-play card-collecting experience that has been downloaded nearly three million times since its launch in February. Moreover, NBA 2K24 Arcade Edition continues to enjoy huge success on Apple Arcade and is consistently a top 2 game on the service.
WWE 2K24, which launched at the end of fiscal 2024 earlier this year, has continued to grow its audience and enhance its profitability. The teams have driven meaningful engagement through the release of several content packs, with more on the way. To-date, players have logged 27 million hours of gameplay across more than 200 million matches featuring a series high roster of over 300 past and present superstars.
On April 4, 2K and Cat Daddy Games released NFL 2K Playmakers, a new free-to-play mobile title that allows fans to collect NFL player cards and assemble an exciting roster of offensive, defensive, and special teams.
On April 26, 2K and Hangar 13 launched TopSpin 2K25, marking the return of a popular tennis franchise after a 13-year hiatus. The title was well-received by critics and fans alike, who praised its authentic tennis experience with deep personalization and legendary venues. 2K is supporting TopSpin with a series of Centre Court Passes that feature iconic courts, brands, and tournaments.
During the period, Take-Two completed its acquisition of Gearbox Entertainment. This quarter, the company has more than 13,000 employees, including 10,000 in development, and the number went up despite layoffs because of the addition of Gearbox.
“We are thrilled to welcome Randy Pitchford and his studio to the Take-Two and 2K family. We have identified many potential growth opportunities for the Borderlands series and Gearbox’s catalog,” Take-Two said.
Zynga
Zynga delivered another solid quarter, including phenomenal performance at Peak. Match Factory! is scaling quickly and has established itself as one of Zynga’s largest contributors to net bookings.
The title is responding well to Zynga’s investment in user acquisition, reflected in net bookings growth of more than 50% over last quarter. The company said there are more growth opportunities ahead.
Toon Blast delivered strong year-over-year growth for the third consecutive quarter. As the title celebrates its 7th anniversary this month, Take-Two said it has become a top 10 grossing game in the U.S. Apple App Store this quarter and has achieved more than $2.5 billion in lifetime gross bookings.
On June 4, Zynga and Lucasfilm Games launched Star Wars: Hunters – the label’s first-ever cross-platform title, which is available for free on Nintendo Switch and iOS and Android devices. Expanding the iconic Star Wars universe with new locations and characters, the competitive battle arena game received a tremendous amount of fanfare from the media and audiences around the globe. Players can look forward to additional content offerings coming soon.
And blended monetization efforts in hyper-casual are progressing well at Rollic, which crossed 3.6 billion all-time downloads. Fan-favorite titles, Screw Jam and Twisted Tangle, both performed well this quarter, becoming top 50 and top 100 grossing games, respectively, in the U.S. Apple App Store.
The direct-to-consumer business continues to grow, and teams are working actively to add more titles each quarter to this highly accretive, owned distribution channel, the company said. Looking ahead, Zynga has numerous titles in development and soft launch, including the latest installment in their popular racing franchise, CSR Racing 3.
Outlook for FY25
Take-Two continues to expect net bookings to be in the range of $5.55 billion to $5.65 billion, representing 5% year-over-year growth, for the fiscal year ending March 31, 2025.
The largest contributors to net bookings are expected to be NBA 2K, the Grand Theft Auto series, Toon Blast, the hyper-casual mobile portfolio, Match Factory, Empires & Puzzles, the Red Dead Redemption series, Sid Meier’s Civilization VII, and Words with Friends.
Take-Two continues to expect recurrent consumer spending growth of approximately 3%, representing 77% of net bookings.
The recurrent consumer spending forecast assumes a high single digit increase for mobile, driven by Match Factory and Toon Blast, which are partially offset by declines in the hyper-casual mobile portfolio and Empires & Puzzles.
Take-Two expects flat results for NBA 2K and a decline for Grand Theft Auto Online. The company expects the net bookings breakdown from labels to be roughly 50% Zynga, 32% 2K, 17% Rockstar Games, and 1% other.
Take-Two forecasts geographic net bookings will split to be about 60% United States and 40% international in the fiscal year. The firm expects Non-GAAP AUOCF to be an outflow of $150 million, and it plans to deploy approximately $140 million, primarily for capital expenditures for game technology and office buildouts.
Given the groundbreaking pipeline (which includes Grand Theft Auto VI), Take-Two expects to achieve tremendous growth, including sequential increases in net bookings in fiscal 2026 and 2027.
Games pipeline for FY25 to FY27
The company expects to ship approximately 40 titles through FY27, or the year ended March 31, 2027.
In fiscal 2025, Take-Two have 16 titles in our pipeline, several of which have already been released. The slate includes seven immersive core titles, including TopSpin 2K25, NBA 2K25, WWE 2K25, and Sid Meier’s Civilization VII.
The company has two indie titles, the first of which is Moon Studio’s No Rest for the Wicked, which launched on April 18 into early access on PC. Private Division, along with Wētā Workshop, also announced Tales of the Shire: A The Lord of the Rings Game, which is planned for release later this year.
There are five mobile titles, including NFL 2K Playmakers, Star Wars: Hunters, and Game of Thrones: Legends. Lastly, there are two new iterations of prior releases planned for the year.
Looking ahead, the pipeline for fiscal 2026 and fiscal 2027 has 24 titles planned, including 15 immersive core releases, six of which are sports simulation games; one independent title; five mobile games; and
three new iterations of previously released titles.
On a GAAP basis, quarterly revenue was $1.34 billion, up 4% from $1.28 billion a year ago, while the net loss was was $262.0 million, or $1.52 per share, as compared to $206.0 million, or $1.22 per share, for the comparable period last year.
For the second fiscal quarter ending September 30, 2024, Take-Two expects net bookings to be about $1.42 billion to $1.47 billion, with EBITDA non-GAAP loss at $59 million to $81 million.
There are no launch dates yet for Zynga’s CSR Racing 3, Ghost Story Games’ (Ken Levine’s studio) Judas, and Private Division’s Tales of the Shire: A The Lord of the Rings Game. I’m looking forward to Sid Meier’s Civilization VII, coming on the consoles and PC for Q4 fiscal 2025.
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