GTA Take-Two Publisher Reports Falling Demand From Pandemic Highs

NBA 2K22 and Grand Theft Auto 5 from Take-Two Interactive Software Inc are on sale at a store in Manhattan, New York City, U.S., February 7, 2022. REUTERS/Andrew Kelly

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May 16 (Reuters) – ‘Grand Theft Auto’ publisher Take-Two Interactive Software (TTWO.O) on Monday became the latest U.S. games company to predict annual sales below estimates as demand begins to plateau in a post-pandemic world.

The return of social life in a re-opening economy and a thin lineup of big game titles herald tougher times for the video game industry as sales slump after hitting dizzying heights during shutdowns.

Rivals Electronic Arts (EA.O) and Activision Blizzard (ATVI.O) also scored a weak quarter, while Roblox Corp (RBLX.N) forecast net losses for the “foreseeable future”. Read more

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“As the return to normal continues, the impact on our business, operations and financial results will depend on many evolving factors that we are unable to predict,” Take-Two said in a statement.

For the full year, Take-Two forecast adjusted sales of $3.75 billion to $3.85 billion, while analysts had expected $3.96 billion, according to Refinitiv IBES data.

The company’s forecast for adjusted sales of $700 million to $750 million in the first quarter is also lower than the estimate of $777.9 million.

However, the forecast did not take into account its pending acquisition of “Farmville” maker Zynga or interest costs related to the deal, which is expected to close in May.

Quarterly net bookings – products and services sold digitally or in-store – rose 8%, driven by flagship titles like ‘NBA 2K22’ and ‘GTA V’ and the new ‘WWE 2K22’, but the figure still fell short the estimates.

Take-Two’s net profit fell to $110.97 million for the fourth quarter ended March 31, from $218.81 million a year earlier.

Excluding items, it earned $1.09 per share, beating estimates of $1.04 per share.

Shares of the company rose 2.5% in extended trading.

Earlier Monday, Saudi Arabia’s Public Investment Fund revealed in a filing that it had more than doubled its stake in Take-Two during the quarter.

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Reporting by Richard Rohan Francis in Bengaluru; Editing by Anil D’Silva and Devika Syamnath

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