GTA Take-Two publisher notes drop in demand from pandemic highs

Take-Two Interactive Software Inc’s NBA 2K22 and Grand Theft Auto 5 are seen for sale at a store in Manhattan, New York, U.S., February 7, 2022. REUTERS/Andrew Kelly

Sign up now for FREE unlimited access to Reuters.com

May 16 (Reuters) – “Grand Theft Auto” publisher Take-Two Interactive Software (TTWO.O) on Monday became the latest U.S. game company to forecast annual sales below estimates , as demand begins to level off in a post-pandemic world.

The return of social life in a reopening economy and a tight supply of big game titles herald tougher times for the video game industry as sales cool from dizzying heights during lockdowns.

Rivals Electronic Arts (EA.O) and Activision Blizzard (ATVI.O) also posted a weak quarter, while Roblox Corp (RBLX.N) forecast net losses for the “foreseeable future.” read more

Sign up now for FREE unlimited access to Reuters.com

“As the return to normalcy continues to unfold, the impact on our business, operations and financial results will depend on numerous evolving factors that we cannot predict,” Take-Two said in a statement.

For the full year, Take-Two expects adjusted sales of $3.75 billion to $3.85 billion, while analysts expected $3.96 billion, according to Refinitiv IBES data.

The company’s forecast for first-quarter adjusted sales of $700 million to $750 million was also below estimates of $777.9 million.

However, the forecasts did not take into account the pending acquisition of “Farmville” maker Zynga (ZNGA.O) and interest costs related to the deal, which is expected to close in May.

Quarterly net bookings, products and services sold digitally or in stores, are up 8%, thanks to flagship titles like “NBA 2K22” and “GTA V” and the new “WWE 2K22,” but the figure is still short of the estimates.

Take-Two’s net income fell to $110.97 million in the fourth quarter ended March 31, from $218.81 million a year earlier.

Excluding items, it earned $1.09 per share, beating estimates of $1.04 per share.

Shares of the company rose 2.5% in extended trading.

Earlier on Monday, the Saudi Arabian Public Investment Fund revealed in a filing that it more than doubled its stake in Take-Two during the quarter.

Sign up now for FREE unlimited access to Reuters.com

Reporting by Richard Rohan Francis in Bangalore; Edited by Anil D’Silva and Devika Syamnath

Our standards: the Thomson Reuters Trust Principles.

Leave a Reply

Your email address will not be published.