Q4 2024 Take-Two Interactive Software Inc Earnings Call
Greetings and welcome to the take two fourth quarter and fiscal year 'twenty 'twenty four earnings call.
Speaker Change: At this time all participants are in a listen only mode.
Speaker Change: Brief question and answer session will follow the formal presentation.
Operator: If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. Good afternoon. Thank you for joining our conference call to discuss our results for the fourth quarter and fiscal year 2024, ending on March 31, 2024. Today's call will be led by Strauss Zelnick, Take-Two's Chairman and Chief Executive Officer, Karl Slatoff, our President, and Lainie Goldstein, our Chief Financial Officer.
Speaker Change: If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.
Speaker Change: As a reminder, this conference is being recorded.
Speaker Change: It's now my pleasure to introduce your host Nicole <unk> Senior Vice President of Investor Relations and corporate communications.
Speaker Change: Thank you you may begin.
Speaker Change: Good afternoon. Thank you for joining our conference call to discuss our results for the fourth quarter and fiscal year 2024 ended March 31, 2020 for today's call will be led by Strauss Zelnick take two's Chairman and Chief Executive Officer, Carl played out that president and leaning Goldstein, our chief financial officer will be available to answer your questions during the Q&A.
Speaker Change: Following our prepared remarks.
Operator: We will be available to answer your questions during the Q&A session following our prepared remarks. Before we begin, I'd like to remind everyone that statements made during this call that are not historical facts are considered forward-looking statements under federal securities laws. These forward-looking statements are based on the beliefs of our management, as well as assumptions made by and information currently available to us. We have no obligation to update these forward-looking statements.
Before we begin I'd like to remind everyone that statements made during this call that are not historical fact are considered forward looking statements under federal Securities laws. These forward looking statements are based on the beliefs of our management as well as assumptions made by and information currently available to US we have no obligation to update. These forward looking statements actual operating results may vary significantly from there.
Operator: Actual operating results may vary significantly from these forward-looking statements based on a variety of factors. These important factors are described in our filings with the SEC, including the company's most recent annual report on Form 10-K and quarterly report on Form 10-Q, including the risks summarized in the section entitled Risk Factors. I'd also like to note that, unless otherwise stated, all numbers we will be discussing today are GAAP, and all comparisons are year-over-year.
Speaker Change: Forward looking statements based on a variety of doctors. These important factors are described in our filings with the F. D C, including the company's most recent annual report on Form 10-K, and quarterly report on Form 10-Q, including the risks summarized in the section entitled risk factors.
Speaker Change: I'd also like to note that unless otherwise stated all numbers, we will be discussing today are GAAP and all comparisons are year over year additional details regarding our actual results and outlook are contained in our press release, including the items that our management uses internally to adjust our GAAP financial results in order to evaluate our operating performance. Our press release also contains a reconciliation.
Operator: Additional details regarding our actual results and outlook are contained in our press release, including the items that our management uses internally to adjust our GAAP financial results in order to evaluate our operating performance. Our press release also contains a reconciliation of any non-GAAP financial measure to the most comparable GAAP measure.
Strauss H. Zelnick: <unk> of any non-GAAP financial measure to the most comparable GAAP measures. In addition, we have posted to our website a slide deck that visually presents our results and financial outlook, our press release and filings with the FCC may be obtained from our website I take to Gamestop Com and now I'll turn the call over to Strauss.
Strauss H. Zelnick: In addition, we have posted on our website a slide deck that visually presents our results and financial outlook. Our press release and filings with the SEC may be obtained from our website at TakeTwoGames.com. Now, I'll turn the call over to Strauss.
Strauss H. Zelnick: Thanks, Nicole. Good afternoon, and thank you for joining us today. I'm pleased to report that we concluded Fiscal 2024 with strength, including net bookings of $1.35 billion, which exceeded the high end of our guidance range, contributing to our positive results with the outperformance of NBA 2K24, Zynga's in-app purchases led by Toon Blast and our newest hit, Match Factory, and the Red Dead Redemption and Grand Theft Auto series. During fiscal 2024, we generated net bookings With fiscal 2025 underway, our portfolio is gaining momentum, and we have many exciting releases planned for the year. We expect net bookings to be in the range of $5.55 to $5.65 billion, representing 5% year-over-year growth.
Strauss H. Zelnick: Thanks, Nicole good afternoon, and thank you for joining us today.
Strauss H. Zelnick: I'm pleased to report that we concluded fiscal 2020 forward strength, including net bookings of $135 billion, which exceeded the high end of our guidance range.
Speaker Change: Contributing to our positive results with the outperformance of the MBA <unk> 'twenty for Zynga in App purchases led by term blast and our newest test match factory.
Speaker Change: And the Red dead redemption, and Grand Theft Auto series.
Speaker Change: During fiscal 2024, we generated net bookings of $5 $33 billion, driven by our high quality titles and our ability to engage consistently our player communities.
Speaker Change: With fiscal 2025 underway our portfolio is gaining momentum and we have many exciting releases planned for the year.
We expect net bookings to be in the range of $5, five 5% to $565 billion, representing 5% year over year growth.
Strauss H. Zelnick: Our outlook reflects a narrowing of Rockstar Games' previously established window of calendar 2025 to the fall of calendar 2025 for Grand Theft Auto VI. We're highly confident that Rockstar Games will deliver an unparalleled entertainment experience, and our expectations for the commercial impact of the title continue to increase. As we release our groundbreaking pipeline, we expect to achieve tremendous growth, including sequential increases in net bookings in fiscal 2025-2026 and 2027. We've been executing our substantial cost reduction program, which we now anticipate will result in over $165 million of annual cost savings from our current and future expenses.
Speaker Change: Our outlook reflects a narrowing of Rockstar games' previously established window of calendar 2025 to fall of calendar 2025 for Grand theft Auto sex.
Speaker Change: We're highly confident that Rockstar games will deliver an unparalleled entertainment experience and our expectations for the commercial impact of the title continues to increase.
Speaker Change: And we released our groundbreaking pipeline, we expect to achieve tremendous growth, including sequential increases in net bookings in fiscal 2025, 2026 and 2027.
Speaker Change: We've been executing our substantial cost reduction program. We now anticipate will result in over $165 million of annual cost savings from our current and future expenses. This will enable us to run our business more efficiently achieve greater operating leverage as our large scale titles come to market.
Strauss H. Zelnick: This will enable us to run our business more efficiently and achieve greater operating leverage as our large-scale titles come to market. Now, turning to our performance during the quarter. NBA 2K24, which remains the number one basketball simulation experience in our industry, surpassed our expectations as players responded to our promotions, in-game content strategy, and updates within the season. To date, the title has sold over 9 million units. Engagement remains high, with nearly 2 million consumers playing daily.
Speaker Change: Now turning to our performance during the quarter.
Strauss H. Zelnick: Our industry-leading NBA 2K brand also continued to expand its audience through several innovative mobile experiences, including NBA 2K24 MyTeam, the new free-to-download mobile experience that allows players to sync progress between console and mobile devices as they play their favorite MyTeam modes on the go; NBA 2K Mobile, and NBA 2K24 Arcade Edition, which is consistently in the top five on Apple Arcade.
Speaker Change: NBA <unk> 24, which remains the number one basketball simulation experienced in our industry surpassed our expectations as players responded to our promotions and game content strategy and updates within seasons.
Speaker Change: To date the title has sold in over 9 million units.
Speaker Change: Engagement remains high with nearly 2 million consumers playing daily.
Speaker Change: Our industry, leading NDA Teekay brand also continued to expand its audience through several innovative mobile experiences, including NBA <unk> <unk> 'twenty for my team.
Speaker Change: The new free to download mobile experience that allows players to zinc progress between console and mobile devices as they play their favorite my team modes undergo NBA teekay mobile and NBA to K 24, our 10th edition, which is consistently in the top five on Apple arcade.
Speaker Change: The Grand Theft Auto series delivered another fantastic quarter, partially driven by an array of free content updates for Grand theft auto online, including new vehicles drag races holiday themed items to celebrate lunar new year, and Valentine's day, New community series jobs or more.
Strauss H. Zelnick: The Grand Theft Auto series delivered another fantastic quarter, partially driven by an array of free content updates for Grand Theft Auto Online, including new vehicles, drag races, holiday-themed items to celebrate the Lunar New Year and Valentine's Day, new Community Series jobs, and more. Unit sales for Grand Theft Auto V exceeded our forecast, and to date, the title has sold approximately 200 million units worldwide. We're thrilled that more than a decade after their initial releases, Grand Theft Auto V and Grand Theft Auto Online grew their audience size by an incredible 35% and 23%, respectively, for the full year. GTA V also reclaimed its top spot as the most-watched video game across all platforms, according to Stream Hatchet, thanks largely to the tremendous viewership from the series' thriving role-play community.
Speaker Change: Net sales for <unk> at the start of five exceeded our forecast and to date. The title has sold in approximately 200 million units worldwide.
Speaker Change: We're thrilled that more than a decade after their initial releases Grand theft auto five Grand theft Auto online grew their audience size by an incredible 35% and 23% respectively for the full year.
Speaker Change: Grand Theft auto five also reclaimed its top spot as the most watched video game across all platforms. According to stream hatch. It thanks, largely to the tremendous viewership from the series driving roleplay community.
Strauss H. Zelnick: Rockstar's premium subscription service, GTA Plus, also continues to grow, with membership for the quarter almost doubling over the same period in the prior year, as Rockstar continues to add valuable benefits to players. Red Dead Redemption 2 also surpassed our expectations and sold nearly 64 million units worldwide. We continue to expand the audience for the series, with Red Dead Redemption and Undead Nightmare recently added to the roster of games included within the GTA Plus library.
Speaker Change: <unk> premium subscription service GTA plus also continues to grow with membership for the quarter almost doubling over the same period in the prior year as Rockstar continues to add valuable benefits to players.
Speaker Change: Red Dead redemption, two also surpassed our expectations and has sold in nearly 64 million units worldwide.
Speaker Change: We continue to expand the audience for the series with Red Dead redemption, and non debt Nightmare recently added to the roster of games included within the GTA plus library.
Speaker Change: Borderlands III outpaced our forecast and we're thrilled that Randy Pitchford Havent gearbox entertainment are slated to join efficiently to cases, where now internal studios in the coming weeks, we've already identified many potential growth opportunities for the borderlands series and gearboxes catalog, which we plan to pursue once a sturdy.
Strauss H. Zelnick: Borderlands 3 outpaced our forecast, and we're thrilled that Randy Pitchford and Gearbox Entertainment are slated to join 2K's renowned internal studios in the coming weeks. We've already identified many potential growth opportunities for the Borderlands series in Gearbox's catalog, which we plan to pursue once the studio is integrated into our organization. We're also excited to see growing buzz for the star-studded Borderlands feature film, which is planned for release by Lionsgate this summer.
Speaker Change: <unk> is integrated into our organization.
Speaker Change: We're also excited to see growing buzz for the star studded Borderlands feature film, which is planned for release by Lionsgate. This summer.
Speaker Change: WWE WWE <unk> 24 has been a resounding success as the highest rated sports simulation of 2020 for.
Strauss H. Zelnick: WWE 2K24 has been a resounding success and is the highest-rated sports simulation of 2024. The title is also the highest-rated installment in the history of our popular wrestling franchise on Xbox, with an 83 average Metacritic score.
Speaker Change: The title is also the highest rated installment in the history of our popular restaurant franchise on X box with an 83 average Metacritic score engagement has been exceptional with players logging over 11 million hours across more than 110 million played matches. In addition to four years of Wrestlemania pack has the highest attach rate for <unk>.
Strauss H. Zelnick: Engagement has been exceptional, with players logging over 11 million hours across more than 110 million played matches. In addition, the 4 Years of WrestleMania pack has the highest attach rate for a Super Deluxe DLC in the series' history, with more than 25% of WWE 2K24 players owning it. 2K, and Visual Concepts are continuing to support the title and will have additional packs launching throughout the fall. I'd like to thank our friends Nick Kahn and Ari Emanuel over at WWE, TKO, and WME for their continued support.
Speaker Change: Deluxe DLC and the series history with more than 25% of WWE <unk> K 24 players owning yet.
Speaker Change: <unk> and visual concepts are continuing to support the title and will have additional tax launching throughout the fall.
