Take Two's Evolve: Scathing Reviews And Sub-Par Sales
Kevin Hess • 12 Comments
Kevin Hess • 12 Comments
Feb. 3, 2015, 5:37 PM
Feb. 3, 2015, 4:30 PM
- Take-Two's (NASDAQ:TTWO) digitally-delivered content sales rose 64% Y/Y in FQ2 to $217.2M (23% of total revenue). Recurrent revenue streams such as virtual currency, downloadable add-on content, and online games (heavily linked to Grand Theft Auto V) were up 23%, and made up 36% of digital revenue.
- For seasonally weak FQ4, Take-Two expects revenue of $410M-$460M and EPS of $0.15-$0.25 vs. a consensus of $437.4M and $0.25. FY15 guidance has been hiked due to the FQ3 beat.
- Not surprisingly, the titles making the biggest FQ3 revenue contributions were "Grand Theft Auto V and Grand Theft Auto Online, NBA® 2K15, WWE® 2K15, Borderlands®: The Pre-Sequel, and Sid Meiers Civilization®: Beyond Earth" Evolve launches on Feb. 10, and Sid Meier's Starships in the spring. GTA V arrives on PCs on March 24.
- Operating expenses rose 36% Y/Y to $187.5M. Sales/marketing spend totaled $96.9M, G&A $53.6M, and R&D $31.2M.
- Shares have made new 52-week highs in AH trading.
- FQ3 results, PR
Feb. 3, 2015, 4:11 PM
- Take-Two Interactive Software (NASDAQ:TTWO): FQ3 EPS of $1.87 beats by $0.35.
- Revenue of $953.97M (+24.3% Y/Y) beats by $156.31M.
- Shares +7%.
Feb. 2, 2015, 5:35 PM
Jan. 16, 2015, 10:35 AM
- Activision's (ATVI +6.3%) Call of Duty: Advanced Warfare topped NPD's U.S. physical retail game sale rankings for the second month in a row in December. Destiny, which Activision hopes will be its third $1B+ franchise, was #9.
- In a PR, Activision says Advanced Warfare was the "top-selling console game of 2014 globally," and that Destiny was the #2 2014 U.S. console game in terms of revenue. Skylanders was the top kids video game franchise globally (inc. toys/accessories sales), with a 30% sales edge over its biggest rival (presumably Disney's Infinity).
- Electronic Arts' (EA - unchanged) Madden NFL 2015 rose a spot to #3, and FIFA 15 returned to the top-10 (at #10). Take-Two's (TTWO +1.8%) Grand Theft Auto V was at #2 for another month, continuing to get a lift from its next-gen console and PC launches. NBA 2K15 rose three spots to #5.
- NPD estimates total U.S. physical retail game sales fell 2% Y/Y to $1.25B. Hardware sales, facing tougher comps (given next-gen consoles launched in Nov. 2013), fell 4% to $1.31B, with the Xbox One outselling the PS4. Next-gen consoles are performing 65% better than prior-gen consoles had over their first 14 months. GameStop (GME +3%), just three days removed from reporting better-than-expected holiday sales, is reacting favorably to the numbers.
- Superdata Research estimates U.S. digital game spend rose 11% Y/Y in December to $1.2B. Mobile game sales (35% of 2014 sales) rose 17%, and digital console game sales (8% of 2014 sales) 10%.
- EA reports on Jan. 27, Take-Two on Feb. 3, and Activision on Feb. 5.
- Previously: NPD's November data
- Update (2:15PM): EA is now up 1.8%, aided by a 0.8% increase for the Nasdaq. Activision is now up 9.2%, Take-Two 4.2%, and GameStop 4.5%.
Jan. 6, 2015, 8:22 AM
- Take-Two (NASDAQ:TTWO) will report FQ3 results on Feb. 3 after the market closes.
- The conference call is scheduled to begin at 4.30 p.m. ET.
- Consensus view is EPS of $1.47 on revenues of $780.74M.
