Rockstar’s latest now set to arrive fall of 2025 as impairment charges see publisher post $3.74bn net loss
Take-Two today released its financial results for its fourth fiscal quarter, covering the three months ended March 31, narrowing the Grand Theft Auto 6 release window while taking a massive loss thanks largely to goodwill impairment and restructuring charges.
The Q4 numbers
- Net revenue: $1.40 billion (down 3% year-over-year)
- Net loss: $2.9 billion (compared to a $610 million loss in the year-ago quarter)
- Total net bookings: $1.35 billion (down 3% year-over-year)
The full-year numbers
- Net revenue: $5.35 billion (flat year-over-year)
- Net loss: $3.74 billion (compared to a $1.12 million loss in the last fiscal year)
- Total net bookings: $5.33 billion (up 1% year-over-year)
The highlights
When Take-Two reported its fiscal 2023 earnings last year, it took the unusual step of talking about numbers more than a year into the future, saying it expected $8 billion in bookings for fiscal 2025. While it never said it outright, this was largely taken to mean the much-anticipated Grand Theft Auto 6 would launch in the company’s fiscal 2025, which ends March 31, 2025.
Rockstar has indeed announced a 2025 release window for Grand Theft Auto 6, but Take-Two today said that has been narrowed to the fall of 2025, putting it in the publisher’s fiscal 2026.
“We are highly confident that Rockstar Games will deliver an unparalleled entertainment experience, and our expectations for the commercial impact of the title continue to increase,” Take-Two chairman and CEO Strauss Zelnick said in announcing the company’s earnings.
In a briefing call with GamesIndustry.biz around the earnings, Zelnick acknowledged the increasing expectations around Grand Theft Auto 6, but declined to confirm whether those expectations are now larger than those of any other game the company has previously released.
“I couldn’t be more enthusiastic than I am about Grand Theft Auto 6 and everything it can bring to consumers,” Zelnick said. “I couldn’t be more excited, but I’d probably stop short of establishing any expectations. As a practice, we prefer to talk about success after we’ve had it.”
On that note, he pointed out that Grand Theft Auto 5 has now sold in about 200 million units worldwide, and engagement in Grand Theft Auto Online “is higher than we possibly could have expected.”
Take-Two said Grand Theft Auto 5’s audience size grew 35% for the full year, while Grand Theft Auto Online’s audeince grew 23%.
Rockstar’s other big game, Red Dead Redemption 2, has also now sold-in almost 64 million units worldwide.
On the 2K side of things, NBA 2K24 has sold-in 9 million copies, down from 11 million for NBA 2K23 at the same point in its lifespan.
And while it didn’t give sales figures, Take-Two said that WWE 2K24 has been “a resounding success” with the highest Metacritic average for the franchise since Take-Two acquired it, and Borderlands 3 “outpaced our forecasts.”
Take-Two also said Zynga delivered “outstanding” results, with Toon Blast and Match Factory in particular performing well and Rollic passing a cumulative 3.5 billion downloads all-time.
Despite those upsides, Take-Two posted a GAAP net loss of $2.9 billion for the fourth quarter, primarily thanks to $2.18 billion in goodwill impairment charges and another $304.3 million in charges for acquisition-related intangible assets.
Further bringing down the bottom line were $93.3 million in charges because of its third cost-reduction program involving layoffs and restructuring in a little over a year.
When asked why the company needed three cost-cutting programs in such a short span of time, Zelnick gave his reasons for each.
“Anytime you acquire a company of [Zynga’s] scale, you would naturally expect to have integration savings, and we certainly did,” Zelnick said of the first cuts, noting that Take-Two aimed for $100 million in savings with that program and exceeded the goal.
“Thereafter, we looked around and said times are a little tougher than we thought,” he continued. “That was a reflection of post-pandemic consumer behavior being a bit more cautious than perhaps we and others expected.”
That led to the second $50 million cost-reduction program, another target he said the company met.
“Most recently we said we expect to reduce current and expected spending by about $165 million, which will benefit us this year and going forward. And that’s simply a reflection of the fact that as an industry and a company, perhaps we became a little less disciplined.”
He then reiterated the company’s strategy to be the most creative, innovative and efficient company in the entertainment business, saying the programs have been an effort to “put a fine point on efficiency.”
Taking the goodwill impairment and amortization out of the equation, Take-Two reported fourth quarter EBITDA of negative $19.6 million. For the full-year, that would have been positive EBITDA of $272 million.
Amortization of acquired intangibles is likely to dampen the company’s current fiscal year as well, with Take-Two forecasting a net loss in fiscal 2025 between $606 million and $674 million, thanks in large part to a $710 million amortization hit. It would be the third straight year of net losses for the publisher.
The remainder of the outlook numbers for the current fiscal year are a bit better, with revenues between $5.57 billion and $5.67 billion (up 4% to 6%) and bookings between $5.55 billion and $5.65 billion (also up 4% to 6%).
“Looking ahead, we believe that our company is poised to achieve new levels of success, and we expect to deliver sequential growth in Net Bookings for Fiscal 2025, 2026, and 2027,” Zelnick said. “As we deliver our pipeline, we are confident that we will drive our scale, enhance our margins, and deliver industry-leading returns for our shareholders.”
