Take-Two released its financial results for Q1 of the 2020 fiscal year (that’s the three months ended June 30th 2019) and reported a 39 per cent revenue increase year-on-year, reaching $540.5m (£440m) compared to $388m (£319.4m) for the same period last year.
Recurrent consumer spending was a big driving force in Take-Two’s good results: they were up 31 per cent year-on-year and represented 58 per cent of the publisher’s net revenue, so that’s $313.49m (£258.2m) for the quarter – that includes “virtual currency, add-on content and in-game purchases,” the report pointed out.
Digital revenue also grew 36 per cent year-on-year, reaching $427.8m (£352.1m), that is to say 78 per cent of the publisher’s overall net revenue. The report said: “ The largest contributors to GAAP digitally-delivered net revenue in fiscal first quarter 2020 were NBA 2K19, Grand Theft Auto Online and Grand Theft Auto V, Red Dead Redemption 2 and Red Dead Online, the Borderlands franchise, Social Point’s mobile offerings, and Sid Meier’s Civilization VI.”
GTA Online will be driving digital revenue even more next quarter, as the release of the Diamond Casino & Resort update in July was “Grand Theft Auto Online’s biggest launch ever, delivering record player engagement in daily active users, weekly active users and monthly active users,” Take-Two reported.
The company’s net income for the three-month period decreased 35.4 per cent year-on-year though, as highlighted in the report: “GAAP net income was $46.3 million (£38.1m), or $0.41 per diluted share, as compared to $71.7 million (£59m), or $0.62 per diluted share, for the comparable period last year.”
However, net bookings (the “net amount of products and services sold digitally or sold-in physically during the period, and includes licensing fees, merchandise, in-game advertising, strategy guides and publisher incentives”) for the period were very healthy, rising 46 per cent year-on-year to $422.2m (£347.5m). Once again, recurrent consumer spending was the driving force of that growth, with bookings from that area increasing 55 per cent year-on-year and representing 67 per cent of total net bookings. Digital meanwhile represented a whopping 91 per cent of total net bookings.
Strauss Zelnick, chairman and CEO of Take-Two, commented: “Fiscal 2020 is off to a terrific start with first quarter operating results that beat our expectations. 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.
“As a result of our better-than-expected first quarter operating results and increased forecast for the balance of the year, we are raising our outlook for fiscal 2020, which is anticipated to be another great year for our organization. We aim to build on this strong start by delivering a robust array of titles throughout the year, including Ancestors: The Humankind Odyssey, NBA 2K20, Borderlands 3, WWE 2K20 and The Outer Worlds, as well as new and innovative ways for consumers to remain engaged with their favorite entertainment experiences.
“Looking ahead, Take-Two has the strongest development pipeline in its history, including sequels from our biggest franchises as well as exciting new IP. 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.”