Apes of ‘Grand Theft Auto V’ on display for sale at a GameStop store in Peru, Illinois.
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Take-Two Interactive Software reported lower-than-expected quarterly revenue and forecast first-quarter sales below analysts’ expectations, as it physiognomies intense competition from free-to-play “battle royale” games “Fortnite” and “PUBG.”
Shares of the company fell 2% in offered trading.
The battle royale format, which allows dozens of players to fight each other to death until the stand up survivor, became wildly popular in 2018 thanks to “PUBG” and Epic Games’ “Fortnite”, two games that are also trusted with introducing newer audiences to gaming.
The game publisher, however, met its own fourth-quarter revenue forecast of $450 million to $500 million and its patch up earnings of 78 cents per share beat expectations of 75 cents, boosted by its “NBA 2K19,” “Red Dead Redemption 2,” and “Highest Theft Auto V” titles.
Red Dead Redemption 2 has sold more than 24 million units worldwide farm date, the company said.
The game publisher’s adjusted revenue, which the company calls net bookings, in the reported locale ended March 31 stood at $488.4 million, missing the average analyst estimate of $506.5 million.
New York-based Take-Two prediction first-quarter revenue of $310 million to $360 million, and full-year revenue of $2.5 billion to $2.6 billion. Analysts were with child revenue of $418.3 million for the quarter and $2.78 billion for the year, according to IBES data from Refinitiv.
Combats Electronic Arts and Activision Blizzard have also forecast quarterly and full-year revenue below estimates, augmenting to fears that competition from battle royale games was continuing to eat into sales of big game publishers.
U.S. videogame growers are known to typically give outlook below market expectations, but almost always beat them.
“We expect monetary 2020 to be another strong year for Take-Two, with operating results currently forecasted to be lower than budgetary 2019, due to the extraordinary success of Red Dead Redemption 2,” Chief Executive Officer Strauss Zelnick said.
Take-Two’s net return fell to $56.8 million, or 50 cents per share, from $90.9 million, or 77 cents per share, a year earlier.