Dec. 12, 2014, 10:39 AM
- Though Activision's (ATVI -1.5%) Call of Duty: Advanced Warfare was (as expected) #1 in NPD's November U.S. physical retail game sale rankings, Call of Duty franchise sales were down 27% Y/Y and Activision's total sales down 22%.
- That has led Piper to slash its Activision target by $3 to $24. "Strength in the Blizzard side of the business (WoW & HearthStone) should allow for an in-line Q4, but we are slightly lowering our estimates to now be in-line with company guidance."
- Take-Two (TTWO +3.3%), meanwhile, has rallied towards its 52-week high after Grand Theft Auto V (recently become available on the Xbox One, PS4, and PCs) ranked #2. NBA 2K15 was #8, down one spot from October. Borderlands: The Pre-Sequel fell out of the top-10.
- Electronic Arts' (EA +0.5%) Madden NFL 15 rose four spots to #4, but FIFA 15 fell out of the top-10. BofA/Merrill has hiked its targets (I, II) for both EA and Take-Two following NPD's numbers: It's optimistic EA can continue growing margins thanks to growing digital sales and cost controls, and argues Take-Two deserves a multiple similar to EA and Activision's.
- NPD estimates total U.S. physical game sales fell 2% Y/Y in November to $1.09B, a much smaller drop than October's 27%. With next-gen consoles having launched a year ago, hardware sales fell an estimated 23% to $1.01B, with the Xbox One (1.2M sales) outselling the PS4 following a $50 early-November price cut.
- Wedbush's Michael Pachter thinks game sales growth may have been positive after accounting for downloads and the frequent bundling of games with consoles. Meanwhile, Superdata Research estimates total digital game spend rose 23% Y/Y during the Thanksgiving period.
Nov. 14, 2014, 5:35 PM
- After coming in at #1 in NPD's September U.S. retail video game rankings (following a blockbuster Sep. 9 launch), Activision's (NASDAQ:ATVI) Destiny fell to #5 in October. Take-Two's (NASDAQ:TTWO) NBA 2K15, which launched on Oct. 7, took its place at the top.
- Borderlands: The Pre-Sequel, launched by Take-Two on Oct. 14, was #4. Skylanders Trap Team, which Activision released on Oct. 2, was #6.
- Electronic Arts' (NASDAQ:EA) FIFA 15 and Madden NFL 15 were #7 and #8, down from #3 and #2 in September. The Sims 4 fell out of the top-10, as did Activision's Diablo III: Reaper of Souls.
- Altogether, NPD estimates U.S. physical retail game sales fell 27% Y/Y to $350.3M. They were down 36% in September, thanks in part to tough comps caused by last year's GTA V launch. Xbox One/PS4 demand led console sales to rise 59% to $273.6M; Microsoft cut One prices by $50 early in November.
- The digital transition continues: SuperData Research estimates U.S. digital game spending rose 12% Y/Y in October to $957M.
- Activision's Call of Duty: Advanced Warfare launched on Nov. 3, and should be at or near the top of NPD's November rankings. Metacritic gives the game a score of 77/100.
- ATVI -1.2% in regular trading. TTWO +2.5%. EA +0.1%.
Oct. 31, 2014, 5:28 PM
- Sony (SNE +5.8%) sold 3.3M PlayStation 4 units in calendar Q3, up from 2.7M in Q2 and easily outpacing the 2.4M Xboxes sold by Microsoft in Q3. In addition, Sony reported its gaming unit posted a $195M profit, up from $43M in Q2 thanks to rising PS4 game royalties.
- VG Chartz estimates Sony has cumulatively sold 12.3M PS4 units since last fall, and Microsoft 6.1M Xbox One units. To boost sales, Microsoft recently slashed Xbox One prices by $50 - starting Nov. 2, the One sells for $349 without a Kinect, and $449 with one.
- Electronic Arts (EA +2.8%), Activision (ATVI +1.9%), and Take-Two (TTWO +4.7%) outperformed again today. All three game developers rallied yesterday after Take-Two posted a big FQ2 beat on the back of strong sales for Grand Theft Auto V, NBA 2K14, and Borderlands 2. EA jumped thanks to an FQ2 beat and strong EPS guidance the day before.