Speaker Change: I'd like to thank our friends Midcon and already Emmanuel over a WWE TKO in WMA for their continued support.
Strauss H. Zelnick: Additionally, I'd like to express our immense gratitude to our team at Visual Concepts for their outstanding work on our WWE 2K and NBA 2K franchises, which are both important annual contributors for our company. Zynga delivered outstanding results for the period, led by robust in-app purchases. Match Factory is accelerating and proving to be a hit, already establishing itself as the top 20 grossing game in the U.S. Apple App Store and reaching millions of new users with its launch on the Google Play Store.
Speaker Change: Additionally, I'd like to express our immense gratitude to our team and visual concepts for their outstanding work on our WWE <unk> and NBA <unk> franchises, which are both important annual contributors for our company.
Speaker Change: Zynga delivered outstanding results for the period led by robust in App purchases match factory is accelerating and proving to be a hit already establishing itself as a top 20 grossing game in the U S. Apple App store and reaching millions of new users with its launch on the Google play store, we're pleased that <unk>.
Strauss H. Zelnick: We're pleased that new bold leads and other exciting features have propelled average daily playtime to around 60 minutes per user. Toon Blast maintains its positive momentum, achieving nearly 20% growth in app purchases compared to the third quarter, driven by new dragons, treasure competition, and many other features. We'd like to congratulate the team at Peak for their incredible performance. Top Troops launched several content updates, as well as a major cross-media collaboration with the popular influencer MrBeast.
Speaker Change: <unk>. Some other exciting features have propelled average daily play time trial 60 minutes per user.
Speaker Change: <unk> maintained its positive momentum achieving nearly 20% growth of in app purchases compared to the third quarter, driven by new Dragons Treasurer competition and many other features we'd like to congratulate the team at peaks for their incredible performance.
Speaker Change: Top troops launched several content updates as well as a major cross media collaboration with the popular Influencer. Mr. Beast. The team plans to release additional enhancements to core gameplay and progression systems to drive further growth.
Strauss H. Zelnick: The team plans to release additional enhancements to core gameplay and progression systems to drive further growth. Momentum continues to be strong, with the studio crossing 3.5 billion all-time downloads and announcing a new partnership with Mattel to introduce a mass-market Barbie mobile game later this calendar year. Our blended monetization efforts and hypercasual are progressing well within Rollick, which has resulted in Twisted Tangle and Screw Jam both becoming top 100 grossing games on the U.S. Apple App Store.
Speaker Change: Momentum continues umbrella with the studio crossing $3 5 billion, all time downloads and announcing a new partnership with Mattel to introduce a mass market Barbie mobile game later this calendar year.
Speaker Change: Our blended monetization efforts and hyper casual are progressing well with <unk>, which has resulted in a twist to tangle and screw jam, both becoming top 100 grossing games on the U S. Apple App store.
Strauss H. Zelnick: Our direct-to-consumer business continues to grow, and our teams are working actively to add more titles each quarter to this highly creative owned distribution channel. Looking ahead, Zynga has numerous titles in development and soft launch that we're eager to release worldwide this fiscal year, including Star Wars Hunters and Game of Thrones Legends. In closing, I'm highly confident in our business, led by our top creative talent, our industry-leading portfolio of owned intellectual property, our sound balance sheet, and our increasingly efficient infrastructure.
Speaker Change: Our direct to consumer business continues to grow and our teams are working actively to add more titles each quarter to this highly accretive owned distribution channel.
Speaker Change: Looking ahead Zynga has numerous titles in development in soft launch that we're eager to have released worldwide. This fiscal year, including Star Wars hunters game of Thrones lessons.
Speaker Change: In closing I'm highly confident in our business led by our top creative talent, our industry, leading portfolio of owned intellectual property, our sound balance sheet and our increasingly efficient infrastructure.
Strauss H. Zelnick: Our teams are laser-focused on our core tenets of creativity, innovation, and efficiency. And as we deliver our groundbreaking pipeline over the next several years, we're also poised to deliver industry-leading growth and shareholder returns. I'll now turn the call over to Karl.
Speaker Change: Our teams are laser focused on our core tenants of creativity innovation and efficiency and as we deliver our groundbreaking pipeline over the next several years, we're poised also to deliver industry, leading growth and shareholder returns.
I'll now turn the call over to Carl.
Karl Slatoff: Thanks, Chris I'd like to thank our teams for their dedication and hard work as we continue to build the foundation for our future, which we believe is more promising than ever.
Karl Slatoff: Thanks, Strauss. I'd like to thank our teams for their dedication and hard work as we continue to build the foundation for a future which we believe is more promising than ever. We are extremely excited about our upcoming pipeline, which includes approximately 40 titles through fiscal 2027. Our updated release schedule reflects the actions of our recent cost-reduction program, through which we canceled several titles to focus our efforts and resources on the franchises we believe represent our best opportunities to achieve significant critical and commercial success.
We are extremely excited about our upcoming pipeline, which includes approximately 40 titles to fiscal 2027.
Karl Slatoff: Our outstanding release schedule reflects the actions of our.
Karl Slatoff: Our recent cost reduction program to which we canceled several titles to focus our efforts and resources on the franchises. We believe represent our best opportunities to achieve significant critical and commercial success.
Karl Slatoff: These titles did not include any of our core franchises and were not expected to materially affect our net bookings growth. Turning to fiscal 2025, we have 16 titles in our pipeline, three of which have already been released, and we have seven immersive core titles, including Topspin, NBA, and WWE 2K25, and the next iteration in one of 2K's biggest and most beloved franchises, with the first details coming in just a few short weeks at Summer Games Fest Kickoff Live. Of these titles, Topsten 2K25 was released by 2K and Hanger 13 on April 26.
Karl Slatoff: These titles did not include any of our core franchises and are not expected to materially affect our net bookings growth.
Karl Slatoff: Turning to fiscal 2025, we have 16 titles in our pipeline three of which have already been released.
Karl Slatoff: We have seven immersive core titles, including top spin NBA and WWE Teekay 25, and the next generation and one or two cases biggest and most beloved franchises with a first details coming in just a few short weeks at summer games past kickoff live.
Karl Slatoff: These titles have spent <unk> 25 was released by two K and hangar 13 on April 26th.
Karl Slatoff: The revival of our popular tennis franchise has been well-received by critics and provides deep personalization, iconic venues, and industry-leading gameplay. With Topspin 2K25, we continue to broaden our sports offerings, and 2K will support the title with season packs throughout the year. We have two independent titles from Private Division, the first of which is Moon Studios' No Rest for the Wicked, which launched on April 18th for early access on PC. This new RPG was well-received for its visceral combat, distinct art style, and rich narrative.
Karl Slatoff: The revival of our popular tennis franchise has been well received by critics and provides deep personalization iconic venues and industry leading gameplay.
Karl Slatoff: The top spin <unk> 25, we continue to broaden our sports offerings and Teekay will support the title with Hayden impact throughout the year.
Karl Slatoff: We have two independent titles from private division. The first of which is main studios no rectify the Wiccan, which launched on April 18th and to early access on PC.
Karl Slatoff: This new ARPG was well received for visceral combat distinct art style and rich narrative.
Karl Slatoff: Private Division, along with Weta Workshop, also announced Tales of the Shire, a Lord of the Rings game, which is planned for release later this year. The teams recently revealed a new trailer for this cozy, Hobbit-like sim, which is set in the Middle-Earth universe of J.R.R. Tolkien.
Karl Slatoff: Private division along with Weta Workshop also announced tails of the Shire, our Lord of the rings game, which is planned for release later this year.
Karl Slatoff: The teams recently unveiled a new trailer for this cozy private life cents, which is set in the middle Earth Universe of Jr. Token.
Karl Slatoff: We have five mobile titles, including NFL ticket fine acres Star Wars hunters and game of Thrones legends.
Karl Slatoff: We have five mobile titles, including NFL 2K Playmakers, Star Wars Hunters, and Game of Thrones Legends. NFL 2K Playmakers was released on April 23rd by 2K and Cat Daddy Games for iOS and Android devices. In this non-simulation tactical card battle, players can collect NFL player cards to assemble an exciting roster while also experiencing a variety of game modes and features.
NFL Teekay Playmakers was released on April 23rd by Teekay, and Cat Daddy games for iOS and Android devices.
Karl Slatoff: Non stimulation tactical card battle players can collect NFL player cards to assemble an exciting roster. While also experiencing a variety of game modes and features.
Karl Slatoff: We're proud to add NFL 2K Playmakers to our ever-growing mobile portfolio in partnership with the NFL and the NFL Player Association. Lastly, we have two new iterations of prior releases planned for this year. As always, our labels will continue to provide new content and experiences that drive engagement and recurring consumer spending across many of our key offerings. Looking ahead, our pipeline for fiscal 2026 and 2027 has 24 titles planned, including 15 immersive core releases, six of which are sports simulation games, one independent title, five mobile games, and three new iterations of previously released titles. In closing, we believe that the many opportunities ahead of us will deliver a period of meaningful long-term growth, margin expansion, and shareholder return. I'll now turn the call over to Lainie.
Karl Slatoff: We're proud to add NFL, teekay playmakers to our ever growing level portfolio in partnership with the NFL The NFL players Association.
Karl Slatoff: Lastly, we had two new iterations of prior releases planned for this year.
Karl Slatoff: As always our labels will continue to provide new content and experiences that drive engagement and recurrent consumer spending across many of our key offerings.
Karl Slatoff: Looking ahead, our pipeline for fiscal 2026, and 2027 has 24 titles planned including 15 Msas core releases six of which are sports simulation games.
Karl Slatoff: One independent title five mobile games and three new iterations of previously released titles.
Karl Slatoff: In closing, we believe that the many opportunities ahead of US we will deliver a period of meaningful long term growth margin expansion and shareholder returns.
Speaker Change: I'll now turn the call over to <unk>.
Speaker Change: Thanks, Karl and good afternoon, everyone.
Lainie Goldstein: Thanks, Karl, and good afternoon, everyone. We delivered a strong finish to Fiscal 2024 and are entering Fiscal 2025 with momentum, including healthy trends across our key franchises. Throughout the year, we release successful hit titles, engage players with a steady cadence of in-game content, and continue to position our organization for the long term. We have also strengthened our commitment to efficiency and made some decisions that, while difficult, will align our resources with the initiatives to which we have the highest levels of conviction.
Speaker Change: We do have a good strong finish to fiscal 2024 and are entering fiscal 2025 and momentum.
Speaker Change: <unk> healthy trends across our key franchises.
Speaker Change: Throughout the year evenly successful hey, Kyle engaged.
Speaker Change: Dedicating of in game content and continued to position our organization for the long term.
Speaker Change: We're also keeping our commitment to efficiency.
Speaker Change: 70% that lost difficult lineup is tracking to the influence of reps, who have the highest levels of connection there.
Lainie Goldstein: We are confident that over time, these steps will drive our scale, enhance our margins, and deliver industry-leading returns for our shareholders. I'd like to thank our teams for their vision, passion, and dedication. Turning to our results, we delivered fourth-quarter net bookings of $1.35 billion, which was above our guidance range of $1.27 to $1.32 billion. This reflected better-than-expected results from MBA 2K24, gymnasts' in-app purchases led by Toon Blast and MassFactory, the Red Dead Redemption series, and the Grand Theft Auto series. Current consumer spending declined 2% for the period and accounted for 79% of net bookings.
Speaker Change: We are confident that over time that will drive our scale enhance our margins and deliver industry, leading returns for our shareholders.
Speaker Change: I'd like to thank our team for their passion and dedication turning to our results we delivered fourth quarter net bookings of one <unk> 5 billion.
Lainie Goldstein: This was a bad-hour outlook driven by the outperformance of NBA 2K, Team Blast, and Match Factory. Current consumer spending declined for Grand Theft Auto Online, although it was up for Virtual Currency and GTA+. MBA 2K was in line with the prior year, and mobile increased slightly. During the quarter, we successfully launched WWE 2K24, which demonstrates 2K and visual concepts' ability to raise the bar further for our popular wrestling series. The gap in our revenue decreased 3% to $1.4 billion, while cost of revenue declined 24% to $930 million and included an impairment charge of $304 million related to acquired intangible assets. Operating expenses increased by 244% to $3.2 billion due to a goodwill impairment charge of $2.2 billion and $93 million of business reorganization expenses related to our recently announced cost reduction program.
