Take-Two Interactive has lowered its outlook for the current fiscal year after consolidated third-quarter net bookings fell by 3 percent year-on-year to $1.34 billion.
The Grand Theft Auto publisher noted that recurrent consumer spending also decreased by 7 percent year-on-year, although it still accounted for 75 percent of the company's total net bookings.
Company CFO Lainie Goldstein said that drop was driven by a "weakness in mobile advertising" and lower unit sales negatively impacting spending in NBA 2K24. Recurrent consumer spending in Grand Theft Auto Online, however, actually increased and GTA+ membership also rose.
Take-Two said Grand Theft Auto V continues to exceed expectations and sold another 5 million copies during Q3 to hit 195 million lifetime sales.
"Momentum for Grand Theft Auto remains phenomenal," said the company. "The Grand Theft Auto series is also benefiting meaningfully from excitement surrounding Rockstar’s announcement of Grand Theft Auto VI and the release of its first trailer, which at 93 million views in 24 hours, broke YouTube’s records for a non-music video launch and along with partner channels, became the biggest video debut ever."
Take-Two also described its decision to launch the GTA Trilogy though Netflix Games as a "resounding success," and said the title quickly delivered the highest rate of installs and engagement on the company's subscription platform.
Rockstar's other mega-hit, Read Dead Redemption 2, has become another mainstay for Take-Two and has now sold-in over 61 million units worldwide.
Take-Two said it "significantly expanded" its headcount during 2023 and now employs 8,894 people. It's a huge number, but one that takes into account the company's 2023 acquisition of mobile powerhouse Zynga.
The company also insists it's investing for future growth with the 2025 launch of GTA VI slowing coming into view, but now intends to implement a "significant cost reduction program" across its entire business.
"These measures are incremental to, and more robust than, our prior cost reduction program, and we aim to achieve greater operating leverage as we roll out our outstanding release schedule," said Take-Two CEO Strauss Zelnick.
"We have always managed Take-Two for the long-term. Our company's potential is vast and unique, driven by our creative talent, our owned and controlled IP, and our groundbreaking pipeline for fiscal 2025 and beyond. As we focus on our strategic priorities, we are confident that we will grow our net bookings, enhance our profitability, and continue to deliver value for our shareholders.”
Take-Two's previous cost reduction program saw the company make layoffs within its publishing subsidiary, Private Division. This time around, Zelnick has indicated the company will try to avoid cutting jobs. Speaking to IGN, he said the program will aim to shrink marketing expenditure.
"We haven't put any meat on the bones of that yet," he said. "I would just note that our biggest line item of expense is actually marketing. We do think we can optimize that. We also have third-party expenses, software, other vendors, supply services. And we always find opportunity there. The hardest thing to do is to lay off colleagues, and we have no current plans."
Despite those assurances, there have been reports of layoffs Visual Concepts Austin, which is owned by Take-Two through its 2K Games subsidiary.
Game Developer has reached out to Take-Two for comment on those job cuts.
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