Take-Two Hit with $50M Q1 Losses
It looks like the 2009 fiscal year is getting off to a rough start for Take-Two. Addressing investors this week, the company posted its first quarter numbers and revealed that it has taken a loss of $50 million, up from the $38 million loss posted during the same period last year. Ironically, the company’s actual revenue was up for the quarter, up roughly 7 percent from $240.4 million last year to $256.8 million for this most recent quarter. The loss for the quarter in spite of higher revenue was blamed on the higher than expected costs related to “unusual legal matters” related mainly to the attempted takeover by Electronic Arts, business reorganization, marketing, and R&D costs.
The news wasn’t all bad for investors, though. Take-Two announced that more than 13 million copies of Grand Theft Auto IV have been shipped as of January 31st, and the company’s wholly owned Carnival Games franchise has shipped over four million units worldwide for the DS and Wii.
According to Take-Two’s Chairman of the Board, Strauss Zelnick, “Take-Two led off fiscal 2009 with somewhat better than expected performance. Our sales reflected the continued strength and diversity of our portfolio of top franchises, including Grand Theft Auto IV, Carnival Games, NBA 2K9, and Midnight Club: Los Angeles. Looking to the balance of the year, the economy remains challenging and uncertain, and our industry will not be immune to this environment. Consumers will continue to be highly selective in their purchases, including interactive entertainment. We need to deliver innovative, exceptionally compelling products to compete for this more limited consumer spending, and we are confident in our ability to do so.”
Ben Feder, CEO of Take-Two, added, “We believe that in this economic environment, publishers that can offer both quality and value will attract the broadest audience of consumers. We believe Take-Two is solidly positioned on both fronts, with our world-class studios creating triple-A titles and Jack of All Games’ expertise in distributing value products. We will continue to focus on our competitive strengths in both of these areas, while also investing in promising emerging markets, and leveraging our leading edge software development tools and technologies. We recognize the challenges of balancing efficiency with creativity, and our team believes that we can manage the business effectively without sacrificing our renowned standards for excellence.”
There were no big surprises regarding upcoming releases from Take-Two, which listed BioShock 2, Red Dead Redemption, and the second (currently unnamed) downloadable episode for Grand Theft Auto IV listed among the releases planned through the rest of the 2009 fiscal year. Stock in Take-Two opened trading down 43 cents (about 6 percent) to $6.42 per share from the $6.85 per share trading price at close yesterday.
