Take-Two Shares Drop After Annual Profit Forecast Misses Estimates

Take-Two missed analysts' estimates for annual profit after incorporating results from its purchase of mobile-game maker Zynga. In the extended trading, the shares fell.

The company said that its adjusted earnings per share will be between $4.70 and $4.85 in the fiscal year.

Take-Two was able to enter the fast-growing market for mobile games after completing its acquisition of Zynga. The creator of the best-selling PC and console games such as Bioshock and Red Dead Redemption is merging with the creator of the best-selling Facebook game Farmville.

Take-Two now expects net bookings of between $5.8 billion and $5.9 billion, up from its previous outlook of between $5.3 billion and $5.3 billion. Analysts had an average estimate of $5.32 billion.

After a surge in consumer spending and hours played on video games, the industry is struggling to keep players interested, especially with rising prices, supply chain issues and a lack of major new titles on the market. The company that makes graphics chips for the gaming industry said it expects macroeconomic conditions to continue. Microsoft and Sony have both reported falling sales this year. The current quarter revenue forecast from Electronic Arts fell short of analysts expectations.

Take-Two is the parent company of a number of video game labels. One of the most lucrative properties in entertainment history is the NBA 2K series, which has sold 170 million copies. According to people familiar with the project, the next game in the series is currently in development and is expected to be released in two years.

Take-Two is working on remakes of its games, including Grand Theft Auto VI.

A number of games have been delayed over the last year, including Kerbal Space Program 2, which will be released in 2023 along with four other games. Several employees at Take-Two subsidiary Hanger 13 were laid off in the spring, according to a report.

Take-Two said the new titles performed well. NBA 2K22 sold more units than the previous version of the game.

The company said in a statement on Monday that adjusted revenue, which excludes deferred revenue and other adjustments, rose to $1 billion in the second quarter. The analysts had projected almost a billion dollars. In the current period, Take-Two said it expects adjusted revenue to be up to 15% above analysts' estimates. In the period, Take-Two's net bookings increased because of in-app purchases from the company's game portfolio.