Speaker Change: Was above our guidance range of $1 87 to one <unk>.
Speaker Change: Reflected better than expected results from MB ATK 24.
Speaker Change: In our practice.
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Speaker Change: The current consumer spending declined 2% for the period and accounted for 79% of net bucket.
Speaker Change: This was above our outlook driven by the outperformance in EMEA Teekay <unk> and NASDAQ Lee the current consumer spending declines Grand theft auto online about is absent actual currency and GTA.
And Ian Teekay was inline with the prior year and novel increased slightly.
Speaker Change: During the quarter, we successfully lines WWE Teekay 'twenty, which.
Speaker Change: Which demonstrate teekay and visual concepts ability to raise the bar for either for a copy of our vaccine.
Speaker Change: GAAP net revenue decreased 3% to $1 4 billion.
Speaker Change: While cost of revenue declined 25% from $930 million.
Speaker Change: And including an impairment charge of $204 million.
Speaker Change: Related to acquired intangible assets.
Speaker Change: Operating expenses increased by 244% to two principle in di.
Speaker Change: The goodwill impairment charge of $2 2 billion.
Speaker Change: And $92 million as business European based and expenses related to our recently announced cost reduction program.
Lainie Goldstein: On a management basis, operating expenses rose 20% year-over-year, which was slightly above our guidance due to higher personnel and IT expenses and professional fees. For fiscal 2024, we achieved net bookings of $5.33 billion, which was slightly above our revised guidance range of $5.25 to $5.3 billion. Recurrent consumer spending grew 2%, which exceeded our outlook and accounted for 78% of net bookings. Current consumer spending for mobile increased high signal digits, NBA 2K virtual currency, and seasons was up.
Speaker Change: On a management basis operating expenses rose, 20% year after year, let's just slightly above our guidance due to higher personnel expenses and professional fees.
Speaker Change: For fiscal 2028 achieved net bookings of $5 $3 billion, which was slightly above our revised guidance range of $5 85 to $5 3 billion.
Speaker Change: The current consumer spending grew 2%, which exceeded our outlook and accounted for 78% of net bookings.
Speaker Change: Consumer spending from mobile increased high single digits, and BMC gateway actual currency and seeking for that.
Lainie Goldstein: Slightly, and Grants of Throttle Online, Virtual Currency, and GTA Plus Membership with Slatt. Non-GAAP-adjusted unrestricted operating cash flow was $42 million as compared to our outlook of approximately $100 million due to higher external developer advances, cash tax, and interest payments.
Speaker Change: Lately from Grand Theft Auto online price for currency in GTA pass membership was flat.
Speaker Change: non-GAAP adjusted unrestricted operating cash flow for $80 million as compared to our outlook of approximately $100 million.
Speaker Change: Due to higher external to the author advances cash tax and interest payments.
Lainie Goldstein: We spent approximately $142 million on capital expenditures, primarily for game technology and office build-out. The gap in our revenue was flat at $5.35 billion, and the cost of revenue increased 1% to $3.1 billion, which included an impairment charge of $577 million related to acquired and financial assets. Operating expenses increased 69% to $5.8 billion due to an impairment charge of $2.3 billion related to Goodwill and a $105 million business reorganization charge related to our cost reduction program.
Speaker Change: Approximately $142 million on capital expenditures amounting for game technology and office build outs.
Speaker Change: GAAP net revenue was flat at $5 5 billion and.
Speaker Change: And cost of revenue increased 1% to $2 1 billion.
Speaker Change: This included an impairment charge of $577 million.
Speaker Change: Related to acquired intangible assets.
Speaker Change: Operating expenses increased 69% to $5 8 billion due to an impairment charge of $2 3 billion.
Related to goodwill and $105 million business reorganization charge related to our cost reduction program and.
Lainie Goldstein: On a management basis, operating expenses rose 15% year-over-year and were slightly above our guidance due to the factors I mentioned earlier that affected the fourth quarter. Today, we've provided our outlook for fiscal 2025. We predict net bookings to range from $5.55 billion to $5.65 billion, which represents 5% growth over fiscal 2024. The largest contributors to net bookings are expected to be NBA 2K, the Grand Theft Auto series, Team Blast, Empires and Puzzles, our hyper-casual mobile portfolio, Match Factory, the Red Dead Redemption series, an unannounced immersive core title from 2K, and Worlds with Friends. We expect recurrent consumer spending to be up approximately 3% compared to fiscal 2024 and to represent 76% of net bookings.
On a management basis operating expenses rose, 15% year over year and.
Speaker Change: <unk> slightly above our guidance due to the factors I mentioned earlier that affected the fourth quarter.
Speaker Change: David provided our outlook for fiscal 2025.
Speaker Change: We project net bookings to range from 555 billion to $5 65 billion.
Which represents 5% growth over fiscal 2024.
Speaker Change: The largest contributors to net bookings are expected to be NBA teekay granted satisfactory Kim glass empires <unk> puzzles are hydro cash our novel portfolio, NASDAQ III does that get redemption, sorry, an unannounced message Cortina from Teekay and words with friends.
Speaker Change: We expect the current consumer spending to be up approximately 3% compared to fiscal 2024 and could represent 76% of net bookings.
Speaker Change: Have a current consumer spending forecast assumes high single digit growth in mobile site increased NBA CK and it declined for Grand theft Auto online, we expect the net bookings breakdown from our labels to be roughly 50%, saying that stays 1% U K, 17% Rockstar games and 2% other ameren forecast that.
Lainie Goldstein: Our current consumer spending forecast assumes high single-digit growth for mobile, a slight increase for NBA 2K, and a decline for Grand Theft Auto Online. We expect the net bookings breakdown from our labels to be roughly 50% Zynga, 31% 2K, 17% Rockstar Games, and 2% Other. And we forecast our geographic net bookings split to be about 60% United States and 40% International. We expect non-GAAP-adjusted, unrestricted operating cash flow to be an outflow of $200 million, and we plan to deploy approximately $140 million for capital expenditures, primarily for game technology and office build-out.
Speaker Change: Thank you have a clean slate to about 60% United States and 40% International.
Speaker Change: We expect non-GAAP adjusted unrestricted operating cash has to be an outflow of $200 million annually.
Speaker Change: And we plan to deploy approximately $140 million.
Speaker Change: For capital expenditures, primarily for game technology and office build out.
Lainie Goldstein: We expect GapNet revenue to range from $5.57 to $5.67 billion and cost of revenue to range from $2.43 to $2.46 billion. Turning to operating expenses, we recently implemented a cost reduction program that is expected to deliver over $165 million of annual cost savings across our entire business. As part of these efforts, we have eliminated several projects and developments that we did not anticipate would meet our financial benchmark. We also took actions to streamline our organizational structure, which reduced both existing headcount and future hiring needs.
Speaker Change: We expect GAAP net revenue to range from $5 $75 7 billion.
Speaker Change: And cost of revenue to range from $2 43 to 246 39, turning to operating expenses.
Speaker Change: We recently implemented a cost reduction program that is expected to deliver over $165 million.
Speaker Change: Annual cost savings across our entire debt.
Speaker Change: As part of these efforts we have eliminated several projects in development and we did not anticipate would meet our financial benchmarks. We also took actions to streamline our organizational structure that you discuss existing head count and future hiring needs.
Lainie Goldstein: Our total operating expenses are expected to range from $3.56 to $3.58 billion, as compared to $5.83 billion last year. On a management basis, we expect operating expense growth of approximately 7% year-over-year, which is largely due to an increase in ongoing marketing support for Match Factory, as well as other mobile and immersive core launches planned for the year, partially offset by savings from our cost reduction program. Looking ahead, and as Strauss mentioned earlier, we have narrowed the previously established release window for Grand Theft Auto VI to the fall of calendar 2025 from calendar 2025.
Speaker Change: Our total operating expenses are expected to range from three five to $3 $5 million to $8 million as compared to $5 $83 billion last year on a management basis, we expect operating expense growth of approximately 7% year over year, which is largely due to an increase in ongoing marketing support the Max factory as well as other.
Speaker Change: And in Mexico, <unk> launch is planned for the year, partially offset by savings from our cost reduction program.
Speaker Change: Looking ahead in SaaS mentioned earlier, we have narrowed the previously established released or announced for Grand theft auto sector to fall of calendar 2025 from calendar 2025 as development advances our confidence in the title and its potential commercial impacts continue to grab that said, we are not providing specific guidance beyond.
Lainie Goldstein: As development advances, our confidence in the title and its potential commercial impact continues to grow. That said, we are not providing specific guidance beyond fiscal 2025, as our release schedule includes numerous titles each year, and even modest shifts can have a significant effect on results in any given period. Our outlook for the lifetime value of our pipeline remains as strong as ever, and we expect sequential growth and netbooking in fiscal 2025, 2026, and 2027. Now, moving on to our guidance for the fiscal first quarter. We project net bookings to range from $1.2 to $1.25 billion compared to $1.2 billion in the first quarter of last year.
Speaker Change: In fiscal 2025 as our release schedule includes numerous titles ETF and even modest shifts can have significant impact on results in any given period.
Speaker Change: Our outlook for the lifetime value of the pipeline remains as strong as ever and we expect sequential growth in networking in fiscal 2025, 2026 and 2027 now.
Lainie Goldstein: Our release date for the quarter includes Stop Spin 2K25, No Rest for the Wicked on Early Access for PC, and NFL 2K Playmakers, all of which have already been released, and Star Wars Hunters. The largest contributors to Netbookings are expected to be NBA 2K, the Grand Theft Auto series, Team Blast, Empires and Puzzles, our hyper-casual mobile portfolio, Mass Factory, the Red Dead Redemption series, We project our current consumer spending to increase by approximately 1%, which assumes mid-single-digit growth in mobile, flat results for NBA 2K, and a decline for Grand Theft Auto Online. We expect GapNet revenue to range from $1.3 to $1.35 billion. Operating expenses are planned to range from $928 million to $938 million.
Speaker Change: Now moving on to our guidance for the fiscal first quarter.
Speaker Change: Protect net bookings to range from one two to $1 billion to $5 billion.
Speaker Change: Compared to $1 2 billion in the first quarter last year.
Speaker Change: I'd say for the quarter include substance key K 25 interacts with our record on early access for PC and NFL Teekay Playmakers, all of which have already released and Star Wars and Gary.
Largest contributor to net bookings are expected to be NBA TK, the Grand theft Auto series, Tim Glass empires, <unk> puzzles, and a hyper casual novel portfolio mass factory, the Red dead redemption, serrate purchase plans and Zynga Poker, we project, our current consumer spending to increase by approximately 1% which assumes mid single.
Speaker Change: <unk> growth in mobile flat results and ATK and it declined for Grand theft Auto online.
Speaker Change: We expect GAAP net revenue to range from one three to $1 $35 billion.
Speaker Change: Operating expenses are planned to range from $928 million to $938 million.
Strauss H. Zelnick: On a management basis, operating expenses are expected to grow by approximately 14% year-over-year, which is primarily driven by additional marketing for Match Factory, partially offset by our cost reduction program. In closing, we believe that we are very well positioned to deliver the highest quality content in our industry and to enhance our profitability as we grow our scale and maintain our focus on efficiency. We're extremely excited about our path to the future, and we look forward to sharing more details about the many catalysts ahead for our company. Thank you. I'll now turn the call back to Strauss.
Speaker Change: On a management basis operating expenses are expected to grow by approximately 14% year over year, which is primarily driven by additional marketing for Mac factory, partially offset by our cost reduction program.
Speaker Change: In closing, we believe that we are very well positioned to deliver the highest quality content in our industry and to enhance our profitability as we grow our scale and maintain our focus on.
Speaker Change: And efficiency, we are extremely excited about our path to the future and with authority sharing more details about the many catalysts ahead for our company. Thank you I'll now turn the call back to SaaS.
Speaker Change: Thanks, Lenny and Karl on behalf of our entire management team I'd like to thank our colleagues for their dedication to our business.
Operator: Thanks, Lainie and Karl. On behalf of our entire management team, I'd like to thank our colleagues for their dedication to our business and for creating the highest quality, most engaging entertainment franchises to captivate our global audiences. And to our shareholders, I want to express our appreciation for your continued support. I will now take your questions. Operator.
Speaker Change: And for creating the highest quality and most engaging entertainment franchises to captivate, our global audiences and to our shareholders I want to express our appreciation for your continued support.
