Take-Two Adjusts Financial Guidance
INDUSTRY NEWS posted on 14 JUL 2009 by Jim Zabek
Delay of Bioshock 2 into the 2010 fiscal year has caused Take-Two to revise its financial guidance.
Take-Two Interactive Software, Inc. (NASDAQ:TTWO) today announced revised revenue and earnings guidance for fiscal 2009.
Take-Two is reducing its fiscal 2009 guidance to reflect several factors, most significant of which is the movement of the launch of BioShock 2 from the fourth quarter of fiscal 2009 to fiscal 2010, in order to provide additional development time for the title. Additionally, Take-Two is updating third quarter and fourth quarter fiscal 2009 guidance to reflect reduced sales of catalog products and lower than anticipated initial retailer orders of new releases, due to a retail environment that is proving even more challenging than the Company’s previous expectations.
Strauss Zelnick, Chairman of Take-Two, stated, “We recognize that our revised outlook for the balance of fiscal year 2009, due to both internal and external factors, is a disappointment. That said, we concluded that moving the release of BioShock 2 into fiscal year 2010 was the right decision for the product. We believe the result will be a more compelling consumer experience and a better performing product in the marketplace. At the same time, near term retail conditions have proven to be more challenging for our business than the assumptions built into our prior outlook. We remain confident in the long term potential for Take-Two’s business, and our ability to capitalize on that potential through our exceptional creative talent and solid balance sheet.”
Ben Feder, Chief Executive Officer of Take-Two, commented, “The decision to shift a release date is never an easy one, especially with a product as highly anticipated as BioShock 2. We felt that it was essential to invest the additional time to ensure that this title will deliver what its fans expect and deserve. As a result, we will now be launching sequels to several of our strongest franchises - including BioShock 2, Mafia II, Max Payne 3 and Red Dead Redemption - during the next fiscal year. These titles will anchor our lineup for fiscal 2010, and along with other products planned for next year, provide a platform for enhanced financial performance in what we hope will be an improved retail environment.”
Based on preliminary estimates, the Company is providing revised guidance in the above image.
(a) The Company's stock-based compensation expense for the third and fourth quarters and fiscal year 2009 includes the cost of approximately 2 million stock options and 1.5 million shares previously issued to ZelnickMedia that are subject to variable accounting. Actual expense to be recorded in connection with these options and shares is dependent upon several factors, including future changes in Take-Two's stock price.
Key assumptions and dependencies underlying the Company’s guidance include timely delivery of titles; continued consumer acceptance of the Xbox 360® video game and entertainment system from Microsoft, PLAYSTATION®3 computer entertainment system and Wii™ system from Nintendo; and the ability to develop and publish products that capture market share for these current generation systems while continuing to leverage opportunities on certain prior generation platforms.
Conference Call
Take-Two will host a 20-minute conference call today at 4:45 pm Eastern Time to discuss this news. The call can be accessed by dialing (877) 407-0984 or (201) 689-8577. A live, listen-only webcast of the call will be available by visiting http://ir.take2games.com and a replay will be available following the call at the same location.
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