Take-Two Interactive has released its third-quarter earnings report, showing that net losses are up, and the company hasn’t met its revenue forecasts.
Predictably, the company downgraded its full-year predictions as a result. Take-Two predicted a revenue range between $1.43 and $1.48 billion for Q3 2023, it ended up earning $1.41 billion. Take-Two’s net loss for Q3 2023 was $153 million. During the same period of the last fiscal year, it had a net profit of $144 million (via GamesIndustry.biz).
As a result of the publisher’s declining financial performance, a cost reduction program was announced. As Take-Two put it, “...the Company is implementing a cost reduction program expected to yield over $50 million of annual savings, which it will begin to realise in the fiscal year of its Fourth Quarter 2023.”
Notably, the report makes mention of the program comprising “personnel, processes, infrastructure, and other areas, primarily [focusing] on corporate and publishing functions.” The inclusion of the word personnel tends to mean layoffs.
In an interview with GamesIndustry, Take-Two's chief executive officer Strauss Zelnick has denied the company will be experiencing a significant amount of layoffs, saying “We continue to support and build our development teams, and where we have overhead, we have to be very diligent about looking at the overhead.”
Zelnick continued, “We don’t expect any kind of broad-based reduction in force. We are going department by department and trying to drive efficiency.”
Zelnick praised the performance of the company’s development studios, pointing out that new releases have been performing critically, if not commercially. He believes the blame lies with the market, saying there is reduced consumer demand, particularly for console products.
Take-Two’s biggest releases for this quarter were New Tales from the Borderlands, Marvel’s Midnight Suns and PGA Tour 2K23. However, none of these releases were considered large earners for Take-Two.