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Take-Two "on a path to consistent profitability"

Tue 14 Dec 2010 9:10am GMT / 4:10am EST / 1:10am PST
BusinessPublishing

NBA 2K11 does business in Q4, no GTA announcement until middle of next year

After years of doubting that Take-Two can be successful without a Grand Theft Auto release, analysts are beginning to back the publisher for long term profitability.

Expectations are that the company will beat estimates when it announces fourth quarter results on Thursday, as sales for the publisher are up 50 per cent on last year, primarily do to the performance of NBA 2K11.

Wedbush Morgan estimates Take-Two's latest basketball title sold around 1.9 million units this quarter and benefited from rival Electronic Arts cancelling NBA Elite 11 - with those numbers the publisher is expected to beat revenues of $325 million.

"The company appears to be on a path to consistent profitability, and we are becoming more constructive," wrote the analyst firm.

"Red Dead Redemption presents a difficult comparison for next year, and we believe that without a GTA release, the company will generate only a modest profit in its new financial year.

"We are confident that Take-Two will release GTA in either 2011 or 2012 and BioShock Infinite in 2012, and think the company can generate sustainable earnings growth in each year if the timing of releases is right."

Earlier this year Take-Two shuffled its financial calendar, moving its fiscal year end from October to March.

This move will provide it with more time before announcing a date for the next Grand Theft Auto release, according to Wedbush, with the game expected before the current contracts with Rockstar employees run out in February 2012.

"The change in fiscal year avoids the dilemma about announcing GTA, as management will not provide FY:12 guidance until May or June 2011. While we remain confident that GTA is on track for release prior to the expiration of key employee contracts in February 2012, the company will likely wait to announce the game until midyear, either with its March earnings or at E3 in June."

4 Comments

Graham Simpson Tea boy, Collins Stewart

219 7 0.0
Does the World really need another GTA. Just more of the same.

Posted:3 years ago

#1

Jason Chen Localization Manager, Gamania Digital Entertainment

7 0 0.0
It is an American thing.... but really, why make another same game when you can just expand the game content! GO DLC-fully loaded!

Posted:3 years ago

#2

Andrew Goodchild Studying development, Train2Game

1,254 421 0.3
@ Graham. I'd say a lot of people do want more GTA. If you think it has had it's day, and don't want any more of it, you can quite easily not buy it, and leave it for the people who do.

I hope 2K do start making money every year, they are probably the most interesting mainstream publisher, with an emphaais on quality, although Bethesda do seem to be gunning for their crown.

Posted:3 years ago

#3

James Ingrams Writer

215 85 0.4
I am not so sure that gamers want hardly any more 'modern games' The Take Two Basketball game moving just 1.9 million units when EA's title was cancelled, proves this. Certainly 1.9 million sales means little or no actual profit, even while making gross turnover look good.

I think the success of sites like GOG.com, and the huge number of retro games sold via impulse and steam etc, show how more and more gamers are going back to their older, more entertaining games. Add the 5+ million DOSBox downloads and the growth in the indie market and I think it easy to see gamers are fed up with pretty graphics but little gameplay. After all, what is the difference between a Mass Effect 2, Bioshock 2 and the new X-Com shooter? Very little I would suggest?

So with AAA games costing $30 million plus, I believe we are at a crossroads for the gaming industry that demands change. The choice is further stagnation and lower sales or a renaissance in gaming with innovation and gameplay being at the forefront and games being brought to market for closer to $10 million rather than $30. After all, European publishers, with games like STALKER, Sacred, Metro 2033 and the Divinity series were all brought to market for under $10 million, meaning they could sell to niche markets that the big publishers are not interested in and actually make a good profit! The Wither, for example, has sold more copies on PC (it was PC only) than either Mass Effect, Bioshock or Fallout 3 did on he PC format!

Posted:3 years ago

#4

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