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T2 FY13: Borderlands 2 ships 6 million, WWE 2K14 dated

Monday, 13th May 2013 23:14 GMT By Brenna Hillier

Rockstar and 2K parent company Take-Two has released its fourth quarter and FY 2013 financial report, showing increased revenue and profits off the back of BioShock Infinite and Borderlands 2, a jump in digital revenue, and a bustling upcoming release schedule.

At a glance

Quarterly and full year revenues up year-on-year.

Take-Two made a profit in the fourth quarter but a loss overall for the year total.

BioShock Infinite sold-in 3.7 million units.

Max Payne 3 has shipped 4 million units. Borderlands 2 has shipped 6 million units and is likely to be 2K’s best-selling title.

Digital revenues at a “record high”.

WWE 2K14 is due on October 29.

Take-Two’s next-gen slate includes new IP.

For the quarter and fiscal year ending March 31 2013, Take-Two reported revenue of $299.5 million, a significant jump on the $148.1 million of the Q4 FY12.

As a result, the company finished with income of $21.2 million, which might not look huge, but in the same quarter a year ago it made a loss of $66.0 million. Take-Two now has a comfortable wad in the bank, with $402.5 million in cash and cash equivalents.

BioShock Infinite was one of the biggest earners for the quarter, with 3.7 million units shipped to retailers. NBA 2K13, Borderlands 2, Major League Baseball 2K13 were also noted as strong performers.

Max Payne 3 has shipped 4 million units, and Borderlands 2 has shipped 6 million units; it’s on track to become 2K’s most successful title to date.

Take-Two’s back catalogue also sold strongly, with Grand Theft Auto 4, Red Dead Redemption and Civilization 5 highlighted; catalogue titles accounted for 25% of adjusted revenue.

The publisher has been strongly pushing its classic titles to digital storefronts, notably the PlayStation Store, and noted that Q4 sales of digitally delivered content grew by 192% year-on-year and accounted for 27% of adjusted revenue. This was described as a “record” result, and during its post-release call to investors, Take-Two said social and mobile projects, online games for Asia, and its first Japanese mobile release, NBA 2K13, are all doing very well. The company seems very enthusiastic about its expansion into Asian markets, especially with online games.

Upcoming releases

Borderlands 2: Psycho Pack – May 14

Borderlands 2: Tiny Tina’s Assault on Dragon Keep – June 25

Civilization 5: Brave New World – July 9

The Bureau: XCOM Declassified – August 20

Grand Theft Auto 5 – September 17

NBA 2K14 – October 1

WWE 2K14 – October 29

During a Q&A session with investors, Take-Two said “there are some unannounced titles in FY14 guidance, but they’re not very material to outlook” – so don’t expect any major surprises over the next year.

For the year in total, Take-Two reported revenue of $1.214 billion, well up from the $825.8 million of fiscal year 2012. Unfortunately the publisher did made a loss of $31.2 million, but it’s an improvement on the $107.7 million loss of FY 2012. The company said a one-time contractual obligation is responsible for the loss.

Over FY13, Borderlands 2, NBA 2K13, BioShock Infinite, Max Payne 3, Grand Theft Auto 4, XCOM: Enemy Unknown and Red Dead Redemption were the biggest revenue sources. Digital revenue grew 148% year-on-year and accounted for 22% of adjusted revenue.

Take-Two is confident in its upcoming product slate and has upgraded its forecasts; it now expects to make $125 million in adjusted revenue in Q1 FY14, and $1.85 billion in FY14 total.

Of this revenue, it expects Rockstar to produce 65% and 2K to account for 35%. Interestingly, the company told investors that although it expects significant re-orders on BioShock infinite, it expects marketing costs to outweigh them, resulting in a weak Q1 without a major release.

Take-Two had nothing but praise for 2K, noting that the young label had four of the top-rated games of the last year and commenting on its ability to deliver “consistent profits”. Rockstar also got a nod for ongoing profits from Red Dead Redemption and GTA 4.

The publisher talked up its next-generation release slate, promising “ground breaking new intellectual property” as well as releases from its proven franchises. On the subject of the next-generation transition, CEO Strauss Zelnick reneged on earlier comments to admit that the publisher has concerns about development costs.

“There’s no question that developing for what will be next-gen will be complicated and for the type of titles we do, will be costly,” he said.

“That said, we have a very strong balance sheet and we align our business with our costs.”

When asked by investors how Take-Two could issue guidance as far out as FY15, the publisher alluded to its development pipeline, which presumably means it’s pretty confident in unannounced next-gen titles.

Take-Two re-confirmed neither of its major brands will have a booth at E3, instead focusing on external events to promote 2K and Rockstar titles.

On the subject of Grand Theft Auto 5, Take-Two said only that it is “special”, hinting that Rockstar has been bold, and expecting it to power the next fiscal year. Asked about DLC, Zelnick said only that Take-Two will continue its usual policy in this regard, which is to keep games in players’ hands while “delighting” them.

Take-Two stock rose 6% following its earnings release and investor round table.

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