Take-Two third quarter profit falls 65 per cent

Grand Theft Auto publisher Take-Two has reported a significant decline in profit and revenue for its third fiscal quarter ended December 31, 2011.

Net profit fell 65 per cent to $14.2 million (£9m), while revenue dropped 29 per cent to $236.3 million (£149m).

October 2011 release NBA 2K12 was cited as a key revenue driver, having sold almost four million units to date, while digital content accounted for 11 per cent of revenue, driven by Grand Theft Auto, Red Dead Redemption, Borderlands and LA Noire offerings.

The results were in line with the publisher’s most recent financial outlook, and were attributed to a tough comparison with the same quarter last year, which benefited from the post-launch performance of Red Dead Redemption, plus the releases of Red Dead Redemption: Undead Nightmare and Grand Theft Auto IV: Complete.

For the nine months ended December 31, net revenue fell year-over-year from $954.6 million (£604m) to $677.7 million (£429m), while the company recorded a net loss of $42 million (£26.6m), versus a profit of $70.5 million (£44.6m) a year earlier.

"During the fiscal third quarter, we continued to execute strategically, creatively and operationally," said CEO Strauss Zelnick. "We delivered results that were solidly within our expectations, driven by strong holiday demand for NBA 2K12, our popular catalogue titles and digital offerings.

"Take-Two's future is extraordinarily promising,” he added, touting “the strongest development pipeline in the company's history” and predicting fiscal 2013 will be one of firm’s “best years ever”. The publisher’s line-up for its next financial year includes Max Payne 3, Spec Ops: The Line, Borderlands 2, two XCOM titles and BioShock Infinite, while Grand Theft Auto V’s release date remains TBA.

Zelnick also said the firm has “ample resources to pursue many growth opportunities”. Among its third quarter business highlights, Take-Two raised $250 million through a private offering of 1.75 per cent convertible senior notes due in 2016. “The net proceeds from the offering will be used for general corporate purposes, which may include acquisitions and other strategic investments and the refinancing of indebtedness,” the firm said. “In addition, the company amended its senior secured revolving credit facility on significantly improved terms.”