Take-Two Interactive Software has provided a second-quarter net bookings forecast that falls below the expectations of Wall Street. This indicates that spending on games is facing pressure due to inflationary factors.
According to data from gaming research firm Circana, spending on videogame content, including new games and character skins, remained stagnant in the first half of the year, while console sales saw a 23 percent increase.
In the previous fiscal year, Take-Two incurred costs of $79 million (approximately Rs. 654 crore) related to unreleased and cancelled titles. The company has decided to cancel “several titles” within its fiscal 2026 pipeline to focus on games with higher potential for success.
The videogame publisher has forecasted net bookings for the September quarter, expecting the range to be between $1.4 billion (roughly Rs. 11,593 crore) and $1.45 billion (roughly Rs. 12,000 crore). However, the mid-point of this range falls below the average estimate of $1.45 billion from analysts, according to Refinitiv data.
Despite this forecast, CEO Strauss Zelnick remains optimistic, stating that the company expects to be in a “reasonably good position from an economic point of view” early next year, suggesting an improvement in demand.
Take-Two has reconfirmed its net bookings forecast for the fiscal year ending March 2024. The company is confident that it will experience a “significant inflection point” in fiscal 2025, with net bookings expected to exceed $8 billion (roughly Rs. 66,242 crore).
Analysts and investors anticipate that this positive boost will come from the highly anticipated game: Grand Theft Auto 6.
“For investors, the focus is more on Take-Two maintaining their guidance,” commented Wedbush Securities analyst Nick McKay.
After the announcement, Take-Two’s shares rose 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 the company’s well-established gaming titles like Grand Theft Auto and NBA 2K. Analysts had expected a figure of $1.21 billion (roughly Rs. 10,018 crore).
Take-Two reported a 38 percent rise in net bookings from customers making in-game purchases during the quarter that ended on June 30.
Furthermore, the company experienced an approximately 11 percent growth in quarterly ad revenue, attributed to improvements in Zynga’s mobile games business.
© Thomson Reuters 2023
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