Take-Two Interactive focuses on cost savings without employee layoffs

In a recent financial report, Take-Two Interactive, the publisher of the popular game “Grand Theft Auto,” has shared its plans to implement “significant” cost savings measures following a mixed financial performance in the October-December 2023 quarter. However, the company’s management has stated that employee layoffs are not the primary solution for achieving these savings.

Take-Two Interactive, under the leadership of Strauss Zelnick, the CEO of the company, has announced its intention to optimize various expenses without reducing their workforce. Zelnick mentioned in an interview with Variety magazine that marketing is the most significant expense in their budget, and they aim to streamline costs in areas such as marketing, third-party services, and supplier fees. The company aims to uphold its reputation as the most efficient firm in the entertainment industry.

Analysts from LSEG (formerly Refinitiv) have provided their predictions for Wall Street analysts, expecting earnings per share (EPS) of $0.72 with net revenue of $1.34 billion for the latest quarter. However, Take-Two reported a net loss of $0.54 per share with net revenue of $1.34 billion.

In a letter addressed to shareholders accompanying the quarterly results, Take-Two disclosed that they are revising their net revenue forecasts for the remainder of the 2024 fiscal year, ending on March 31, to be between $5.25 billion and $5.3 billion. To achieve this, the company is working on a significant cost reduction program across all areas of its operations while simultaneously investing in development.

Furthermore, the letter provided anticipated release dates for upcoming games, including the highly anticipated “Grand Theft Auto 6” by Rockstar Games, which is currently scheduled for release in 2025.

However, speculation surrounding long-term financial forecasts suggests that “GTA 6” may premiere between January and March 2025.

During the financial results conference, Strauss Zelnick addressed inquiries about the release date of “GTA 6” beyond 2025, stating that the company aims for excellence and once they achieve optimization, they will be ready to release the game.

Lainie Goldstein, the Chief Financial Officer of Take-Two, emphasized that the financials for 2025 are still being finalized and will not be published until May. Currently, the projected net revenue for the 2025 fiscal year stands slightly above $7 billion, taking into account typical changes and adjustments in forecasts. The company’s game development teams are excelling, and there have been no significant changes to the intrinsic value of their portfolio. The preliminary forecast for the 2025 fiscal year will be presented during the report of the fourth-quarter results in early May.

Take-Two’s shares closed at $169.60 per share during Thursday’s trading session, with the price dropping over 10% after hours. Regular U.S. stock markets will open again on Friday at 9:30 AM ET.