As Take-Two warned earlier this month
, the company's fourth fiscal quarter results show considerable losses, with a year-end net loss of $137.9 million, down 242 percent year-over-year, and a Q4 net loss of $22.0 million, a loss up 46 percent year-over-year.
Those figures come on net revenues of $968.5 million for the year, down 37 percent year-over-year, and $343.4 million for the quarter, up 6 percent year-over-year. Take-Two had projected year-end net revenue of $950 million to $975 million, and today's figures bear our that estimate.
Take-Two's revenue from this past quarter make up 35 percent of its revenue for the year; the company points to Borderlands, NBA 2K10,
the Grand Theft Auto IV
episodes, and Grand Theft Auto IV
itself as key revenue drivers for the period.
The company says that on a non-GAAP basis -- not adhering to certain logistical accounting standards -- it actually saw fourth quarter net profits of $7.0 million. However, it's still in the red on a non-GAAP yearly basis, with a net loss of $85.7 million. Take-Two's non-GAAP figures exclude reorganization and stock compensation expenses, as well as various other fees.
Alongside the results, Take-Two chairman Strauss Zelnick called the company's outlook "disappointing" in part due to "a very difficult economic environment" but said its plans for 2010 "reflect a prudent approach to managing our business."
"The fact remains that Take-Two is in a fundamentally strong position to build long term value," Zelnick said. "We have an outstanding portfolio of hit franchises based largely on internally developed and owned intellectual property, a team of extraordinarily creative and talented people, opportunities to extend our business to new media and markets, and the financial resources to support our strategies."
In an analyst conference call following the results announcement, Take-Two chairman Strauss Zelnick addressed the current depressed consumer market, and offered thoughts on what could be bright spots in what may still be a challenging 2010.
"There are plenty of consumer industries having a much harder time than entertainment," Zelnick pointed out. "This has been a very challenging time for the consumer, and a lot of people are having a very hard time."
"What will change things?" he asked. Echoing frequent publisher demands, he answered: "Pricing the hardware lower. It gets more hardware into people's hands, improves penetration, and gives us a bigger base on which to sell."
"Innovation" also drives revenue, Zelnick said, pointing to "Natal and the other controllers" from Microsoft and Sony. "Anything that makes consumers more excited for the system makes them more compelled to buy product," he went on.
Finally, "Any hit product is always good for an entertainment industry because it creates foot traffic," he said. "The most important thing is creating good titles, coming out with them in a timely fashion, and marketing them well. The execution is not only Take-Two's issue, it's other publishers' issue as well."
Later in the call, Zelnick as well as CEO Ben Feder addressed the social gaming sphere. Both executives acknowledged the increasing importance of the segment, but said they have seen no indication that its growth is infringing on Take-Two's more core-oriented market.
Social gaming "hasn't escaped our attention," Zelnick said, commenting that in entertainment industries, new segments frequently are additive rather than cannibalizing existing entertainment segments.
"We're looking at it closely, but we believe in the near- and medium- term that the core gamer is still very focused on [larger-scale games]," Feder added.]
: The company's financial results also revealed that the Gearbox-developed, 2K-published console FPS/RPG Borderlands
"has now sold over 2 million units worldwide and has established itself as a key franchise for Take-Two, for which the Company has long-term publishing rights." Elsewhere, the Carnival Games
franchise from 2K Play's Cat Daddy Games studio has now sold over 5 million units worldwide on the Wii and DS.]