Take 2 Financial Outlook
December 5th, 2009
Take 2 have recently posted their 4th quarter financial estimates, lowering guidance expectations.
The main reason given for this is the poor retail success of Major League Baseball in the US, knocking $25 million off revenue forecasts. Revised revenue expectations are now $950m – $975m, down from $975m – $1,000m. The company now expects to make a loss of $1.10 – $1.15 per share.
Comments from the company include:
“We continue to pursue a strategy of building a select, diverse portfolio of top quality titles and to invest our resources in the most promising products and most compelling market opportunities. The industry is a hits-driven business, and our creative and financial resources are dedicated to making great games. Our focus going forward will be on executing better on this strategy in order to drive improved results. Toward that end, we are continuing to work on maximising the efficiency of our development process and exploring additional ways to reduce costs throughout our organization while maintaining the investment required for future growth.”
- Ben Feder, CEO
I have to say I agree here, Take 2 have always chased the hit. Following the strategy of investing big in a smaller number of titles and hoping for that big game that brings in the profits. Usually this will be in the form of Grand Theft Auto, but other games can bring in a good profit too.
The failure of Major League Baseball will be a blow, but not unsurmountable. Take 2 have 2 of the top titles coming out in early 2010 in Bioshock 2 and Red Dead Redemption both of which should (I’d hope!) be sales successes. Add in the fact that there will be more Grand Theft Auto releases and you’d have to say that things aren’t that bad for the company.
