On February 6, Take-Two Interactive Software projected its fourth-quarter bookings to be below expectations due to reduced spending on mobile games linked to economic uncertainties and high inflation affecting consumer behavior.
The video game industry has faced challenging times, with layoffs, studio closures, and cancellations due to borrowing costs and weak sales over the past two years.
Company executives at Take-Two noted that their mobile games, including "Empires & Puzzles," did not meet internal projections as players scaled back on in-game purchases.
In 2022, Take-Two acquired Zynga, the maker of "FarmVille," to strengthen its presence in the mobile gaming sector and enhance its competitive standing.
According to Joost Van Dreunen from NYU's Stern School of Business, the mobile division of Take-Two is expected to become a more significant contributor to the company's earnings.
Following the announcement of the upcoming release of "Grand Theft Auto VI" in the fall of 2025, Take-Two's stock surged by more than 6% in after-hours trading, alleviating concerns among investors about any delays.
Anticipation is high for "Grand Theft Auto VI," a popular action-adventure franchise famous for its sandbox setting filled with fast cars, weapons, and dynamic characters.
Wedbush Securities analyst Michael Pachter commented on the positive impact of the news about "GTA VI" on investor confidence, dispelling fears of a potential delay.
For fiscal 2026 and 2027, Take-Two anticipates an increase in net bookings and many analysts foresee this growth being driven by "GTA VI."
The company's fourth-quarter bookings are projected to be in the range of $1.48 billion to $1.58 billion, slightly below the average estimate of $1.54 billion, as reported by LSEG.
Apart from "GTA VI," Take-Two also plans to launch significant titles such as "Borderlands 4" and "Mafia: The Old Country" during the year.
Although third-quarter bookings fell short of expectations at $1.37 billion compared to the estimated $1.39 billion, the company reported an adjusted earnings per share of 72 cents, surpassing the projected 57 cents.