“Grand Theft Auto” publisher Take-Two Interactive is working on an “significant” cost reduction plan following mixed earnings results for its October-December 2023 quarter on Thursday, but leadership says it is not looking to workforce cuts as its first resort in savings.
“We have no current plans for layoffs,” Take-Two CEO Strauss Zelnick told Variety following the video game company’s earnings call. “Our biggest line item expense was marketing, so we do have the opportunity to optimize many expenses that don’t involve our headcount: marketing and third party expenses, vendor charges, and the like, can still be optimized. We’re a big company, so we have always prided ourselves on being the most efficient company in the entertainment business.”
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Wall Street forecast earnings per share (EPS) of 72 cents on $1.34 billion in net bookings for Take-Two’s most recent quarter, according to analyst consensus data provided by LSEG, formerly Refinitiv. Take-Two reported a net loss of 54 cents per share on $1.34 billion in net bookings.
In a letter to shareholders accompanying the quarterly results, Take-Two said it is revising its net bookings forecast for the rest of its fiscal year 2024, which ends March 31, to between $5.25 to $5.3 billion and “currently working on a significant cost reduction program across our entire business to maximize our margins, while still investing for growth.”
Also in the letter, Take-Two listed projected release dates for its upcoming titles, including Rockstar Games’ eagerly anticipated “Grand Theft Auto 6,” which is currently slated as a “Calendar 2025” launch.
Take-Two’s fiscal year 2025 runs from April 1, 2024-March 31, 2025. Based on alleged leaked longterm financial projections, recent rumors have targeted January-March 2025 as a likely launch for “GTA 6.”
Strauss shot down any further narrowing of “GTA 6’s” release date beyond 2025 on an earnings call with analysts Thursday, saying: “We’re seeking perfection and when we’ve optimized, that’s the time to release.”
Additionally, Take-Two CFO Lainie Goldstein noted that financials are not finalized for fiscal 2025, and those numbers will not be released until May: “We are currently in the middle of our budgeting process. At this time, the number is tracking a little above $7 billion for Net Bookings in FY25, given the typical shifts and tweaks that occur in our forecasting. Our pipeline is groundbreaking for next year and beyond, and our teams are making excellent progress on game development. Nothing material has changed with regard to the lifetime value of our portfolio. We will provide our initial outlook for FY25 when we report our Q4/FY24 results in May.”
Take-Two stock closed Thursday at $169.60 per share and was down more than 10% in afterhours trading Thursday. The regular U.S. stock markets will reopen at 9:30 a.m. ET Friday.
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