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Take-Two Cutting Costs Again Following Sales Decline

Strauss Zelnick

Take-Two Interactive, the brand behind such popular gaming titles such as the 2K franchise, has officially released their financial results for their third fiscal quarter which ended on December 31st, 2023.

The data demonstrates that the company did beat their guidance and also reported their smallest quarterly net loss since their acquisition of Zynga back in May 2022, but they also reported a decline in sales and bookings.

Here is a breakdown, courtesy of GamesIndustry.biz.

  • Net revenue: $1.37 billion (down 3% year-over-year)
  • Net loss: $91.6 million (compared to $153 million in the year-ago quarter)
  • Total net bookings: $1.34 billion (down 3% year-over-year%)

Grand Theft Auto 5 and Online, Red Dead Redemption, and Zynga’s lineup performed well during Q3 and exceeded the company’s expectations, but NBA 2K reported  “softness” in NBA 2K24 sales. NBA 2K24 has sold around 7 million, while NBA 2K23 sold around 8 million, a stark dip in sales and recurrent customer spending.

“Remember, this is still a very good news story,” Take-Two CEO Strauss Zelnick said during a call with GamesIndustry.biz.  “This is the number one-selling sports title in North America, obviously the number one basketball title. We’ve sold-in over 7 million units, and in the fullness of time, NBA 2k24 will generate net bookings in line with NBA2K23. So this is largely a timing matter.”

Zelnick also spoke on the challenges of launches new titles within the mobile market in recent years, and he does see a change in that trend of late.

“I do think it’s been changing of late,” Zelnick said. “Outside of our business, [2023 new release] Monopoly Go is a very significant hit. And inside of our company, we have two significant hits: Match Factory which is doing really, really well, and Top Troops, which is doing extraordinarily well also. And then we have some other titles in-market bubbling up that are looking super-promising.

“I do think it’s a reflection of the consumer rebounding. As you know, in 2022 mobile had its first down year ever, and it’s been recovering ever since. So I’m very encouraged that staying the course and being willing to invest in what we believe is the highest quality mobile interactive entertainment is beginning to pay off.”

Take-Two is carrying out another “cost reduction plan”, but it is unclear how many people may be laid off in the current one, but did warn that the current plan is expected to be “more robust” than the last one.

“After ten years of unbridled industry growth and plenty of company growth, we think it’s time to become really efficient at everything we do, especially in advance of this extraordinary pipeline,” Zelnick said. “We want to make sure we can avail ourselves of the maximum operating leverage possible.

“And remember, our cost profile isn’t just about headcount. Our biggest line-item expense is marketing, actually. So optimizing marketing would be a terrific way to make sure the company gets more efficient.”

 

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