Speaker Change: We'll now take your questions operator.
Speaker Change: Thank you we will now be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate that your line is in the question queue.
Operator: You will now be conducting a question-and-answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question queue.
Eric: And you may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question. Good afternoon. Thanks for the question. Strauss, I wonder if we could talk a little bit about the past, when you never really felt the need to own all of Gearbox. Here you are about to own all of Gearbox. Can you talk about how you think about now owning all of Gearbox? some of the opportunities that you'll have with that. Thanks, Eric.
Speaker Change: And you May press star two if you'd like to remove your question from the queue.
Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
Speaker Change: Our first question comes from the line of Eric Handler with Ross M. Can please proceed with your question.
Strauss H. Zelnick: What I was referring to was when asked whether Gearbox was sold to Embracer whether that caused us to have any concern, my response was no, because we have a long-term publishing agreement, and that's been mutually beneficial for our company and for Gearbox, as it was for Embracer. However, when the opportunity presented itself for us to acquire the company on terms that we felt were reasonable, we frankly jumped at the opportunity. We have all the respect in the world for Randy Pitchford and his team.
Speaker Change: Good afternoon, thanks for the question.
Eric Owen Handler: I Wonder if you could talk a little bit.
Speaker Change: About the gearbox acquisition in the past you've expressed.
Speaker Change: You never really felt the need to own all of gearbox here you are about to own all of the Airbus can you talk about how you think about now owning all of gearbox.
Speaker Change: Some of the opportunities that youll have attacks.
Speaker Change: Thanks, Eric.
Speaker Change: What I was referring to is when asked when gearbox was sold to embrace or whether that caused us to have any concern. My response was no. Because we are a long term publishing agreement that's been mutually beneficial.
Speaker Change: For our company and for gearbox and as it was for Embraceor. However, when the opportunity presented itself for us to acquire the company.
Speaker Change: Terms that we felt were reasonable we frankly jumped at the opportunity we have all the respect in the world for Randy Pitchford and his team. He has the ability to bring AAA products to market responsibly.
Strauss H. Zelnick: He has the ability to bring AAA products to market responsibly and at a very reliable and rather rapid cadence. And he's a hitmaker, and it's very hard to make a new hit, and Tiny Tino was a new hit.
Speaker Change: Very.
Speaker Change: Reliable and rather rapid cadence and he is a hitmakers.
Speaker Change: And it's very hard to make a new Hilton timing Chino, whereas the new head and of course borderlands just goes from strength to strength. So we're thrilled to have gearbox and the family.
Lainie Goldstein: And, of course, Borderlands just goes from strength to strength, so we're thrilled to have Gearbox in the family. And then, Lainie, with regard to... what you announced. How much of that should... Fiscal 25? So we'll start to see it in fiscal 25, but we'll see a full annualization of it in fiscal year 26. So the majority of the plan was executed in Q4 and Q1, but pieces of it will come through this year. Hey, thank you.
Speaker Change: Okay.
Speaker Change: Then leaning with regards to the <unk>.
Speaker Change: Annual cost savings.
Speaker Change: That you announced how much of that should be seen in fiscal 'twenty five.
Speaker Change: So it will start to see it in fiscal 'twenty five that will CFO annual station of it in fiscal year 'twenty six so the majority of the plan was executed in Q4 and Q1, but it's pieces of it will come through this year.
Speaker Change: Okay.
Speaker Change: And our next question comes from the line of Doug Kratz with TD Cowen. Please proceed with your question.
Speaker Change: Hey, Thank you.
Strauss H. Zelnick: The ability of Rolex to launch top 100 grossing games is a really pleasant surprise. I was just wondering if you could talk about how to think about the life cycle of those games. Typically, Rolex games are sort of, you know, they're hot for a while, and then they move on to something next, something else. Is this going to be the case for these monetizing games as well, or is it planned to have a longer life cycle? Thank you.
Speaker Change: The ability of Rowlock launched top 100, grossing games as a really pleasant surprise just wondering if you could talk about how to think about the lifecycle of those games typically rocks games or sort of.
Speaker Change: They're hot for a while and then they move on to something next something else is there.
Speaker Change: This is going to be the case for these monetizing games as well or is it planned to have a longer lifecycle. Thank you.
Strauss H. Zelnick: Undoubtedly, this so-called hybrid casual approach should lead to longer life cycles because the hyper-casual approach really was, you know, put it out there, get a bunch of downloads, offer a rather light experience, generate advertising revenue, and have the users move on to the next. And that was great while it lasted, but, you know, long-term entertainment businesses are all driven by great content. And Rolex is proving that it has the ability, with its partner studios, to do just that and to deliver content that is durable and long-lasting. It remains to be seen whether we can truly create forever franchises at Rolex. I believe we can.
Speaker Change: Undoubtedly this so called hybrid casual approach should lead to longer life cycles because of the hyper casual approach really was put it out there and get a bunch of downloads.
Speaker Change: Offer a rather light experience.
Speaker Change: Generate advertising revenue.
Speaker Change: The users move onto the next and that was great wall lasted but long term entertainment businesses are all driven by great content and <unk> proving that it has the ability with its partner studios to do just that and to deliver content that is durable and long lasting.
It remains to be seen whether we can truly create forever franchises at rollick.
Speaker Change: I believe we can we haven't done so yet, but we're off to a really good start.
Strauss H. Zelnick: We haven't done so yet, but we're off to a really good start. Thank you. Thank you. Good afternoon.
Thank you.
Speaker Change: Okay.
Speaker Change: And our next question comes from the line of Colin Sebastian with Baird. Please proceed with your question.
Colin Alan Sebastian: Thanks, Hey, good afternoon, maybe a couple from me I guess first off on on the change to the guidance and the outlook. What is what is your level of confidence Strauss in the calendar 'twenty five launched GTA six and is there any.
Colin: First off, on the change to the guidance and the outlook, what is your level of confidence, Strauss, in the calendar 25 launch of GTA 6? And is there anything else more specific you can talk about that's behind it? That postponement. And then secondly, on the high single-digit mobile growth, I'm curious how much of that is related to any recovery you're seeing broadly in mobile gaming, or is that more specific to the increase in marketing? and these titles that are outperforming your expectations. Thanks, Colin.
Colin Alan Sebastian: Anything else more specific you can talk about that's behind.
The postponement and then secondly on the high single digit mobile growth I'm curious how much of that is related to any recovery, you're seeing broadly in mobile gaming or is that more specific to the increase in marketing spend.
Speaker Change: And these titles that are that are outperforming your expectations.
For this year. Thank you.
Speaker Change: Thanks Collyn.
Strauss H. Zelnick: We actually narrowed the calendar down to the fall of 2025, and we feel really good about that release date. And, obviously, we feel great about the title that is to come. And with regard to mobile, what we do at Zynga, because we are a market leader, of course, is driven by the market in which we live. And it is gratifying that after a down year and then a slightly down year, we're heading into a flat up year for the industry.
Speaker Change: Well, we actually narrowed calendar 2025 to fall of 2025, and we feel really good about that release date, and obviously, we feel great about the title that has to come and with regard to mobile.
Speaker Change: What we do it because we are a market leader of course is driven by the market.
Speaker Change: Which we live and it is gratifying that after a down year, and then a slightly down year.
Speaker Change: We're heading into a flatter up year for the industry, obviously, though what's driving our expected results would be our hits, including match factory, which is performing really really well.
Strauss H. Zelnick: Obviously, though, what's driving our expected results would be our hits, including Match Factory, which is performing really, really well. And we said that we were spending a lot on UA in the fourth quarter, and that's turned out to be productive spending. All right, thank you.
Speaker Change: We said that we were spending a lot of UA in the fourth quarter, we did and that's turned out to be productive spending.
Speaker Change: Alright, thank you.
Speaker Change: The next question comes from the line of.
Speaker Change: Matthew cost with Morgan Stanley. Please proceed with your question.
Matthew Andrew Cost: Hi, everyone. Thanks for taking the question I.
Strauss H. Zelnick: Hi everyone, thanks for taking the question. I guess between the success you've had with Match Factory and some new launch titles, setting a release date for Star Wars Hunters, and then the incremental marketing behind mobile, it seems like there's definitely more momentum in that business, which is great to see. I guess when we think about your analytical framework for investing in the marketing behind mobile, what are you targeting from a margin or payback perspective, and when should we expect to see this investment turn into a profitable flow-through?
Speaker Change: I guess between the success you've had with Nash factory in new launch titles setting release date for Star Wars Hunters, and then the incremental marketing behind mobile it seems like there's definitely more momentum in that business, which is great to see I guess, when we think about your analytical framework for investing in the marketing behind mobile what are you.
Speaker Change: Targeting from a margin or payback perspective, and when should we expect to see this investment turned into profitable flow through from the mobile side.
Speaker Change: So I hope like everyone else. We look at these very same metrics, which is cost of acquisition.
Strauss H. Zelnick: So, like everyone else, we look at the very same metrics, which is the cost of acquisition, what kind of retention you expect, which is to say what kind of churn you get, the spending that you have on average, and therefore the lifetime value. And the longer a payback period you're willing to accept, of course, the more risk you take in those calculations, because they're all based on extrapolating from current data and past data, and they can change at any given time.
Speaker Change: What kind of retention you expect which is to say what kind of churn you get.
Speaker Change: The spending that you have on average and therefore, the lifetime value and the longer payback period, you are willing to accept of course, the more risk you take in those calculations because theyre all based on extrapolating from current data in past data and they can change at any given time so.
Strauss H. Zelnick: So I'm not prepared to share sort of our outside payback period. Suffice to say, though, that we want to have a great deal of confidence that we're looking at a positive LTV. Thank you.
Speaker Change: I'm not prepared to share sort of.
Speaker Change: Our outside payback period, suffice to say, though that we want to have a great deal of confidence that we're looking at a positive LTV.
Speaker Change: Great. Thank you and when would you expect to see mobile this investment that youre, making mobile flipped from a profit center driving incremental profit.
Strauss H. Zelnick: And when would you expect to see mobile, this investment that you're making in mobile, flip from a cost center to driving incremental profits? So, of course, our mobile division is profitable. I understand what you're asking, which is frankly just another way of asking the same question you asked before, which I declined to answer. However, I do give you extra credit points for rephrasing it in a way that I might be able to dive into it.
Speaker Change: So of course, our mobile division is profitable I understand what youre, asking about which is.
Speaker Change: Frankly, just another way of asking the same question asked before which I declined to answer however, I do give you extra credit points for rephrasing. It in a way that I might dive into it.
Speaker Change: However, so we don't share our exact payback periods, we do however.
Strauss H. Zelnick: So we don't share our exact payback periods. We do, however, tailor our user acquisition spending so that we expect a meaningfully positive LTV over a period of time so much so that we have confidence that even if we're wrong, we're not so wrong that we're not making money. I hope that clarifies it a bit.
Speaker Change: <unk>, our user acquisition spending so that we expect a meaningfully positive LTV and a period of time such that we have confidence that even if we're wrong. We're not so long that we're not making money I hope that clarifies it a bit.
Speaker Change: It does thank you.
Speaker Change: Our next question comes from the line of drew Crum with Stifel. Please proceed with your question.
Strauss H. Zelnick: Hey, thanks. Hey guys, good afternoon. So could you address your forecast for MBA 2K RCS in fiscal 25 for a slight increase? Is low single-digit growth the new normal for this going forward? Or is there something unique in fiscal 25 influencing that view?
Andrew Edward Crum: Okay. Thanks, Hey, guys. Good afternoon. So could you address your forecasts for MDA UK Rcs in fiscal 'twenty five for a slight increase.
Andrew Edward Crum: It's low single digits growth to new normal for this going forward or is there something unique in fiscal 'twenty five.
Andrew Edward Crum: Influencing that view thanks.
Speaker Change: So we absolutely expect growth and NBA and Thats not just on the Ics side, but also on a full game sales side as well.
Strauss H. Zelnick: Thanks. So we absolutely expect growth in NBA, and that's not just on the RCS side, but also on the full game sales side as well. This year is a little bit more challenging because we are still in the transition from Gen 8 to Gen 9, and Gen 9 is outperforming our expectations and doing fantastically well. I'd say we're a little bit more challenged on the Gen 8 side.
