Lower revenues, narrower loss
Franchises
During the third quarter, Take-Two saw strong performances from its popular franchises Grand Theft Auto V, Grand Theft Auto Online, and Red Dead Redemption 2. Grand Theft Auto V has sold-in more than 195 million units and Red Dead Redemption 2 has sold-in over 61 million units worldwide to-date. There is a lot of excitement over Grand Theft Auto VI, which when released, is expected to drive significant growth for the series.
The company also benefited from Zynga’s in-app purchases, which exceeded expectations in the quarter, led by Toon Blast. Zynga’s new launches Match Factory and Top Troops are performing well and TTWO remains bullish on the long-term potential of Match Factory. However, it recorded lower-than-expected ad revenues from Zynga in Q3, due to the roll-out of some changes in the hyper-casual business.
Take-Two also saw softness in its NBA 2K24 sales during the quarter. On its quarterly call, the company said that unit sales for the Gen 9 version of the game are growing double-digits year-over-year and the migration to Gen 9 platforms has been causing a significant decline in demand for the Gen 8 offering.
Guidance cut
Take-Two lowered its guidance for the full year of 2024 to reflect the softness it is seeing in mobile advertising and sales for NBA 2K24, as well as a planned release moving out of the fourth quarter and increased marketing for its new mobile title Match Factory.
The company now expects revenue to be $5.27-5.32 billion for FY2024. Net bookings is expected to be $5.25-5.30 billion. Net loss per share is expected to range between $5.95-5.85. Recurrent consumer spending is expected to grow 1% year-over-year.
For the fourth quarter of 2024, TTWO expects net revenue to be $1.32-1.37 billion. Net bookings is estimated to be $1.27-1.32 billion. Net loss is expected to range between $1.00-0.90 per share. Recurrent consumer spending is expected to decrease by approx. 5%.