Take-Two Interactive, the parent company of Rockstar Games and 2K Games, reported earnings for its fiscal third quarter ended December 31, 2017. It’s good times for the company, as it posted gains for revenue, while GTA V‘s online mode continued to make a lot of money.
During the holiday season, GTA Online and NBA 2K18 set records for “recurrent consumer spending.” This is Take-Two’s terminology to describe revenue from microtransactions, subscriptions, DLC, and other forms of digital content.
Take-Two CFO Lainie Goldstein said during an earnings call that the company is committed to recurrent consumer spending. The goal for the company, as it has stated for years now, is to have all of its games feature microtransactions in some form. This would also include Red Dead Redemption 2, though no specific details on how microtransactions may be featured in that game have been announced.
Regarding microtransactions in general, Take-Two CEO Strauss Zelnick said, “We’re focused on players, not payers.” Giving people great content for free is part of what is making GTA Online so successful, he added. Zelnick went on to say that when you create compelling content, “the monetisation will take care of itself.”
Additionally, GTA V the base game continues to see “robust ongoing sales,” which is remarkable given that the title originally launched back in 2013. GTA V has shipped more than 90 million copies, Take-Two announced today, making it one of the most commercially successful games ever in the United States.
In December 2017, GTA Online set a new player record. More people played GTA Online during the month than ever before in the game’s history, Take-Two said. The game is enduringly successful, Take-Two said, due in part to Rockstar’s commitment to regularly releasing new and engaging content such as the Doomsday Heist and content themed around Halloween and Christmas.
Take-Two CEO Strauss Zelnick at one time referred to GTA Online as “the gift that keeps on giving” as it relates to the money it makes from the game’s microtransactions.
Given the massive success of GTA Online, it stands to reason that Rockstar’s next big game, this October’s Red Dead Redemption 2, may offer something similar. All that we know for sure, however, is that the western will have a “brand-new online multiplayer experience.”
Take-Two’s net revenue for the quarter was $480.8 million, up from $476.5 million during the same period last year. Revenue from recurrent consumer spending jumped by 64 percent year-over-year and made up 32 percent of Take-Two’s total net revenue. Unsurprisingly, GTA Online was called out as one of the main contributors.
Take-Two’s profit for the quarter was $25.1 million, which is down from $29.8 million during the same period last year. Similar to many other companies, Take-Two incurred an tax expense related to Trump’s Tax Cuts and Jobs Act, which was enacted on December 22. Take-Two’s expense for this was $11.9 million, so the company would have made a profit instead of a loss under normal circumstances.
During an earnings call, Take-Two shared some further details on the company’s performance during the quarter. Here are some takeaways:
- NBA 2K18 has sold 8 million copies and is expected to become 2K’s best-selling sports game ever.
- Management said the WWE brand remains popular so there is an opportunity in the future to release more games. However, Take-Two did not share a sales number for WWE 2K8.
- Take-Two reaffirmed that a “highly anticipated new title from one of 2K’s biggest franchises” is still on the way. This is likely a reference to Borderlands 3.
- Take-Two has been impressed with the success of the Switch so far. The company will consider bringing more titles to it where it makes sense.
More to come…