TAKE-TWO INTERACTIVE SOFTWARE, INC (NASDAQ:TTWO) recently disclosed its financials for the 3Q2021, which ended in December 31, 2020, during which it registered a strong performance.
The quarterly earnings report revealed that 62% of Take-Two’s GAAP revenue during the quarterly period. This is important because it highlights the company’s strategy for boosting revenue beyond game sales. Game developers have traditionally relied on the sale of gaming titles to generate revenue, which means that they constantly have to churn out have to be producing high-quality games to generate adequate revenue.
The success of the in-game purchases strategy is a game changer for companies like Take-Two because they do not necessarily have to focus on producing many games to attain decent revenue figures. They can instead focus on an adequate number of game titles that have a higher quality while also tapping into in-game purchases to fill the revenue gaps.
Take-Two also attributes the impressive quarterly performance to its robust lineup of game titles during the fiscal year. The company has high-profile games such as Grand Theft Auto V, Grand Theft Auto® Online, Red Dead Redemption 2, Red Dead Online, NBA 2K20 and NBA® 2K21.
Take-Two’s outlook for its 4QFY21
As far as the company’s outlook is concerned, Take-Two expects its revenue for the 4Q2021 to range between $702 and $752 million, which is notably lower than the $860.9 million reported in the previous quarter. One of the reasons for the lower revenue guidance is likely the fact that the previous quarter was boosted by holiday sales.
Recent releases in the last two months will provide significant support and hopefully boost the company’s performance beyond the revenue guidance. Take-Two’s performance also looks promising, taking into account the recently launched next-gen consoles which will contribute to higher game purchases. The performance should further be supported by the game publisher’s lineup of upcoming titles to be released in the next few months. The company not only targets sales from next-gen console titles but also the hardcore PC gaming segment.