Take-Two Records Lossess, Seeks Savings; Marvel's Midnight Suns Flops
The failures of Marvel's Midnight Suns, PGA Tour 2K23 and New Tales from the Borderlands have taken a heavy toll on Take-Two's financial performance. In response, the publisher plans to implement a cost-saving plan.
Take-Two Interactive has released a report with financial results for the third quarter of fiscal year 2023, i.e. the period between October 1, 2022 and December 31, 2022.
Take-Two game results
We were most interested in information about individual games.
- All the big launches of the past quarter, i.e. Marvel's Midnight Suns, PGA Tour 2K23 and New Tales from the Borderlands, proved to be disappointments in terms of sales. However, no specific figures were provided.
- Instead of new releases, the publisher made money mainly from older games, such as NBA 2K23, NBA 2K22, Grand Theft Auto 5 and GTA Online, Empires & Puzzles, Toon Blast, Red Dead Redemption 2 and Red Dead Online, Words With Friends, Merge Dragons and Toy Blast.
- Sales of GTA 5 have already exceeded 175 million copies, and Red Dead Redemption 2 - 50 million. In the case of RDR2 the past quarter saw better results than expected. During this period, 4 million copies of this game were purchased. This was helped by impressive discounts.
- In turn, sales of NBA 2K23 has already reached the ceiling of 8 million copies.
Another failure of a big game licensed by Marvel
It is worth noting that Marvel's Midnight Suns is another failure of a big-budget production set in Marvel's comic book universe. Marvel's Avengers and Marvel's Guardians of the Galaxy were also flops. This shows that this brand is not a ticket to high sales figures, even if the development is entrusted to an experienced developer.
In the case of Marvel's Avengers the failure can still be put down to the quality of the game, but Marvel's Midnight Suns and especially Marvel's Guardians of the Galaxy received very good reviews.
Only Marvel's Spider-Man by Insomniac Games was a success, but this superhero has a long tradition of appearing in popular PC and console games. So we are curious to see how Marvel's Wolverine by the same developer will fare.
Take-Two's finances and announcement of savings
Let's move on to the financials.
- In the past quarter, the company's revenue amounted to $1.41 billion, a 51% increase over the same period last year. Still, this amount is a bit lower than forecasts, which predicted $1.43-1.48 billion.
- Such high revenues, however, did not translate into profits. The company recorded a loss of $153 million.
- By comparison, Take-Two recorded a profit of $144 million in the same quarter last year.
- The company forecasts that for the full fiscal year 2023 (April 1, 2022 - March 31, 2023) it will show losses of $704-721 million and revenues of $5.24-5.29 billion.
According to the company's CEO, Strauss Zelnick, the weaker results in recent months are mainly due to reduced demand in the console market. In addition, he says that recently gamers have been focusing on buying the biggest releases, which benefits the publisher's older games, but has hurt its latest projects.
The company intends to implement a cost-saving plan, which is expected to reduce costs by $50 million. It is possible that this will include cutting some of the staff, but Zelnick stresses that the publisher has no plans for large layoffs.
