The ongoing success of Red Dead Redemption 2 and GTA Online has seen not only a strong first quarter of FY2020 for Take-Two Interactive, but raised its full-year guidance by upwards of $200 million.
For the quarter, TTWO brought in net revenue of $540 million, a 39% jump from the same period last year, with net bookings of $422 million, a 46% jump Year-over-Year and significantly more than its previous estimate of $310 million to $360 million. Digitally delivered net bookings was up too, making $382 million for the quarter, a 51% increase from the same period in FY19.
Take-Two’s principal drivers for the quarter were down to the rolling success of Red Dead Redemption 2, which has now shipped 25 million units to retail since its launch last October, as well as NBA 2K19, the Borderlands series, Civilization VI, and GTA Online, which just launched its casino update, though the true effect of that won’t be known until next quarter (but is off to a great start, according to the company on its quarterly conference call, with “record player engagement”).
“Fiscal 2020 is off to a terrific start with first quarter operating results that beat our expectations,” said Take-Two Chairman, Strauss Zelnick, in a press release. “We delivered significant net bookings and cash flow growth driven by the performance of Grand Theft Auto Online and Grand Theft Auto V, NBA 2K19, the Borderlands franchise, and Red Dead Redemption 2 and Red Dead Online.”
In terms of output next quarter, in addition to updates to the Rockstar titles, Take-Two has Panache’s Ancestors: The Humankind Odyssey launching on PC on August 27 (its console launch happens in early December) and Obsidian’s The Outer Worlds on October 22, all launching via Private Division. The label also has Disintegration, the brand-new IP from V1 Interactive (former Bungie creative director and Halo co-creator Marcus Leto) that is set to launch in Take-Two’s FY2021 (calendar 2020). More details will be revealed during gamescom.
Meanwhile, 2K has the launches of NBA 2K20 on September 6, the anticipated Borderlands 3 a week later on September 13, and the October 22 launch of WWE 2K20, officially announced yesterday to have superstars Becky Lynch and Roman Reigns on its cover, as well as feature an emphasis on the company’s ‘women’s revolution’ featuring its core group of women’s wrestlers, The Four Horsewomen (Lynch, Charlotte Flair, Sasha Banks, and Bayley).
In light of such a strong lineup for the next few months, Take-Two has increased its full-year guidance by upwards of up to $200 million. Expecting somewhere between $2.5 billion and $2.6 billion previously, it now expects between $2.6 billion and $2.7 billion for FY20, with net income of $454 million for the year, up $29 million from its previous target of $425 million.
In the company’s conference call, Take-Two CFO Lainie Goldstein cited NBA 2K, Grand Theft Auto Online/Grand Theft Auto V, Borderlands 3, Red Dead Redemption 2/Red Dead Online, The Outer Worlds, and WWE 2K as its key drivers for the remainder of the FY. He added the net bookings breakdown will likely comprise of 60% to 2K Games, 30% to Rockstar Games, and the remaining 10% to Private Division, Social Point and other parts of the company.
“Looking ahead, Take-Two has the strongest development pipeline in its history, including sequels from our biggest franchises as well as exciting new IP,” added Zelnick in his press release remarks. “We are exceedingly well positioned to capitalize on the positive trends in our industry, and to generate significant growth and margin expansion over the long-term.”
The company is in a strong position for the year ahead, especially as TTWO’s fall lineup starts to roll out to consumers.
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