Monday, December 21, 2009

Take-Two: The Long Decline

Take-Two announced another nasty earnings quarter last week:
As Take-Two warned earlier this month, the company's fourth fiscal quarter results show considerable losses, with a year-end net loss of $137.9 million, down 242 percent year-over-year, and a Q4 net loss of $22.0 million, a loss up 46 percent year-over-year.

Those figures come on net revenues of $968.5 million for the year, down 37 percent year-over-year, and $343.4 million for the quarter, up 6 percent year-over-year.

Earlier this year, Electronic Arts was willing to pay over $25 a share for the company. Today's closing share price? $8.98.

Seemingly, Take-Two is a three game company right now (I'm sure I'm forgetting something)[EDIT: Scott Lewis added Bioshock and Civilization]: Grand Theft Auto, Borderlands (over two million units sold in only a few months), and Carnival Games (a franchise which has sold over five million units worldwide, as impossible as that sounds).

The sports label, in particular, has run aground. College basketball? Cancelled. Hockey? In all likelihood (based on comments made last week), cancelled. Baseball? The day their contract expires with MLB (in 2012, I believe), cancelled. In the meantime, though, MLB2K is a running joke. Basetball? Yes, they still make the best NBA game, and it's the one sports game they seem to actually still care about.

Today, they announced that they're selling their distribution arm to Synnex, which makes sense, because it's apparently no longer part of their "core strategy":
In a period of historically weak consumer confidence -- and as publisher Take-Two is increasing its loss projections for the fiscal year -- Take-Two's chairman Strauss Zelnick believes core, triple-A games remain the industry's best bet.

"The demand for top-tier products is okay. The demand for lower-tier products is not so clear," Zelnick (pictured) said during an analyst conference call attended by Gamasutra today. "The safest place to be is in triple-A."

Good God. They've turned into Activision, too!

So now Activision, EA, and Take-Two are all pursuing identical strategies. Fewer games, and "AAA" means "franchises we can put a shitload of marketing dollars behind."

I can't remember a time when the strategy of the big players in the gaming industry was so monolithic. I'm just counting the days until Take-Two announces their big new franchise: an ultra-realistic modern warfare simulation.

You know that's coming.

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