Take-Two Posts Losses, Expects Rebound
Take-Two Interactive has finally released all the financial results for the third and fourth quarters, and also the entire fiscal year 2006. What took so long, you might ask? Well, that pesky SEC investigation kinda got in the way, and the numbers reflect that impact: net revenue for 2006 came in at $1.03 billion, a pretty significant drop from the $1.2 billion they posted in 2005.
But the company isn't about to suck on sour grapes just yet, as they believe the future will bring happier tidings. They blame the recent fall on the transition to a new console generation.
"The company blamed the fall in results on the transition between console generations; specifically delays and acceptance of new hardware by consumers and a lower average selling price of current generation software. Higher development costs for next generation software were also blamed for the results, as well as new investment in the company's 2K Sports brand. However, the company claims that such investments will have a positive impact on fiscal 2007 results."
Last year saw the release of several successful Take-Two titles, including the PS2 version of Grand Theft Auto: Liberty City Stories, the PSP's Grand Theft Auto: Vice City Stories, Rockstar Games Presents Table Tennis, and the award-winning Bully and The Elder Scrolls IV: Oblivion. So these helped to keep the losses down somewhat, and Take-Two hopes to see a return to that $1.2 billion number for net revenue in 2007, or perhaps even as high as $1.25 billion. Of course, Grand Theft Auto IV will probably go a long ways towards that expected rebound. Just a guess.
3/5/2007 Ben Dutka