The already struggling game industry got some more bad news yesterday after Take-Two Interactive Software reported disappointing financial results for the first quarter of its fiscal year 2013, ended June 30, 2012.
For the first quarter of fiscal 2013, net revenue was $226.1 million, as compared to $334.4 million for the first quarter of fiscal 2012.
Although the strongest contributors to net revenue in the first quarter were the release of Max Payne 3, catalog sales led by the Grand Theft Auto franchise and Red Dead Redemption, the release of Spec Ops: The Line, Take-Two specifically cited "lower-than-anticipated sales of Spec Ops: The Line and Max Payne 3" as the primary reason for not meeting original Q1 expectations.
Despite failing to meet the company's lofty goals, it's hard to call Max Payne 3 a flop. The title has received excellent reviews and has sold over 3 million units to date. In addition to initial sales, Max Payne 3 should continue to generate revenue thanks to a comprehensive downloadable content plan, that starts with the release of Local Justice in July and extends through fall. Take-Two didn't report on the sales of Spec Ops: The Line.
While Take-Two's numbers are surely disappointing, CEO Strauss Zelnick assured the company's outlook for the slate of upcoming releases is "stronger than ever".
"Early consumer enthusiasm suggests robust demand for our extraordinary lineup of upcoming releases, particularly Borderlands 2, NBA 2K13 and BioShock Infinite," Strauss said. "We continue to expect fiscal 2013 to be one of the best years in Take-Two's history."
Strauss added: "Our long-term strategy is to continue to grow our revenues and reduce the volatility of our results by complementing our core console business with digitally delivered content for mobile and online platforms. During the current fiscal year we have made substantial progress, including launching an open beta for NBA 2K Online in China; expanding our lineup of core titles for tablets and smartphones with Max Payne Mobile; releasing our first domestic mobile social game – COMEDY CENTRAL'S Indecision Game; and delivering our first mobile social game for Japan – NBA 2K All Stars."
"While our core console business has faced short-term cyclical headwinds, we remain exceedingly optimistic about our Company's long-term prospects for growth and profitability," Strauss concluded.
Looking forward to the second quarter, Take-Two expects net revenue to land somewhere between $200 to $250 million.
Earlier today, 2K Games, one of Take-Two's labels, announced Jay Z as Executive Producer for NBA 2K13.
