Ultimately, this business is driven by great creativity. In terms of capital flowing into the business, that all depends on where the capital is going. So their cohorts going to continue to grow until it stabilizes and looks like all other entertainment cohorts. “They fell in love with it at the age of 17 for the rest of their life.
Yet people consume the entertainment,” he said. “I’ve been saying for a long time that I expect this sector to grow at a rapid clip for about the next 20 years because the average age of a gamer is still around 37 or 38. I asked Zelnick what the consequences of this would be. That’s more than double last year’s rate. More than $71 billion has been invested in games in the first nine months of 2021 (according to Drake Star), through investments in startups, acquisitions, and public offerings. “And we’re looking for people who value our culture, a culture of creativity, innovation, and efficiency, and also a culture of transparency, honesty, and common decency.” But I wouldn’t say the challenge is anything new, because we’re looking for the brightest and the most creative people,” he said. I asked Zelnick if he was worried about a labor shortage, given the boom in game investments since the pandemic started. Take-Two said it has 7,215 employees now, up from 6,800 in the previous quarter. But the net effect on gaming as people return to normal activities isn’t clear just yet. Some of the offices are open, and the majority will open in the coming months, but the company is studying the dynamics for each region and guidance from local governments and health officials.ĭuring the shelter-in-place orders that began last year, the company saw heightened levels of engagement and bookings during the past year. In the quarterly report, Take-Two said it is being prudent about returning to the office and planning. Recurrent consumer spending, a good measure of loyalty to ongoing games with live operations, increased 7% in the quarter and accounted for 69% of total net bookings. And in certain instances, we don’t have the confidence that something will reach that level of excellence, and therefore we can’t proceed.” We’re trying to build tentpole franchises. We devoted a lot of time and resources to the property. “There’s not much else to say, ultimately. “When we talked about our robust pipeline, over a multi-year period, we did say that certain titles would not make it. Take-Two took a one-time charge against earnings of $53 million for costs of goods sold as a result of a cancellation of a game in development. The company reported GAAP net income of $10.3 million, or 9 cents a share, compared with $99.3 million, or 86 cents a share for the same quarter a year ago. Analysts also expected fiscal Q3 earnings per share of $1.12 on revenues of $950.1 million, and full-year fiscal results of $4.59 a share on revenues of $3.41 billion. About 91% of all GAAP sales were digital.Īnalysts expected Take-Two to report non-GAAP earnings per share of $1.34 on revenues of $866.9 million for the second fiscal quarter ended September 30. We also expect to continue to attract the very best creators who share in our vision to set new benchmarks and captivate audiences throughout the world.”įor the results, the company credited ongoing sales of NBA 2K22 and NBA 2K 21, Grand Theft Auto Online, Grand Theft Auto V, Red Dead Redemption 2, Red Dead Online, Borderlands 3, Two Dots, Sid Meier’s Civilization VI, and Dragon City. “As we continue to harness and enhance our competitive advantages - our incredible creative talent, best-in-class marketing and technology, and strong balance sheet - we will introduce new entertainment experiences that we believe have vast commercial potential and the ability to drive long-term engagement and recurrent consumer spending. “We remain highly optimistic about our ability to capitalize further on the positive trends of our industry,” he said. (Zelnick will be a speaker at our GamesBeat Summit Next online event on November 9-10, in a fireside chat with Mike Vorhaus of Vorhaus Advisers).
“I wouldn’t say that the pandemic is over, I think we’re certainly not seeing that in working conditions, and therefore it’s hard to believe we’re seeing it fully in consumer patterns, but I think we’re close to the new normal,” he said.Īs a result of our better-than-expected second-fiscal-quarter operating results, along with an updated forecast for the balance of the year, Take-Two is raising net bookings guidance for the year to $3.3 billion to $3.4 billion, Zelnick said.
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