Take-Two Begins Road to Financial Recovery

by Ed Oswald

September 11, 2007, 11:53 AM

Take-Two investors that may have been looking for some good news got it late Monday as the company reported a narrower-than-expected loss.

Most recently, the company announced that it would be delaying the next release of one of its highest grossing titles Grand Theft Auto IV. The resulting fallout caused the company to trim its expectations and project a loss for the year.

Other issues have plagued the company, from its problems surrounding the previous installment of Grand Theft Auto, to the management shakeup brought about by a successful coup started by unhappy investors.

Even with all these problems, the successful release of BioShock, said to be one of the fastest selling games in video game history with 1.5 million discs shipped since its August 21 release, and the success of other titles in Take-Two's lineup are turning things around.

"Take-Two is well-positioned to capitalize on the growth of the video game market as next generation consoles gain traction," CEO Ben Feder said. "Our creative teams are delivering a strong and increasingly diverse product portfolio, including our successful new BioShock franchise."

The company posted a loss of .64 USD a share when excluding restructuring and legal fees, instead of the .67 USD a share loss the Street had been expecting.

Overall, it posted a net loss of $58.5 million, or 81 cents a share, much better than the $91.4 million loss it posted in the year ago quarter. While it is sticking to its predictions of a loss for the fiscal year ending October 31, it did say that it expected to pull a profit next year.

As part of its earnings release, the company also announced a new casual games division called 2K Play. One of the first deals it has signed to the new label is Nickelodeon, and games based on characters from the network will begin appearing in the fall.