CEO Strauss Zelnick denies rumours about Grand Theft Auto 6 that were based on $8 billion in bookings for the fiscal year 2025.
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Take-Two Interactive today released financial results for the fourth quarter and full fiscal year ending March 31, with the company continuing to show significant top-line growth fueled by the Zynga purchase but ongoing losses.
Take-Two financial 2023 complete year results
- Net earnings: Up 53% to $5.35 billion
- Net reservations: Up 55% to $5.28 billion
- Bottom lines: $1.12 billion, compared to earnings of $418 million for the previous year
Take-Two financial 2023 4th quarter results
- Net earnings: Up 56% to $1.45 billion
- Net reservations: Up 65% to $1.39 billion
- Bottom lines: $610 million, compared to earnings of $111 million for the previous year
Take-Two financial 2024 projection
- Net profits: Flat to up 2%
- Net reservations: Up 3-5%
- Bottom lines: Between $518 million and $477 million
A number of well-known games, including NBA 2K23, Grand Theft Auto Online/Grand Theft Auto 5, Empires & & Puzzles, Toon Blast, Red Dead Redemption 2/Red Dead Online, WWE 2K23, Merge Dragons, and Words With Friends, contributed to the most significant drivers for the fourth quarter.
Grand Theft Auto 5 has really delivered 180 million computers worldwide as of this writing, while Red Dead Redemption 2 relies on 53 million.
A new record for the franchise at this point in the game’s lifespan, NBA 2K23 has also sold 11 million systems to far and boasts the highest-ever sales of virtual money.
Although the effectiveness of those games helped the company’s Q4 web reservations above its estimate range of $1.31 billion to $1.36 billion, they might not be able to prevent Take-Two from also reporting higher-than-expected losses.
Take-Two had projected Q4 net income of around $214 million, but it much exceeded that with a reported net income of $610 million.
The company attributed the significantly larger losses than expected to impairment charges of $465.3 million for acquisition-related intangible properties and $54.2 million in capitalised software programme advancement costs for titles that were never delivered or were cancelled.
While the company forecasted earnings for the current year as well, it also gave investors something to look forward to by predicting that net reservations will reach $8 billion in the following year and continue to grow in 2026.
We question Take-Two CEO Strauss Zelnick during a pre-briefing call if that $8 billion aim can be reached without the debut of a large new Grand Theft Auto game. Grand Theft Auto 6 has been disclosed, although no release date has been announced by the company as of yet.
We’re not talking about specific titles, says Zelnick. “We believe that to be very likely. You understand how odd it is for us to talk about our past years. And when we do, it’s because we are quite confident in ourselves. It reflects a pipeline that we have been acquiring for a while. In financial 24 we are beginning to see it as it relates to fulfilment, and in financial 25 we anticipate some great successes.”
He is aware that the industry has 36 titles now scheduled for release in the years 25 and 26.
The three “immersive core” video games that Take-Two plans to deliver by the end of March 2024 are NBA 2K24, WWE 2K24, and “an eagerly-anticipated brand-new IP from among our premier studios.”
Additionally, it has two “midcore/arcade” games planned for this year, one of which (Lego 2K Drive) is out today.
Midnight Suns’ release for the Nintendo Switch was recently postponed by Take-Two. We question Zelnick if Take-Two is prepared to continue supporting the Switch beyond this year, given the rising rumours that Nintendo is creating a follower system for next year, given that it still has Zynga’s Star Wars Hunters and Lego 2K Drive scheduled for release.
He answers, “Yes, I think we’ll keep supporting it.
We also brought up the issue of mid-generation console revitalizations with Zelnick. When Microsoft first unveiled the Xbox One X at this time in the last console cycle, Sony swiftly followed with the PlayStation 4 Pro. We inquire as to whether or how such iterative hardware will effect Take-Two’s service in the previous generation, as well as whether or how we should expect to see it this time around.
Zelnick says, “We probably will, and they didn’t really have an effect on business.”
While Take-Two’s console and PC roster receives the majority of attention, the company’s forecast for the current year also demonstrated how the Zynga purchase significantly benefited revenue since it closed a year ago this month.
Only 12% of Take-Two’s reservations for 22 were made using mobile devices. That was based on 47% in financial year 23, and the company expects that figure to increase to 53% this year.
Zelnick admits the transformation, but adds that it required some effort on the part of the industry’s top executives to adapt.
He says, “[Zynga president] Frank Gibeau continues to operate Zynga in a really independent fashion. We’ve always had an extremely decentralised method with our brands.
“We want to be helpful, and as you might expect, we do have centralised services, including information analytics and our customer database, which can support all of our labels. Frank and his team are in charge of and drive Zynga on an existential level; we think this is the greatest way to generate value in the mobile space.