- GameStop (GME +1.5%) and PS4 CPU/GPU supplier AMD (AMD +1.8%) are likely also happy with Sony's PS4 sales figure.
Oct. 30, 2014, 9:18 AM
Oct. 29, 2014, 4:59 PM| Oct. 29, 2014, 4:59 PM | 1 Comment
Oct. 29, 2014, 4:35 PM
- Take-Two Interactive Software (NASDAQ:TTWO): FQ2 EPS of -$0.44 beats by $0.15.
- Revenue of $135.4M (+6.6% Y/Y) beats by $24.48M.
- Shares +6.7% AH.
Oct. 17, 2014, 1:55 PM
- With last year's Grand Theft Auto V (TTWO +0.3%) launch skewing comps, NPD estimates U.S. physical retail video game sales fell 36% Y/Y in September to $481.2M, a worse decline than August's 21% drop.
- The ongoing spending shift towards digital channels naturally contributed to the drop as well: SuperData Research estimates digital game spend rose 8.6% Y/Y in September to $873M.
- Hardware spend rose 136% Y/Y (up from August's 116%) thanks to next-gen console demand: NPD thinks PS4 sales nearly tripled from August levels with the help of Sony's (SNE +1.8%) Destiny bundle, and outpaced Xbox One sales yet again. GameStop (GME +2.7%) investors approve of the numbers.
- Electronic Arts (EA +4.5%) is rallying after Madden NFL 15, FIFA 15, NHL 15, and The Sims 4 respectively came in at #2, #3, #6, and #8 on NPD's top-10 list. Of the four games, only Madden was on the August list (#1 in its launch month). Battlefield 4 (#9 in August) fell out of the top-10.
- As expected, Activision's (ATVI -0.5%) Destiny was #1. But Diablo III: Reaper of Souls fell to #10 from #2, and Call of Duty: Ghosts (#5 in August) dropped out of the top-10. Activision, like Take-Two, is sitting out a market rally.
- EA reports on Oct. 28, Take-Two on Oct. 29, Sony on Oct. 31, and Activision on Nov. 4.
Sep. 9, 2014, 7:52 AM
- A channel check from Cowen Research analyst Doug Creutz indicates video game console/handheld software sales fell 10% Y/Y in August.
- The monthly tally would look even worse if not for the positive comp delivered by this year's Madden NFL game.
- Related stocks GameStop (NYSE:GME), Electronic Arts (NASDAQ:EA), Take-Two Interactive (NASDAQ:TTWO), and Activision Blizzard (NASDAQ:ATVI).
Sep. 5, 2014, 10:07 AM
Aug. 29, 2014, 11:29 AM
- Take-Two (TTWO +4.1%) president Karl Slatoff says his company is weighing the pros and cons of bringing Grand Theft Auto to the big screen. He adds Take-Two doesn't think a weak box office showing would hurt the GTA game franchise.
- Dan Houser, the co-founder of GTA developer Rockstar Games, also appears open to doing a GTA movie. However, he insists Rockstar would want to make the film on its own.
- Benchmark's Mike Hickey thinks a GTA film makes sense, and that it could compel Activision (ATVI +0.3%), rumored to be hatching plans for its own movie studio, to acquire Take-Two.
- Hickey calls an Activision/Take-Two deal a "no-brainer," given Take-Two's developer talent, IP, and low valuation. He notes Activision can lower its business volatility by staggering Rockstar, Bungie, and Blizzard releases, and that Take-Two could help offset World of Warcraft's ongoing decline and Skylanders competition from Disney.
Take-Two Interactive Software, Inc. is a developer, marketer and publisher of interactive entertainment for consumers around the globe. The company develops and publishes products through its two wholly-owned labels Rockstar Games and 2K. Its products are designed for console systems, handheld... More
Industry: Multimedia & Graphics Software
Country: United States
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