This year is a little bit more challenging because we are still in the transition from Gen X Gen nine and Jen <unk>.
Speaker Change: Outperforming our expectations and doing fantastically, well I'd say, we're a little bit more challenge on the G&A side.
Speaker Change: As we continued to transition I think we're going to see more tailwind and headwinds in that regard.
Strauss H. Zelnick: As we continue to transition, I think we're going to see more tailwinds than headwinds in that regard. And when you look at recurring consumer spending, when you look at it specifically as it relates to Gen 9, it's off the charts. It's fantastic.
Speaker Change: And when you look at the recurrent consumer spending.
Speaker Change: Typically when you look at it specifically as it relates to Gen <unk>.
Off the charges fantastic so we've seen significant growth there.
Speaker Change: So again I think we will have momentum just as we transition to gen nine and as people continue to engage more deeply in the game, we're going to continue to see very strong Rcs growth.
Speaker Change: Our next question comes from the line of Benjamin <unk> with Deutsche Bank. Please proceed with your question.
Speaker Change: Hey, guys. Thanks for the question.
Strauss H. Zelnick: We've seen significant growth there, and again, I think we will have momentum just as we transition to Gen 9, and as people continue to engage more deeply in the game, we're going to continue to see very strong RCS growth. Hey guys, thanks for the question. I was wondering if you guys could talk a little bit more about the change in bookings this year versus what you guys were talking about last quarter, how much comes from moving GTA versus any other shifts versus restructuring. And then, yeah, I guess I'll stop there.
Benjamin Soff: I was wondering if you guys could talk a little bit more about the change in bookings this year versus what you guys were talking about last quarter, how much comes from moving GTA versus any other shifts riches versus.
Speaker Change: The restructuring and then I.
I guess I'll stop there thanks.
Speaker Change: So for fiscal year 'twenty five the outlook reflects the narrowing of Rockstar Games' previously established window from the calendar 2020 back to policy mentioned there are also some other movements within the release schedule and also with our cost cutting plan that is also part of the overall results for that year.
Strauss H. Zelnick: So for fiscal year 25, the outlook reflects a narrowing of Rockstar Games' previously established window from the calendar 2025 to fall, as we mentioned. There were also some other movements within the release schedule and also with our cost-cutting plan that is also part of the overall results for that year. Got it. And then there's a housekeeping question.
Speaker Change: Got it and then a housekeeping question does your current outlook reflects the acquisition of gearbox or is that going to be updated next quarter. After its close.
Strauss H. Zelnick: Does your current outlook reflect the acquisition of Gearbox? Or is that going to be updated next quarter after it's, No, it's not included since the transaction hasn't closed yet. So we will expect to include it next quarter when we close. And we expect it to be slightly accretive to our management results. Okay, that's helpful.
Speaker Change: No. It's not included since the transaction Hasnt closed yet so we will expect to include it next quarter.
And we expect it to be slightly accretive to our management results.
Speaker Change: Okay. That's helpful. Thanks, guys.
Our next question comes from the line of Martin Yang with Oppenheimer. Please proceed with your question.
Strauss H. Zelnick: Thanks, guys, from the line of Martin Yates. Hi, thank you for taking my question. First question on GTA 6, with a narrow window of release, are there any associated changes to your plan regarding the live service portion? Rockstar hasn't given any details on what its expectations are for the release. It's been a wonderful trailer that they put out that broke the internet.
Zhihua Yang: Hi, Thank you for taking my question first question on statistics with a narrow window of release is there any.
Strauss H. Zelnick: And more news will come from Rockstar in the fullness of time. Thank you. I have a second question about NBAA.
Speaker Change: Associate changes to your plan regarding the life service proportion of GTH six.
Speaker Change: So Rockstar hasnt given any details on what its expectations are for the releases didn't wonderful trailer.
Speaker Change: They put out a broke the internet and more news will come from Rockstar and the fullness of time.
Speaker Change: Thank you.
Strauss H. Zelnick: How are NBA's transition challenges between console generations compared to other annually released titles on the market, either from 2K or from, you know, other external competitors, and do you attribute the challenges mostly to 2K or to others? I'm sorry, was your question about the transition from console generation from the last generation to this generation? Right. Okay.
Speaker Change: Second question on NBA.
Speaker Change: Paul is Mds transition challenges in between console generations compared to other annually release, new titles on the market either from.
Speaker Change: From <unk> or from other external.
Speaker Change: <unk>.
And do you attribute the challenges to mostly to two K oar to market.
Speaker Change: I'm sorry, what was your question about the transition from Gen console generation from the last transition this trend okay.
Speaker Change: So that's going back quite some time and frankly I don't have the exact figures in front of me, but generally speaking I would say that the delta between the games in this year that the Gen. Nine games Janet game is much broader and I think that Chris.
Strauss H. Zelnick: So that's going back quite some time, and frankly, I don't have the exact figures in front of me. But, generally speaking, I would say that the delta between the games this year, the Gen 9 game and the Gen 8 game, is much wider, and I think that creates a more obvious difference between the two, to do two games. And frankly, I can't even remember if we had two completely separate games back then. But in any case, the delta is quite significant this time around, so I would expect that the transition is more – the effect of the transition is more pronounced in this console generation. And I forgot your second question.
Speaker Change: That creates a more obvious difference between the two games and frankly I can't even remember if we had to completely separate games back then.
Speaker Change: In any case the Delta is quite significant this time around so I would expect that the transition is more.
Speaker Change: The effect of the transition is more pronounced in this console generation.
Speaker Change: I forget your second question.
Speaker Change: Was there another one on the strategic how does it compare to other studios with annual commentary.
Strauss H. Zelnick: How does it compare to other studios with any of the current titles? Yeah, we're not really commenting on our competitors. And most of our other studios, we don't have as much. NBA comes out every year, so you're going to see that transition more brightly. We don't have the same effect in most of our other games. Occasionally, we would, but they wouldn't be comparable games to the NBA anyway. And again, like I said, we don't really comment on our competitors and their experiences. Ace Trials, Carl. Strauss, in your prepared comments, you mentioned your expectations for the commercial impact, Guidance curious why not providing a medium term. You've done that before, and it feels like it is here.
Speaker Change: Yeah, we're not really commenting on our competitors.
Speaker Change: And most of our other studios, we don't have as much in the NBA comes out every every year, so you're going to see that transition where frankly, we don't have the same effect in most of our other games occasionally, but they wont be comparable games NBA anyway.
Speaker Change: And again like I said, we don't really comment about our competitors and their experiences.
Speaker Change: Thanks Scott.
Speaker Change: Our next question comes from the line of Mike Hickey with benchmark. Please proceed with your question.
Speaker Change: As Charles Carl Laney, Nicole Thanks for taking my questions Congrats on the quarter.
Josh: Josh in your prepared comments, you mentioned that your expectations for the commercial.
The impact from GTA, six and increased I'm, just curious if you could.
Speaker Change: Explain what's driving that optimism for the game.
Speaker Change: And then the <unk>.
Speaker Change: Second question on your guidance curious why here.
Speaker Change: Youre not providing medium term you done that before and it feels like here you have at least better visibility.
Speaker Change: The primary catalyst driving that growth.
Speaker Change: And then on 27 and tying into that question.
Strauss H. Zelnick: 27 tying into that. Thanks, Mike, for those questions. I think our confidence continues to increase just because Grand Theft Auto V continues to perform so well. We've now sold over 200 million units. Every quarter, we continue to be pleased by the ongoing sales of the full game. And engagement in the past fiscal year with Grand Theft Auto V was up about 35 percent, with Grand Theft Auto Online up about 23 percent. That's extraordinary growth at this stage of the game, more than 10 years after its initial release.
Speaker Change: I'm wondering.
Speaker Change: Where your confidence is that it can grow sequentially off.
Speaker Change: 26 is that sort of primarily the GTA ecosystem.
Speaker Change: The net growth in 'twenty, seven or is it a combination of that and other AAA games.
Elyse Thanks, guys.
Speaker Change: Thanks, Mike for those questions.
Speaker Change: I think our confidence continues to increase just because grand theft auto five continues to perform so well we've now sold in over 200 million units every quarter, we continue to be.
Speaker Change: Pleased by the ongoing sales of full game and engagement in the past fiscal year with <unk> <unk> was up about 35% with Grand theft Auto online was about 23% I believe.
Speaker Change: That's extraordinary growth at this stage of the game more than 10 years after the initial release.
Strauss H. Zelnick: So I think we feel as though the market's anticipation is at a fever pitch. And, of course, expectations are very high everywhere in this boardroom and all around the world for the perfection of what Rockstar typically delivers. In terms of your question, I think you're asking your second question, you know, why didn't we provide very specific guidance for a top line number going forward? And the answer is, generally speaking, we have not done that except when it was necessary to clarify where we felt the company was going.
Speaker Change: So I think we feel as though the market's anticipation is is that a fever pitch and of course expectations are very high everywhere and this and this boardroom and all around the world for.
Speaker Change: The perfection of what Rockstar typically delivers.
Speaker Change: In terms of your question I think you were asking and your second question why do we provide very specific guidance for a topline number going forward and the answer is generally speaking we have not done that except when it was necessary to clarify where we felt the company was growing we think that we're being very specific about this fiscal year and about <unk>.
Strauss H. Zelnick: We think now we're being very specific about this fiscal year and about the next couple of fiscal years by saying we expect, relating to your third question, sequential growth on the top line. And we think that pretty much answers the question.
Speaker Change: Couple of fiscal years by saying, we expect Larry to your third question sequential growth on topline and we picked up pretty much answers. The question. Finally, the second part of your third question is that driven by the GTA ecosystem. The answer is certainly we had expectations for that ecosystem.
Strauss H. Zelnick: Finally, the second part of your third question: is that driven by the GTA ecosystem? The answer is certainly yes, we have expectations for that ecosystem. And again, given that full game sales continue to be strong for GTA V this many years later, at the same time, we also have a number of other powerful releases coming, about which we're highly optimistic. And, of course, we have car hits in the marketplace. Match Factory is a huge hit and only increasing in popularity, from the line of Eric: Thanks so much for taking the question. Maybe if I could just ask a big picture question that's two parts.
Speaker Change: And.
Speaker Change: Again, given the full game sales continue to be strong for GTA. Five. This many years later at the same time, we also have a number of other powerful releases coming.
Speaker Change: About which were highly optimistic and of course, we have targets in the marketplace match factory is a huge hit and only accelerating.
Speaker Change: Okay. Thanks, Josh Good luck guys.
Speaker Change: Our next question comes from the line of Eric Sheridan with Goldman Sachs. Please proceed with your question.
Strauss H. Zelnick: When you come out of the activity you just went through in terms of re-evaluating your pipeline and looking at resource allocation across the organization, what were some of the key learnings on what the right mix of content is for you guys to meet your hurdle rate going forward? And what were some of the key learnings about how much of the resource allocation decisions are now setting the company up for a multi-year view? Or do you think there's going to be continued refinement as you look to marry resources and the IP pipeline in the years ahead? Thanks so much.
Eric James Sheridan: Thanks, so much for taking the question, maybe if I could just ask a big picture one thats two parts when you come out of the activity. You just went through in terms of reevaluating your pipeline and looking at resource allocation across the organization what were some of the key learnings on right. The right mix of content is for you guys to meet your hurdle rate going forward and what were some of the key.
Eric James Sheridan: Learnings of how much of the resource allocation decisions are.
Eric James Sheridan: Now setting the company up on a multi year view, where do you think youre going to be a continued refinement as you look to marry resources and the IP pipeline in the years ahead. Thanks, so much.
Strauss H. Zelnick: So in terms of looking at our pipeline, I mean, this is not really new to us, this is a process that we go through, that we've been going through for at least the last 17 years since I've been here, and, but what we, what we're looking for specifically around this, the look that we just took is that we understand in the industry right now that the biggest games are winning, and they're taking more share. And that's obviously a fact that we've noticed and take very seriously.
Speaker Change: So in terms of looking at our pipeline. This is not really new to US. This is a process that we go through that we've been going through for at least the last 17 years since I've been here.
Speaker Change: And but what we were looking for specifically around this.
Speaker Change: The look that we get.
Speaker Change: Is that we're looking we have look we understand in the industry right now that the biggest games are winning and theyre, taking more share and Thats, obviously a factor that.
Speaker Change: That wed notice and take.
