Take-Two’s summer earnings are the calm before the Red Dead Redemption 2 storm | Tech Industry
For Take-Two Interactive Software, it’s the calm before the storm. The New York company reported better-than-expected financial results for the first fiscal quarter ended June 30, but the company has the most-anticipated game of the year, Rockstar Games’ Red Dead Redemption 2, coming on October 26. That’s when the company could kick off another big hit cycle.
Red Dead Redemption 2 is the sequel the blockbuster 2010 game Red Dead Redemption, and expectations are so high for it that numerous game companies have moved their rival game releases as far as possible from Red Dead’s release date. They’re giving Red Dead Redemption 2 a wide berth.
“We fully expect the October 26 launch of Red Dead Redemption 2 to mark yet another creative milestone in Rockstar Games’ renowned history, and will further illustrate their ability to deliver entertainment experiences that redefine the industry and captivate audiences throughout the world,” said Strauss Zelnick, CEO of Take-Two, in an analyst call.
Take-Two’s first fiscal quarter ended June 30 was driven by the strength of Grand Theft Auto Online, Grand Theft Auto V, and NBA 2K18. Take-Two reported this morning that NBA 2K18 sold to retailers more than 10 million copies since its launch in September 2017. That game’s sales are up 17 percent from a year earlier and it is Take-Two’s highest-selling sports game ever, Zelnick said.
The successor game, NBA 2K19, debuts on September 11.
Grand Theft Auto V’s sales are approaching 100 million units since 2013. Take-Two will keep that going with April’s release of the premium online edition. Recurrent consumer sales, driven by Grand Theft Auto Online and Grand Theft Auto V, was 63 percent of total net bookings, up from 59 percent a year earlier, and it exceeded expectations in the quarter. In mobile, Social Point’s Dragon City and Monster Legends were big contributors in free-to-play mobile games.
Revenues came it at an adjusted $288.3 million in the first quarter ended June 30. 62 percent of revenues were digital. Net income was $71.7 million, or 62 cents a share, up from $60.3 million, or 56 cents a share a year earlier. Analysts expected Take-Two’s adjusted net income to be 18 cents a share on revenues of $258.9 millon in the quarter.
Take-Two said its first fiscal quarter bookings would be about $215 million to $265 million. The company expects second-quarter adjusted revenue of $500 million to $550 million. Analysts were hoping for $583.8 million. For the full fiscal year, Take-Two raised its adjusted revenue forecast to $2.7 billion to $2.8 billion. Analysts were expecting $2.77 billion.
Take-Two’s market value is about $12.9 billion. Take-Two’s stock is up 9.8 percent in after-hours trading at $125 a share.