Take Two: Baseball licence is "big burden"
Focus will remain on triple A titles says publisher, following lowered profit forecast
Take Two's Major League Baseball contract is a "big burden" on the company, CEO Ben Feder has told investors. However by concentrating on triple A releases and increasing efficiency in the development process, the company hopes to increase future profits.
"The safest place to be is in triple A," said Take Two chairman Strauss Zelnick in a call that followed the company's release of a revised and lowered profit forecast for 2009.
"We firmly believe our strategy of focusing on a select, diverse roster of the highest quality titles is the best course of action."
Although predicting the retail environment would remain challenging in 2010, Feder said Take Two was in a "hits driven business" and that Bioshock and Red Dead Redemption are hoped to be key retail events next year.
Continued losses are expected from the MLB business however, with a net loss in fiscal 2010 in the range of USD 30-35 million predicted. The date at which Take Two can get out of that contract is still under discussion, it was added.
On top of the poor performance of its latest MLB game, sales across its key holiday releases were lower than predicted, said Feder.
Thanksgiving sales had been "a little bit on the soft side", and sales that had been made were on a highly promotional basis, he added.
Strategies being put into place to improve profitability would include working on improving consistency in meeting release dates and managing production costs. More efficient business practices needed to be built into the development process without sacrificing creativity, quality and innovation, said Feder.