Speaker Change: Take it very seriously.
Speaker Change: They were simply looking for those projects that we think have the highest per se.
Strauss H. Zelnick: We're simply looking for the projects that we think have the highest chance for commercial success and for critical success and going through and comb through the pipeline and then making the tough choices. It's always difficult to cancel any project, but in this context, it was something that was necessary and really part of our normalized process.
Speaker Change: Chance for commercial success and is a critical success.
Speaker Change: I'm going to I'm coming through those and coming through the pipeline and then making the tough choices is always difficult to cancel any projects, but in this context. It was something that was necessary and really part of our normalised process.
Strauss H. Zelnick: So we absolutely expect that that will continue in the future. This was a pretty tough look and a pretty big look, so I think most of that is behind us. But we will be adding and we will be subtracting over the next few years, and that's part of what we do. And it'll be both with the... We will continue to invest in new IP as well. That is not off the table for us. That's very important.
Speaker Change: So we can we absolutely expect that that will continue in the future. This was a pretty tough luck in a pretty pretty big lumps I think most of that is behind us, but we will be adding and we will be subtracting over the next few years and thats part of what we do and there'll be both.
Speaker Change: We will continue to invest in new IP as well that is not off the table for us. That's very importantly, that's the lifeblood of the industry and if you're not investing in new IP, We think it's a big state.
Strauss H. Zelnick: That's the lifeblood of the industry, and if you're not investing in new IP, we think it's a big mistake. I just had one question on GTA 6, this narrowing from calendar 25 to the fall of 25. Do you think there's an ancillary benefit to that of sort of syncing up with the holiday season? Or do you feel like GTA is such a powerful franchise that it really doesn't confer any sort of incremental benefits? While it probably doesn't matter, I think we'd all rather be in the release window that we're looking at now. Okay, thank you.
Speaker Change: Okay.
Speaker Change: Our next question comes from the line of Jason Bazinet with Citi. Please proceed with your question.
Jason Bazinet: I just had one question on GTE six this narrowing from calendar 'twenty five to the fall of 'twenty five.
Jason Bazinet: Do you think there is a.
Jason Bazinet: An ancillary benefit of that is sort of thinking up with the holiday season or do you feel like GTA is such a powerful franchise that it really doesn't confer any sort of incremental benefit.
Speaker Change: While it probably doesn't matter I think we'd all rather be in the release window that we're looking at now.
Speaker Change: Okay. Thank you.
Our next question comes from the line of James <unk> with Jefferies. Please proceed with your question.
Yes. Thank you for taking the question what have been some of our marks on the mobile side of the business you did call out the.
Strauss H. Zelnick: Yeah, thank you for taking the question. What have been some of the unlocks on the mobile side of the business? You did call out the better than expected results in Zynga's IT business, but I was just curious if there was anything you could say specifically on the advertising side of the business. Thank you.
Speaker Change: Better than expected results in Vegas, IP business, but just curious if theres anything you can say specifically on the advertising side of the business. Thank you.
Speaker Change: Look we have two important businesses within mobile in App purchases and advertising.
Strauss H. Zelnick: Look, we have two important businesses within mobile, in-app purchases and advertising, and they're both relevant. We took the hit on advertising as we rethought our hyper-casual business and turned it into a blended hybrid-casual business where there are in-app purchases as well. At the same time, we built up advertising inside mobile by putting advertising units in games that previously did not have them.
Speaker Change: They are both relevant we took the hit on advertising as we rethought, our hyper casual business and turned it into a blended hybrid casual business, where they are in app purchases as well at the same time, we built up advertising inside mobile by putting advertising units and games that previously did not have them.
Strauss H. Zelnick: In any case, advertising should be a meaningful growth area for us in the mobile business. With regard to in-app purchases, we have the same opportunities and limitations that any other mobile company has, and our ability to grow in-app purchases is driven by our ability to have people download and play hit titles. That's what we're focused on. Thank you.
Speaker Change: In any case advertising should be a meaningful growth area for us in the mobile business.
Speaker Change: With regards to in App purchases, we have the same opportunities and limitations or any other mobile company has and our ability to grow in our purchases is driven by our ability to have people download and play hit titles. That's what we're focused on.
Speaker Change: Thank you.
Speaker Change #100: The next question comes from the line of Clay Griffin with Moffett Nathanson. Please proceed with your question.
Speaker Change #101: Yes. Good afternoon. Thank you.
Strauss H. Zelnick: I'm curious if you guys would talk about the broader PC strategy. I know that there's just tons and tons of engagement, particularly for GTA on PC, but not all of that gets monetized. I think in the past you've described that as, you know, maybe it's a good thing to have that there. You don't necessarily need to monetize all of it, but there are some interesting products out there, Overwolf and the like.
Clayton Keever Griffin: I'm curious if you guys would talk about the broader PC strategy.
Speaker Change #103: There's just tons and tons of engagement, particularly for GTA on Tc not all of that gets monetized I think in the past you've disc.
Speaker Change #103: Describe that as maybe it's a good thing to have that there you don't necessarily need to monetize all of it but there are some interesting products out there over wolf and the like and so I'm. Just curious what you guys are seeing or thinking about your opportunity to unlock monetization on PC.
Strauss H. Zelnick: And so maybe I'm just curious what you guys are seeing or thinking about your opportunity to unlock monetization on. So we look at the PC platform as we do any platform, and it all starts with content, first and foremost. And we agree, it's a very powerful platform, and we've got some very strong third-party partners, and also the ability for us to sell directly to the consumer. So these are all compelling things for us, and we'll continue to develop and support the PC platform as long as the gamer's there. Wherever the gamer is, that's where we're going to be.
Speaker Change #104: So we look at the PC platform as we do with any of any platform and it all starts with content first and foremost and we agree it's a very powerful platform and we've got some very strong third party partners also the ability for us to.
Speaker Change #104: They sell directly to the consumer. So these are all compelling things for us and we will continue to develop and support the PC platform as long as the gamers there wherever the game or is that's where we're going to be and again I don't really see us looking at the PC monetization.
Strauss H. Zelnick: And again, I don't really see us looking at the PC modernization any differently than we would on any other platform. It really is more about game to game, you know, what works for certain games, what doesn't work for certain games, and the overarching edict that we live by is over-deliver on content, and the modernization will follow. Great. Thanks, Karl.
Speaker Change #104: Any differently than we would on any other platform. It really is more about games again, and what works for certain games, what doesn't work for certain games and the overarching.
Speaker Change #104: Edict that we led bias over deliver on content and the monetization will follow.
Speaker Change #105: Great. Thanks Carl.
Strauss H. Zelnick: And our next question comes from Chris Scholl. Great, thank you for taking the questions. We saw Rockstar announce a price increase for GTA+. I recognize it's been several years, but can you help us think through the rationale?
Speaker Change #106: And our next question comes from the line of Chris Shaw with UBS. Please proceed with your question.
Chris Shaw: Great. Thank you for taking the questions. We saw Rockstar announce a price increase for GTA plus I recognize it's been several years, but can you help us think through the rationale and as you look at Ta.
Strauss H. Zelnick: And as you look ahead to TA6, what are your latest thoughts around the pricing dynamics for the franchise or your portfolio in general as these games continue to get larger with more robust experiences? Thank you. Look, there's more content constantly being made available, and, you know, we really aim to deliver great value at any given time. We're so focused on delivering more value than what we charge, and that's sort of the rubric.
Chris Shaw: Six so what are your latest thoughts around the pricing dynamics for the franchise or your portfolio in general as these games continue to get larger with more robust experiences. Thank you.
Speaker Change #108: Look there's more content constantly being made available and we really aim to deliver great value at any given time, we're so focused on delivering more value than what we charge.
Alright, that's fair to the rubric and anytime we establish a price we want to make sure that it's good news for the consumer that the experience.
Strauss H. Zelnick: And any time we establish a price, we want to make sure that it's good news for the consumer, that the experience vastly over-delivers in the context of the cost. That's the goal. Great, thank you. Sure. I have two questions.
Vastly over delivers.
Speaker Change #108: In the context of the cost that's the goal.
Speaker Change #108: Okay.
Speaker Change #109: Great. Thank you.
Speaker Change #110: And our next question comes from the line of Omar <unk> with Bank of America. Please proceed with your question.
Strauss H. Zelnick: One on mobile, and then just one again on sequential growth. Is there any more color at all you can give us on how you're going to grow sequentially in Fiscal 27 after lapping just such a tough comp in Fiscal 26 when ETA-6 is going to launch? Counterintuitive, When I look back at the last two times Rockstar released a mega-title... You know, Red Dead Redemption and Fiscal 19, Fiscal 20 did not grow, and Grand Theft Auto V in fiscal 14.
Speaker Change #111: Sure I have two questions.
Omar: One on mobile and then just one again on <unk>.
Speaker Change #113: The sequential growth so.
Speaker Change #115: Is there any any more color at all you can give us on how youre going to grow sequentially in fiscal 'twenty seven after lapping just such a tough comp in fiscal 'twenty six.
Speaker Change #114: N G.
Speaker Change #116: <unk> six is going to going to launch it seems counterintuitive.
Speaker Change #117: When I look back at the last two times Rockstar released a mega title.
Red Dead redemption in fiscal 19 fiscal 'twenty does not grow.
Speaker Change #117: And Grand Theft auto five Grand theft auto five in fiscal 14.
Strauss H. Zelnick: Fiscal 15 was down 30%. I'm just kind of trying to square those couple of things there. Will it be Rockstar that continues to drive that sequential growth in fiscal 27? Any more color there would be really great.
Speaker Change #117: Fiscal 15 was down 30%.
Speaker Change #117: I'm, just kind of trying to trying to square those couple of things there.
Speaker Change #117: Will it be Rockstar that continues to drive that sequential growth in fiscal 'twenty seven.
Speaker Change #118: Any more color there would be really great.
Speaker Change #119: Yes Fair question I'll look the business has really changed.
Strauss H. Zelnick: Yeah, it's a fair question. Look, the business has really changed, and certainly since 2019, and absolutely since 2015, and in ways that are obvious now and in ways that we project in the future. The sequential growth is driven by our overall pipeline, and we're now a large and diversified company. And we do have GTA 6 coming.
Speaker Change #119: And since certainly since 2019.
Speaker Change #119: And absolutely since 2015 and and in ways that are obvious now in ways that we project in the future.
Speaker Change #119: The sequential growth is driven by our overall pipeline and we are now a large and diversified company.
Speaker Change #119: We do have GTA six coming we have great aspirations for GTA, six and as I said earlier, we've been selling full game.
Strauss H. Zelnick: We have great aspirations for GTA 6. And, as I said earlier, we've been selling full-game GTA 5s for over 10 years, and we continue to sell more in a given year than most other standalone releases sell in their first year, even at our big competitors' companies. So we actually think that there's a compelling case that full-game sales will continue to be robust for years to come. Equally, we have a pipeline, both announced and unannounced, that's very exciting.
GTA fives for over 10 years.
Speaker Change #119: We continue to sell more in a given year than most other standalone release of selling their first year.
Speaker Change #119: Given that our big competitors companies so.
Speaker Change #119: We actually think there is a compelling case.
Speaker Change #119: The full game sales, we will continue to be robust for years to come equally we have a pipeline both announced and unannounced. That's very exciting we've been annualized pipeline that will of course continue to come.
Strauss H. Zelnick: We have an annualized pipeline that will, of course, continue to come in that's quite significant. And we have a mobile business that we frankly feel has been right-sized, well-structured, and is now back in growth mode. And there's evidence of that in the performance of Match Factory, the performance of Toonblast, and the stable performance of many other big titles.
Speaker Change #119: Significant and we have a mobile business.
Speaker Change #119: We frankly feel has been right sized well structured.
Speaker Change #119: And is now back in growth mode.
Speaker Change #119: There is evidence of that the performance of match factory performance of <unk> and the stable performance of many other big titles.
Speaker Change #119: Theyre also geographical growth opportunities that we're very focused on we don't spend a lot of time talking about it puts a huge part of our strategy.
Strauss H. Zelnick: There are also geographical growth opportunities that we're very focused on. We don't spend a lot of time talking about them, but they're a huge part of our strategy. Our business and our competitors' businesses remain largely U.S. and Western Europe-focused.
Speaker Change #119: Our business and our competitors' businesses remain largely.
