The company expects the label to make 15 per cent of its total FY revenues for 2008, and make a loss despite previously predicting a profitable performance from the portfolio.
In an earnings call to investors following the announcement of its Q2 results, Take Two’s CFO Lainie Goldstein revealed:
“While we have previously expected 2K Sports to turn profitable in fiscal 2008, we are currently forecasting a loss in our sports business.”
Company executive chairman Strauss Zelnick added:
“On the sports side, the primary reasons for our lack of profitability were lower attach rates than we expected on the increased installed base of Xbox 360 and PS3 hardware, and we made some changes in the release schedule that obviously reduced the revenue a bit.
“I think you asked how serious is it and the answer is you know, we take our job seriously across the board. As I said earlier, this was a work in progress. We are committed to the sports business and we feel like we are going to get there and we are disappointed that we haven’t gotten across the finish this year.
“We are keeping focused on doing just that. How are we going to do it? Continuing to make the best titles in the business that rate better than the competition head to head. I think we have the best developers in the business and I believe we can continue to do that.”
PICTURE: NBA 2K8 (2K Sports)