(Bloomberg) — Take-Two Interactive Software Inc. reduced its annual forecast for net bookings in the wake of an industrywide spending slowdown, particularly in mobile gaming. Shares plunged more than 15% in extended trading.
(Bloomberg) — Take-Two Interactive Software Inc. reduced its annual forecast for net bookings in the wake of an industrywide spending slowdown, particularly in mobile gaming. Shares plunged more than 15% in extended trading.
Net bookings, or the net amount of products and services sold globally, will be as much as $5.5 billion for the year ending in March, the company said Monday in a statement. Previously, Take-Two projected as much as $5.9 billion. Analysts, on average, estimated $5.91 billion.
Chief Executive Officer Strauss Zelnick said the company’s outlook was affected by production shifts, the strong dollar and “a more cautious view of the current macroeconomic backdrop, particularly in mobile.” Rival Electronic Arts Inc. said last week it had also been hurt by currency fluctuations.
Zelnick said on a call with investors that in-game purchases such as those in Zynga’s mobile games have taken a hit this year amid the uncertain economy and that the company has delayed some games.
In May, Take-Two closed its $11 billion acquisition of Zynga, the company behind popular mobile franchises such as FarmVille. In the statement, Zelnick said Take-Two is “highly optimistic about the vast, long-term growth potential” for mobile games.
“Despite these headwinds and their effect on our guidance for the year, we remain highly confident in our diverse and extensive development pipeline that we expect will deliver us sequential years of growth and record performance,” he said.
New York-based Take-Two, the parent company of video game publishers 2K Games and Rockstar Games, is known for franchises like BioShock and NBA 2K. Take-Two said its new entry in the annual basketball series, NBA 2K23, which came out in September, has sold almost 5 million units to date.
After a boom during the pandemic, the video game industry has slumped this year due to the economic slowdown and a lack of big hits. Spending on games, hardware and accessories is down 8% through September from last year, according to NPD analyst Mat Piscatella.
The company also reduced its profit forecast for the fiscal year. Earnings, excluding some items, will be as much as $4.10 a share, from a previous outlook of $4.85 a share. Analysts estimated $4.82.
Take-Two shares dropped to a low of $90 in extended trading after closing at $108.40 in New York. The stock has slumped about 40% this year.
Analysts and observers are eager for news on Rockstar’s Grand Theft Auto VI, which hasn’t been officially announced but was teased earlier this year. In September, hours of footage from an early, unfinished version of the game leaked online due to what Rockstar called a “network intrusion.” The previous entry, Grand Theft Auto V, is the second-best-selling game of all time at 170 million copies.
Take-Two will also release a new Marvel game, Midnight Suns, in December, although it does not yet have any major games announced for 2023.
Bookings in the fiscal second-quarter, which ended in September, were $1.5 billion. Analysts, on average, estimated $1.55 billion.
(Updates with CEO comments in the fourth paragraph.)
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