Speaker Change #119: U S and Western Europe focus and we think there are enormous opportunities for growth in Asia, India, and Africa, where we and everyone else who isn't located in those geographies.
Strauss H. Zelnick: And we think there are enormous opportunities for growth in Asia, India, and Africa, where we and everyone else who isn't located in those geographies are deeply underpenetrated. So there are numerous opportunities for growth, but to put your mind at ease, this isn't a number you stick a finger in your mouth and hold it in the air and hope for the best kind of number. This is driven by our release schedule and our pipeline.
Speaker Change #119: Our deeply underpenetrated. So there are numerous numerous opportunities for growth but.
Speaker Change #119: To remind it is.
Speaker Change #119: Isn't.
Speaker Change #119: Six fingers in your mouth and hold it in the air and hope for the best kind of number this is driven by our release schedule in our pipeline.
Speaker Change #119: Okay.
Strauss H. Zelnick: Okay, and along kind of the same lines, I think a lot of people are going to be super excited about GTA 5, and GTA 6 coming out. Do you make any assumptions about the perhaps re-acceleration of growth in the console installed base or console sales? You know, because your title may bring a lot of lapsed gamers back into the ecosystem in your fork. We're using IGDG's projections, which are pretty substantial. So for Gen 9, alone, their view is that there are about 81 million consoles worldwide currently. But that was at the end of last year.
Speaker Change #119: Along the same lines.
Speaker Change #119: A lot of people are going to be Super excited about GTA GTE six coming out.
Speaker Change #120: Do you make any assumptions about the perhaps a reacceleration of growth in the console installed base or console sales.
Speaker Change #120: Because your title May.
Speaker Change #120: Bringing a lot of lapsed gamers back into the ecosystem in your forecasts.
Speaker Change #120: Yes.
Speaker Change #121: We're using <unk> projections, which are pretty substantial so for gen. Nine alone. Their view is that there are about 81 million consoles worldwide. Currently that was at the end of the last year. They project that will rise to 111 by the end of this year and 175 by the end of 2027.
Strauss H. Zelnick: They project that it will rise to 111 by the end of this year and 175 by the end of 2027. Now, you know, we don't necessarily subscribe to or not subscribe to those views, but that shows an awful lot of growth. And we do expect a very significant attach rate. Thanks a lot.
Speaker Change #121: Now, we don't necessarily subscriber not subscribe to those views, but that shows an awful lot of growth and we do expect a very significant attach rate.
Speaker Change #122: Thanks, a lot I appreciate it.
Speaker Change #123: Thank you we have reached the end of our question and answer session and with that I would like to turn the floor back over to CEO Strauss zelnick for any closing comments.
Strauss H. Zelnick: I appreciate it. Before we sign off, I just want to thank everyone who works at Take-Two and all of our affiliates. These have been challenging times, and in addition to delivering hits, we've asked everyone to dig deep and make sure the business is highly efficient. Right? So that's challenging, and one of the most extraordinary things about our organization is the amazing morale and focus on the common good. We're here for our customers first and foremost, for our colleagues who deliver to our customers every day, and for our shareholders, and we're extraordinarily excited both about the position we're in, about the fiscal year in which we're currently operating, and about our amazing pipeline and the years ahead. Thank you for joining us today.
Strauss H. Zelnick: Before we sign off I, just want to thank everyone, who works at take two and all of our affiliates.
Strauss H. Zelnick: These have been challenging times and in addition to delivering hits, we've asked everyone to dig deep and make sure. The business is highly efficient right sized.
Strauss H. Zelnick: Challenging and one of the most extraordinary things about our organization is the amazing morale and.
Strauss H. Zelnick: Focus on the common good we're here for our customers for our first and foremost for our colleagues who deliver to our customers every day and for our shareholders.
Strauss H. Zelnick: And we're extraordinarily excited both about the position we're in about the fiscal year in which we're currently operating.
Strauss H. Zelnick: And about our amazing pipeline in the years ahead. Thank you for joining us today.
Speaker Change #124: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.
Okay.
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Operator: © BF-WATCH TV 2021, www. Take-Two Interactive Software, Yay!. ... [inaudible] ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? Greetings, and welcome to the Take-Two Fourth Quarter and Fiscal Year 2024 Earnings Call. At this time, all participants are in a listen-only mode.
Speaker Change #125: Greetings and welcome to the take two fourth quarter and fiscal year 2024 earnings call.
Speaker Change #126: At this time all participants are in a listen only mode.
Speaker Change #126: A brief question and answer session will follow the formal presentation.
Speaker Change #126: If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.
Speaker Change #126: As a reminder, this conference is being recorded.
Operator: A brief question... If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. Good afternoon. Thank you for joining our conference call to discuss our results for the fourth quarter and fiscal year 2024, the end of March 31, 2024. Today's call will be led by Strauss Zelnick, Take-Two's Chairman and Chief Executive Officer, Karl Slatoff, our President, and Lainie Goldstein, our Chief Financial Officer.
Speaker Change #127: It's now my pleasure to introduce your host Nicole <unk> Senior Vice President of Investor Relations and corporate communications.
Speaker Change #128: Thank you you may begin.
Good afternoon. Thank you for joining our conference call to discuss our results for the fourth quarter and fiscal year 2024 ended March 31, 2020 for today's call will be led by Strauss Zelnick take two's Chairman and Chief Executive Officer, Carl played out that President and many Goldstein, our chief financial officer will be available to answer your questions during the Q&A.
Speaker Change #128: Session following our prepared remarks.
Operator: We will be available to answer your questions during the Q&A session following our prepared remarks. Before we begin, I'd like to remind everyone that statements made during this call that are not historical facts are considered forward-looking statements under federal securities laws. These forward-looking statements are based on the beliefs of our management, as well as assumptions made by and information currently available to us. We have no obligation to update these forward-looking statements.
Speaker Change #129: Before we begin I'd like to remind everyone that statements made during this call that are not historical fact are considered forward looking statements under federal Securities laws. These forward looking statements are based on the beliefs about management as well as assumptions made by and information currently available to US we have no obligation to update these forward looking statements actual operating results may vary significantly.
Operator: Actual operating results may vary significantly from these forward-looking statements based on a variety of factors. These important factors are described in our filings with the SEC, including the company's most recent annual report on Form 10-K and quarterly report on Form 10-Q, including the risks summarized in the section entitled Risk Factors. I'd also like to note that, unless otherwise stated, all numbers we will be discussing today are GAAP, and all comparisons are year-over-year.
Speaker Change #129: These forward looking statements based on a variety of doctors. These important factors are described in our filings with the FTC, including the company's most recent annual report on Form 10-K, and quarterly report on Form 10-Q, including the risks summarized in the section entitled risk factors.
Speaker Change #129: Also like to note that unless otherwise stated all numbers, we will be discussing today are GAAP and all comparisons are year over year additional details regarding our actual results and outlook are contained in our press release, including the items that our management uses internally to adjust our GAAP financial results in order to evaluate our operating performance. That's release also contains a reconciliation.
Operator: Additional details regarding our actual results and outlook are contained in our press release, including the items that our management uses internally to adjust our GAAP financial results in order to evaluate our operating performance. Our press release also contains a reconciliation of any non-GAAP financial measure to the most comparable GAAP measure.
Speaker Change #129: If any non-GAAP financial measure to the most comparable GAAP measures. In addition to be opposed to dwell our website, a slide deck that visually presents our results and financial outlook, our press release and filings with the SEC may be obtained from our website at take two games Dot Com and now I'll turn the call over to Strauss.
Strauss H. Zelnick: In addition, we have posted on our website a slide deck that visually presents our results and financial outlook. Our press release and filings with the SEC may be obtained from our website at TakeTwoGames.com. Now, I'll turn the call over to Strauss.
Strauss H. Zelnick: Thanks, Nicole. Good afternoon, and thank you for joining us today. I'm pleased to report that we concluded Fiscal 2024 with strength, including net bookings of $1.35 billion, which exceeded the high end of our guidance range, contributing to our positive results with the outperformance of MBA 2K24, Zynga's in-app purchases led by Toon Blast and our newest hit, Match Factory, and the Red Dead Redemption and Grand Theft Auto series. During fiscal 2024, we generated net bookings With fiscal 2025 underway, our portfolio is gaining momentum, and we have many exciting releases planned for the year. We expect net bookings to be in the range of $5.55 to $5.65 billion, representing 5% year-over-year growth.
Strauss H. Zelnick: Thanks, Nicole good afternoon, and thank you for joining us today.
Strauss H. Zelnick: I'm pleased to report that we concluded fiscal 2020 forward strength, including net bookings of $135 billion, which exceeded the high end of our guidance range.
Speaker Change #130: Contributing to our positive results with the outperformance with NBA <unk> 'twenty for Zynga in App purchases led by term blast and our newest test match factory and.
Speaker Change #130: And the Red dead redemption, and Grand Theft Auto series.
Speaker Change #130: During fiscal 2024, we generated net bookings of $5 $33 billion, driven by our high quality titles and our ability to engage consistently our player communities.
Speaker Change #130: With fiscal 2025 underway our portfolio is gaining momentum and we have many exciting releases planned for the year, we expect net bookings to be in the range of 555 to $5 65 billion.
Speaker Change #130: Representing 5% year over year growth.
Strauss H. Zelnick: Our outlook reflects a narrowing of Rockstar Games' previously established window of calendar 2025 to the fall of calendar 2025 for Grand Theft Auto VI. We're highly confident that Rockstar Games will deliver an unparalleled entertainment experience, and our expectations for the commercial impact of the title continue to increase. As we release our groundbreaking pipeline, we expect to achieve tremendous growth, including sequential increases in net bookings in fiscal 2025-2026 and 2027. We've been executing our substantial cost reduction program, which we now anticipate will result in over $165 million of annual cost savings from our current and future expenses.
Speaker Change #130: Our outlook reflects a narrowing of Rockstar games' previously established window calendar 2025 to fall of calendar 2025 for Grand theft Auto sex.
Speaker Change #130: We're highly confident of Rockstar games will deliver an unparalleled entertainment experience and our expectations for the commercial impact of the title continues to increase.
Speaker Change #130: As we released our groundbreaking pipeline, we expect to achieve tremendous growth, including sequential increases in net bookings in fiscal 2025, 2026 and 2027.
Speaker Change #130: We've been executing our substantial cost reduction program. We now anticipate will result in over $165 million of annual cost savings from our current and future expenses.
Strauss H. Zelnick: This will enable us to run our business more efficiently and achieve greater operating leverage as our large-scale titles come to market. Now, turning to our performance during the quarter. NBA 2K24, which remains the number one basketball simulation experience in our industry, surpassed our expectations as players responded to our promotions, in-game content strategy, and updates within the season. To date, the title has sold over 9 million units. Engagement remains high, with nearly 2 million consumers playing daily.
Speaker Change #130: This will enable us to run our business more efficiently and achieve greater operating leverage as our large scale titles come to market.
Strauss H. Zelnick: Our industry-leading NBA 2K brand also continued to expand its audience through several innovative mobile experiences, including NBA 2K24 MyTeam, the new free-to-download mobile experience that allows players to sync progress between console and mobile devices as they play their favorite MyTeam modes on the go; NBA 2K Mobile, and NBA 2K24 Arcade Edition, which is consistently in the top five on Apple Arcade.
Speaker Change #130: Now turning to our performance during the quarter.
NBA <unk> 24, which remains the number one basketball simulation experienced in our industry surpassed our expectations as players responded to our promotions.
Speaker Change #130: Game content strategy and updates within seasons.
Speaker Change #130: To date the title has sold in over 9 million units.
Speaker Change #130: Engagement remains high with nearly 2 million consumers playing daily.
Speaker Change #130: Our industry, leading NDA Teekay brand also continued to expand its audience through several innovative mobile experiences, including NBA <unk> 'twenty for my team.
Speaker Change #130: The new free to download mobile experience that allows players to think progress between console and mobile devices as they play their favorite my team modes undergo NBA to UK mobile and NBA to K 24, our 10th edition, which is consistently in the top five on Apple arcade.
