Take-Two Interactive Software has released a second-quarter net bookings forecast that falls short of Wall Street’s expectations. This indicates that the gaming industry is still feeling the effects of inflationary pressures.
According to data from gaming research firm Circana, spending on videogame content in the US, including new games and character skins, remained stagnant in the first half of the year, even as console sales rose by 23 percent.
In the previous fiscal year, Take-Two incurred $79 million (approximately Rs. 654 crore) in costs related to unreleased and cancelled titles. As a result, the company decided to cancel “several titles” that were part of its fiscal 2026 lineup, choosing instead to focus on games with higher potential for success.
Take-Two forecasts net bookings for the September quarter to be between $1.4 billion (roughly Rs. 11,593 crore) and $1.45 billion (roughly Rs. 12,000 crore). However, this estimate is below analysts’ average projection of $1.45 billion, as reported by Refinitiv data.
In spite of these challenges, CEO Strauss Zelnick remains optimistic about the company’s future, believing that it will be in a “reasonably good position from an economic standpoint” at the beginning of next year, suggesting an improvement in demand.
Take-Two continues to stand by its net bookings forecast for the fiscal year ending in March 2024. The company is confident that there will be a “significant inflection point” in fiscal year 2025, with net bookings expected to surpass $8 billion (roughly Rs. 66,242 crore).
Analysts and investors are eagerly anticipating the release of Grand Theft Auto 6, which they believe will be a major boost for Take-Two.
“For investors, the focus is more on Take-Two maintaining their guidance,” said Wedbush Securities analyst Nick McKay.
After the news was announced, Take-Two’s shares rose by 3.8 percent.
In the first quarter, net bookings increased by 20 percent to $1.20 billion (roughly Rs. 9,936 crore), driven by strong demand for popular titles such as Grand Theft Auto and NBA 2K. Analysts had expected $1.21 billion (roughly Rs. 10,018 crore).
Take-Two reported a 38 percent increase in net bookings from customers making in-game purchases in the quarter ending June 30.
Quarterly ad revenue grew by approximately 11 percent, thanks to improvements in Zynga’s mobile games business.
© Thomson Reuters 2023
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