COVID-19 propels Take-Two to record-breaking revenue in Q1 2021

Today, powerhouse publisher Take-Two Interactive released its financial results for fiscal first quarter 2021, and the numbers show record-breaking increases for net revenue and net bookings. In total, revenue increased by 54% year-over-year for the quarter, to $831.3 million, a number that was achieved thanks to the continued positive impact the ongoing COVID-19 pandemic has had on the games industry.

“Fiscal 2021 is off to a terrific start with first quarter operating results that significantly exceeded our expectations, including fiscal first quarter records for GAAP net revenue and Net Bookings”, Strauss Zelnick, CEO of Take-Two said in the report. “Our extraordinary results were driven primarily by the outperformance of NBA 2K20, Grand Theft Auto V and Grand Theft Auto Online, Red Dead Redemption 2 and Red Dead Online, and Social Point’s mobile games.”

Also contributing to these impressive numbers were Borderlands 3, the WWE 2K series, and Civilization VI. Over the last couple of years, Civ VI has taken on more of a live-service form, and has received a number of paid updates and DLC. In May, Firaxis revealed the New Frontiers pass, which gives the perennial strategy game at least another year’s worth of new content. 

Regarding the impact of COVID-19, the games industry at large has seen an enormous boost to revenue that analytics provider Newzoo estimates will propel the market past $159 billion this year. As a result, many AAA publishers, including Take-Two, have upped their guidance for the remainder of the fiscal year: the company estimates that it will hit between $750 million and $800 million next quarter, and $2.8 billion to $2.9 billion for the full fiscal year ending March 31, 2021.

Looking forward, Take-Two has a number of games on the horizon that are sure to heavily factory into future financial reports. Announced games include PGA Tour 2K21, NBA 2K21, WWE 2K Battlegrounds, Mafia: Definitive Edition, and Kerbal Space Program 2. The latter is to be published by Private Division, a Take-Two label that has been quietly increasing its foothold in the indie sector.

Historically, one of Take-Two’s most prominent revenue streams has been NBA 2K. The series is at the top of the sales charts on a monthly basis, and commands so much attention that the news of a $70 price tag for next-gen versions caused waves of speculation within the industry. According to analyst David Cole, such a potential price shift is long overdue.

“It’s been $59.99 since I started in this business, but the cost of games have gone up ten times,” Cole told GameDaily last month. “If you don’t have elasticity on the price point, but you have huge volatility on the cost line, the model becomes more difficult. I think this generation is going to see those two imperatives collide.”

Whatever the price for NBA 2K21 is, you can be certain that it will do gangbusters in terms of sales numbers. 

In all, Take-Two record-breaking quarter is at the same time surprising and expected. The short-term impact of COVID-19 on the games market has become a known factor, but it’s still shocking to see just how large an effect the pandemic is having. A 54% year-over-year rise in revenue is an enormous number, especially for a prominent AAA publisher like Take-Two. The long-term impact of COVID-19 remains an unknown variable, but for now the games business has never been more profitable.