Take-Two Interactive Software became the latest US gaming company to forecast lower-than-expected annual sales, as demand in a post-pandemic world begins to plateau.
“Grand Theft Auto” publisher Take-Two Interactive Software on Monday became the latest US gaming company to forecast annual sales below estimates, as demand in a post-pandemic world begins to plateau.
The return of social life in a reopening economy and a thin lineup of big gaming titles heralds tough times for the video-gaming industry as sales calm from dizzying heights during the lockdown.
Rivals Electronic Arts and Activision Blizzard also marked a weak quarter, while Roblox Corp forecast a net loss for the “foreseeable future.”
“As a return to normalcy continues, the impact on our business, operating and financial results will depend on a number of emerging factors that we cannot anticipate,” Take-Two said in a statement.
For the full year, Take-Two expects adjusted sales of $3.75 billion to $3.85 billion, according to data from Refinitiv IBES, compared to analysts’ expectation of $3.96 billion.
The company’s forecast for first-quarter adjusted sales of $700 million to $750 million also came in below estimates of $777.9 million.
However, the forecast didn’t factor in interest costs related to the pending acquisition of “FarmVille” maker Zynga or the deal, which is expected to close in May.
Quarterly net bookings – products and services sold digitally or in stores – increased 8%, thanks to major titles such as “NBA 2K22” and “GTA V” and the new “WWE 2K22”, but This figure still missed estimates.
Take-Two’s net income fell to $110.97 million for the fourth quarter ended March 31, from $218.81 million a year ago.
Excluding commodities, it earned $1.09 per share, beating estimates of $1.09 per share.
Shares of the company rose 2.5% in extended trading.
Earlier on Monday, the Saudi Public Investment Fund disclosed in a filing that it more than doubled its stake in Take-Two during the quarter.
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