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Is Take-Two still too reliant on GTA?

Take-Two Interactive, parent company of Rockstar and 2K, has long been accused of relying too heavily on the Grand Theft Auto franchise, and it was a major theme of its latest results call.
Take-Two Interactive, parent company of Rockstar and 2K, has long been accused of relying too heavily on the Grand Theft Auto franchise. Its latest results call was no exception. Before analysts even began their grilling, the implicit message from the company's management -- CEO Strauss Zelnick and president Karl Slatoff -- was that there is much more to Take-Two's lineup. It's not hard to understand why: Grand Theft Auto V drove the company's 2014 results into the stratosphere; at the same time, the lack of any significant new release caused its fourth quarter results to slump. Today, the company announced that GTA V has already shipped over 33 million copies; by contrast, Borderlands 2 -- officially the most successful game for Take-Two's 2K label -- has shipped over 9 million. That's quite a contrast. Zelnick was at pains to point out that the company has changed, if perhaps not fast enough for investors. "Historically, what we've found when we came to the company some years ago, was a company dominated by one franchise..." he said. "In the past seven years, we've launched a multiplicity of franchises."

New IP is coming...

Zelnick promised "a balanced portfolio of franchises year-in, year-out," including "new intellectual properties that we hope will become new franchises." But when questioned, chief financial officer Lainie Goldstein wouldn't discuss what percentage of capital the company had earmarked for new IP development. "Both of our labels work on new and then old franchises all the time," was the best answer the analysts could get. "It's very important to us to be constantly reinvesting in new IP," said Slatoff. "That is a stated objective of our company. We don't feel comfortable sitting on our accomplishments... You've gotta keep the pipeline going, and it's the only way to do it."

But is this really a new story?

Slatoff headed off questions about its plans with typical Take-Two bluster: "We really don't see ourselves as competitive with any other company or any other game, except perhaps in the sports business." "We don't work on double-A titles, we don't work on single-A titles. We only work on triple-A titles," Zelnick said. Looking to the immediate future, though, the company is still dominated by its less-prolific studio. 2K controls its sports games, as well as franchises like Civilization and Borderlands, both of which have upcoming titles, as well as the upcoming Evolve. Still, for fiscal 2015 -- which for Take-Two began on April 1 -- Zelnick said, "We expect Rockstar to account for about 45 percent of the yearly revenue." Zelnick did say that the overall company has "more than 10 unique next-generation titles in development," so there's a lot on the horizon, and not just from Rockstar -- though the developer will release a next-gen title before April 2015, Zelnick revealed.

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