Take-Two earnings on the rise as lockdowns boost video game sales
Shares of “Grand Theft Auto” publisher Take-Two Interactive surged on Tuesday after the company raised its annual sales forecast, citing surging demand from gamers stuck at home because of the coronavirus.
The gaming giant on Monday reported robust sales for titles like “NBA 2K,” which saw recurring consumer spending jump 126 percent to a new record. First-quarter revenue totaled $996.2 million, blowing past Wall Street estimates of $843.7 million.
Shares of Take-Two were recently up 3.6 percent at $173.76 in Tuesday morning trades. The shares are up nearly 40 percent this year, with all of their growth coming after the US began locking down in March to combat the pandemic.
US spending on video games in June surged 26 percent to $1.2 billion, the highest for the month in over a decade, according to research firm NPD, as people turned to games for relaxation during lockdowns and also purchased more in-game content.
“Grand Theft Auto V” was the fourth best-selling game in June, according to NPD. Over 135 million units of the game have been sold since its launch in 2013.
Take-Two also forecast adjusted sales above estimates for the second quarter, a period which includes the scheduled launch of “NBA 2K21”, the new title in its annualized basketball franchise.
Take-Two said that it will raise the price for games on the next-generation PlayStation 5 and Xbox Series X consoles to $69.99, a $10 increase from the current standard price for games.
“This is a very modest price increase,” Strauss Zelnick said on the earnings call. “The pricing has been going down on a real dollar basis for the better part of 15 years”, he said, adding production costs have gone up “greatly”.
With Post wires.
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