Take-Two Interactive Raises Full-Year Outlook on Strong Start for New Game
‘Red Dead Redemption II’ generated $725 million in its first three days on the market last month
Take-Two Interactive Software Inc. TTWO 1.72% on Wednesday reported strong fiscal second-quarter results and raised its full-year outlook on the heels of a monster opening weekend for its latest videogame release.
The company said the fifth installment of its hit franchise “Grand Theft Auto” is still wildly popular, with lifetime sales now exceeding 100 million units, while its basketball-simulation series “NBA 2K” generated record sales during the quarter.
Revenue climbed 11%, to $492.7 million, while net income rose to 22 cents a share from a loss of 3 cents a share. High-margin digital revenue, including full-game downloads and sales of virtual goods, grew 18%, to $358.4 million, the company said.
In addition, net bookings, which exclude deferrals, inched up 1.1% from a year ago to $583.4 million. Take-Two had guided from $500 million to $550 million in net bookings, while analysts were expecting $550 million, according to Refinitiv. Digitally delivered net bookings grew 20% to $426.2 million, Take-Two said.
Looking ahead, Take-Two is now more optimistic about fiscal 2019 after “Red Dead Redemption II” generated $725 million in its first three days on the market last month. By comparison, Walt Disney Co.’s “Avengers: Infinity War” opened to more than $630 million world-wide in April, according to Box Office Mojo, making it the top-selling movie ticket of all time.
In its earnings report, Take-Two also said the new “Red Dead” game has already sold more than 17 million units world-wide. That is more than the original Western shoot-’em-up sold in its first eight years.
The company boosted its outlook for fiscal 2019, saying it now expects net bookings to range from $2.8 billion to $2.9 billion, up from a prior forecast of $2.7 billion to $2.8 billion.
Take-Two is slated later this month to launch “Red Dead Redemption Online,” a free companion to the base game that will sell virtual goods. It is expected to be a significant revenue driver for the company, much like has been the case in recent years for the online version of “Grand Theft Auto.”
On an earnings call with analysts, Take-Two Chief Executive Strauss Zelnick said he doesn’t expect the new “Red Dead” game to chip away at gamers’ interest in “Grand Theft Auto.”
“We do not see any cannibalization, nor do I expect any,” he said.
Write to Sarah E. Needleman at sarah.needleman@wsj.com