The lights are on
Take-Two Interactive's 2013 financial performance is only made more impressive by realizing that Grand Theft Auto V is going to sell better than Max Payne 3. In fact, the parent of publishers Rockstar Games and 2K Games is so confident in the power of Grand Theft Auto V and that franchise's back catalog that it expects Rockstar to contribute 65% of revenue this year, with the remainder coming from all of 2K's publishing.
While CEO Strauss Zelnick wasn't specific about how many games Rockstar would be publishing in 2014, he did affirm that the single tentpole game model was working well. As for 2K Games, we reported earlier that sales of major titles, including Bioshock Infinite and Borderlands 2, were impressive. Borderlands 2 contributed more to digital revenue than any other title, a segment that is expected to make up approximately 27% of total revenue in 2014.
In 2013, Non-GAAP revenue was $1.222 billion, up from $825.8 million the year before. Non-GAAP net income was $33 million up from a net loss of $59 million in 2012. Take-Two projects net revenue in 2014 to fall within the range of $100 million to $125 million.
With regard to next generation development, Zelnick was unwilling to talk numbers, but he did confirm that there is "no doubt that developing for what will be next generation will be costly." Other costs expected in 2014 include increased marketing, which Zelnick cited as a key strategic advantage for Take-Two and increased staffing in support of the upcoming release schedule. Operating expenses are expected to rise 3%.
According to chief financial officer Lainie Goldstein, 2014 projections include announced titles. According to her, unannounced projects have no material impact on financial expectations. In other words, Grand Theft Auto V, and that sales of previous games in that series, are extremely important to Take-Two's continued success and especially its performance in 2014. Our previews already hint that it might live up to the hype.
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