Take-Two reports heavy second quarter losses

Take-Two Interactive has released its financial results for the second quarter ended April 30th, revealing an increase in revenues but an overall loss of USD 50.4 million as cost-cutting exercises continue.

Net revenues for the quarter were posted at USD 265.1 million, up from USD 222.1 million in 2005 and assisted by an increase in the number of co-published titles such as Bethesda's Elder Scrolls IV: Oblivion.

However, net loss for the period was USD 50.4 million (compared to a net loss of USD 8.2 million in the same period last year), which includes a charge of USD 26.3 million for asset write-offs and studio closures as the publisher continues its restructuring and cost-saving plans.

In addition to the inevitable drop in revenues compared to last year, when the company relied heavily on sales of GTA: San Andreas, Take-Two has cited a soft US and European market and significantly lower margins from co-published titles as major factors in the disappointing results.

The publisher expects further costs of USD 3 million in the third quarter relating to the closure of yet another, as yet un-named development studio, and USD 3 million in the aggregate during the third and fourth quarters as a result of its internal publishing headquarters being relocated to Geneva.

Highlights for the second quarter include strong performances from Bethesda's Oblivion, sports titles Major League Baseball 2K6 and Top Spin 2, and positive sales of Rockstar's Grand Theft Auto: Liberty City Stories for Sony's PSP handheld.

Paul Eibeler, President and CEO, commented: "While near-term financial results continue to be impacted by the console transition, we are confident that we have positioned Take-Two for the long-term by streamlining our organization while maintaining an extremely talented global development team."

"We will continue to focus on creating compelling content, operating in a cost-efficient manner as we navigate the console transition, and aligning our resources to drive improved financial performance in 2007 and beyond," he added.

Looking ahead, the publisher is continuing to strengthen its co-publishing deals as well as producing various new titles in its sports range and developing additional games for the Grand Theft Auto series, anticipating a return to profitability during the fourth quarter of fiscal 2006.