Strauss H. Zelnick: The Grand Theft Auto series delivered another fantastic quarter, partially driven by an array of free content updates for Grand Theft Auto Online, including new vehicles, drag races, holiday-themed items to celebrate the Lunar New Year and Valentine's Day, new Community Series jobs, and more. Unit sales for Grand Theft Auto V exceeded our forecast, and to date, the title has sold approximately 200 million units worldwide. We're thrilled that more than a decade after their initial releases, Grand Theft Auto V and Grand Theft Auto Online grew their audience size by an incredible 35% and 23%, respectively, for the full year. GTA V also reclaimed its top spot as the most-watched video game across all platforms, according to Stream Hatchet, thanks largely to the tremendous viewership from the series' thriving role-play community.
Speaker Change #131: The Grand Theft Auto series delivered another fantastic quarter, partially driven by an array of free content updates for Grand theft auto online, including new vehicles drag races holiday themed items to celebrate lunar new year on Valentine's day, New community series jobs or more.
Strauss H. Zelnick: Rockstar's premium subscription service, GTA Plus, also continues to grow, with membership for the quarter almost doubling over the same period in the prior year, as Rockstar continues to add valuable benefits to players. Red Dead Redemption 2 also surpassed our expectations and sold nearly 64 million units worldwide. We continue to expand the audience for the series, with Red Dead Redemption and Undead Nightmare recently added to the roster of games included within the GTA Plus library.
Speaker Change #131: Net sales for <unk> exceeded our forecast and to date. The title has sold in approximately 200 million units worldwide.
Speaker Change #131: We're thrilled that more than a decade after their initial releases Grand theft auto five Grand theft Auto online grew their audience size by an incredible 35% and 23% respectively for the full year.
Grand Theft auto five also reclaimed its top spot as the most watched video game across all platforms. According to stream Patrick Thanks, largely to the tremendous viewership from a series driving royalty community.
Speaker Change #131: <unk> premium subscription service GTA plus also continues to grow with membership for the quarter almost doubling over the same period in the prior year as Rockstar continues to add valuable benefits to players.
Red Dead redemption, two also surpassed our expectations and has sold in nearly 64 million units worldwide.
Speaker Change #131: We continue to expand the audience for the series with Red Dead redemption non debt Nightmare recently added to the roster of games included within the GTA plus library.
Strauss H. Zelnick: Borderlands 3 outpaced our forecast, and we're thrilled that Randy Pitchford and Gearbox Entertainment are slated to join efficiently 2K's renowned internal studios in the coming weeks. We've already identified many potential growth opportunities for the Borderlands series in Gearbox's catalog, which we plan to pursue once the studio is integrated into our organization. We're also excited to see growing buzz for the star-studded Borderlands feature film, which is planned for release by Lionsgate this summer.
Speaker Change #132: <unk> III outpaced our forecast and we're thrilled that Randy Pitchford gearbox entertainment are slated to join efficiently <unk>. We're now in the internal studios in the coming weeks, we've already identified many potential growth opportunities for the borderlands series and gearboxes catalog, which we plan to pursue once a sturdy.
Speaker Change #132: <unk> is integrated into our organization.
Speaker Change #132: We're also excited to see growing buzz for the star studded Borderlands feature film, which is planned for release by Lionsgate. This summer.
Strauss H. Zelnick: WWE 2K24 has been a resounding success and is the highest-rated sports simulation of 2024. The title is also the highest-rated installment in the history of our popular wrestling franchise on Xbox, with an 83 average Metacritic score.
Speaker Change #133: WWE WWE <unk> 24 has been a resounding success as the highest rated sports simulation of 2020 for.
Speaker Change #133: The title is also the highest rated installment in the history of our popular restaurant franchise on X box with an 83 average Metacritic score engagement has been exceptional with players logging over 11 million hours across more than 110 million played matches. In addition to 40 years of Wrestlemania pack has the highest attach rate for <unk>.
Strauss H. Zelnick: Engagement has been exceptional, with players logging over 11 million hours across more than 110 million played matches. In addition, the four years of WrestleMania PAC have had the highest saturation for a super deluxe DLC in the series history, with more than 25% of WWE 2K24 players owning it. 2K and Visual Concepts are continuing to support the title and will have additional packs launching throughout the fall. I'd like to thank our friends Nick Kahn and Ari Emanuel over at WWE, TKO, and WME for their continued support.
Speaker Change #133: Deluxe DLC and the series history with more than 25% of WWE <unk> for players that own it yet.
Speaker Change #133: <unk> and visual concepts are continuing to support the title and will have additional tax launching dropped 12 I'd.
Speaker Change #133: I'd like to thank our friends mid con and already Emmanuel over a WWE TKO in WMA for their continued support.
Strauss H. Zelnick: Additionally, I'd like to express our immense gratitude to our team at Visual Concepts for their outstanding work on our WWE 2K and NBA 2K franchises, which are both important annual contributors for our company. Zynga delivered outstanding results for the period, led by robust in-app purchases. Match Factory is accelerating and proving to be a hit, already establishing itself as a top-20 grossing game in the U.S. Apple App Store and reaching millions of new users with its launch on the Google Play Store.
Speaker Change #133: Additionally, I'd like to express our immense gratitude to our team and visual concepts for their outstanding work on our WWE UK and MBA two K franchises, which are both important annual contributors for our company.
Zynga delivered outstanding results for the period led by robust in App purchases match factory is accelerating and proving to be a hit already establishing itself as a top 20 grossing game in the U S. Apple App store and reaching millions of new users with its launch on the Google play store, we're pleased that <unk>.
Strauss H. Zelnick: We're pleased that new bold beats and other exciting features have propelled average daily playtime to around 60 minutes per user. Toon Blast maintained its positive momentum, achieving nearly 20% growth in in-app purchases compared to the third quarter, driven by a new Dragons Treasure competition and many other features. We'd like to congratulate the team at Peak for their incredible performance. Top Troops launched several content updates, as well as a major cross-media collaboration with the popular influencer MrBeast.
Speaker Change #133: Bold beats and other exciting features have propelled average daily play time, <unk> 68 minutes per user.
Speaker Change #133: <unk> maintained its positive momentum achieving nearly 20% growth within that purchases compared to the third quarter, driven by new Dragons Treasurer competition and many other features we'd like to congratulate the team at peaks for their incredible performance.
Speaker Change #133: Top troops launched several content updates as well as a major cross media collaboration with the popular Influencer Mr Beast.
Strauss H. Zelnick: The team plans to release additional enhancements to core gameplay and progression systems to drive further growth. Momentum continues to be strong, with the studio crossing 3.5 billion all-time downloads and announcing a new partnership with Mattel to introduce a mass-market Barbie mobile game later this calendar year. Our blended monetization efforts in Hypercasual are progressing well within Moloch, which has resulted in Twisted Tangle and Screw Jam both becoming top 100 grossing games on the U.S. Apple App Store.
Speaker Change #133: <unk> plans to release additional enhancements to core gameplay and progression systems to drive further growth.
Speaker Change #133: Momentum continues umbrella with the studio crossing $3 5 billion, all time downloads and announcing a new partnership with Mattel to introduce a mass market Barbie mobile game later this calendar year.
Speaker Change #133: Our blended monetization efforts on hyper casual are progressing well with <unk>, which has resulted in a twist to tangle unscrew jam, both becoming top 100 grossing games on the U S. Apple App store.
Strauss H. Zelnick: Our direct-to-consumer business continues to grow, and our teams are working actively to add more titles each quarter to this highly creative owned distribution channel. Looking ahead, Zynga has numerous titles in development and soft launch that we're eager to release worldwide this fiscal year, including Star Wars Hunters and Game of Thrones Legends. In closing, I'm highly confident in our business, led by our top creative talent, our industry-leading portfolio of owned intellectual property, our sound balance sheet, and our increasingly efficient infrastructure.
Speaker Change #133: Our direct to consumer business continues to grow and our teams are working actively to add more titles each quarter to this highly accretive owned distribution channel.
Speaker Change #133: Looking ahead Zynga has numerous titles in development and the soft launch that we're eager to have released worldwide. This fiscal year, including Star Wars hunters and game of Thrones lessons.
Speaker Change #133: In closing I'm highly confident in our business led by our top creative talent, our industry, leading portfolio of owned intellectual property, our sound balance sheet and our increasingly efficient infrastructure.
Strauss H. Zelnick: Our teams are laser-focused on our core tenets of creativity, innovation, and efficiency. And as we deliver our groundbreaking pipeline over the next several years, we're also poised to deliver industry-leading growth and shareholder returns. I'll now turn the call over to Karl.
Speaker Change #133: Our teams are laser focused on our core tenants of creativity innovation and efficiency and as we deliver our groundbreaking pipeline over the next several years, we're poised also to deliver industry, leading growth and shareholder returns.
Speaker Change #134: I'll now turn the call over to Carl.
Karl Slatoff: Thanks, Strauss. I'd like to thank our teams for their dedication and hard work as we continue to build the foundation for a future that we believe is more promising than ever. We are extremely excited about our upcoming pipeline, which includes approximately 40 titles through fiscal 2027. Our updated release schedule reflects the actions of our recent cost-reduction program, through which we canceled several titles to focus our efforts and resources on the franchises we believe represent our best opportunities to achieve significant critical and commercial success. These titles did not include any of our core franchises and were not expected to materially affect our net bookings growth.
Karl Slatoff: Thanks, Ross I'd like to thank our teams for their dedication and hard work as we continue to build the foundation for our future, which we believe is more promising than ever.
Karl Slatoff: We are extremely excited about our upcoming pipeline, which includes approximately 40 titles through fiscal 2027.
Karl Slatoff: Our updated release schedule reflects the actions.
Karl Slatoff: And cost reduction program to which we canceled several titles to focus our efforts and resources on the franchises. We believe represent our best opportunities to achieve significant critical and commercial success.
Karl Slatoff: These titles did not include any of our core franchises and are not expected to materially affect our net bookings growth.
Karl Slatoff: Turning to fiscal 2025, we have 16 titles in our pipeline, three of which have already been released. We have seven immersive core titles, including Top Spin, NBA, and WWE 2K25, and the next iteration of one of 2K's biggest and most beloved franchises, with the first details coming in just a few short weeks at Summer Games Fest Kickoff Live. Of these titles, Topsten 2K25 was released by 2K and Hanger 13 on April 26.
Karl Slatoff: Turning to fiscal 2025, we have 15 titles in our pipeline three of which has already been released.
Karl Slatoff: We have seven immersive core titles, including top spin NBA and WWE Teekay 25, and the next generation and one or two biggest and most beloved franchises with a first details coming in just a few short weeks at summer games past kickoff live.
Karl Slatoff: These titles <unk> 25 was released by Teekay and hangar 13 on April 26th.
Karl Slatoff: The revival of our popular tennis franchise has been well-received by critics and provides deep personalization, iconic venues, and industry-leading gameplay. With Topspin 2K25, we continue to broaden our sports offerings, and 2K will support the title with season packs throughout the year. We have two independent titles from Private Division, the first of which is Moon Studios' No Rest for the Wicked, which launched on April 18th for early access on PC. This new RPG was well-received for its visceral combat, distinct art style, and rich narrative.
Karl Slatoff: The revival of our popular tennis franchise has been well received by critics and provides deep personalization iconic venues and industry leading gameplay.
Karl Slatoff: The top spin <unk> 25, we continue to broaden our sports offerings and Teekay will support the title with Hayden impact throughout the year.
Karl Slatoff: We have two independent titles from private division the first of which is many studios no rest for the Wicked, which launched on April 18th and to early access on PC.
Karl Slatoff: Named ARPG was well received for additional combat distinct art style and rich narrative.
Karl Slatoff: Private Division, along with Weta Workshop, also announced Tales of the Shire, a Lord of the Rings game, which is planned for release later this year. The team has recently revealed a new trailer for this cozy, Hobbit-like sim, which is set in the Middle-Earth universe of J.R.R. Tolkien.
Karl Slatoff: Private division along with <unk> also announced tails of the Shire, our Lord of the rings game, which is planned for release later this year.
Karl Slatoff: The teams recently unveiled a new trailer for this cozy harvest lifespan.
Karl Slatoff: Which is set in the middle Earth Universe of Jr. Token.
Karl Slatoff: We have five mobile titles, including NFL 2K Playmakers, Star Wars Hunters, and Game of Thrones Legends. NFL 2K Playmakers was released on April 23rd by 2K and Cat Daddy Games for iOS and Android devices. In this non-simulation tactical card battle, players can collect NFL player cards to assemble an exciting roster while also experiencing a variety of game modes and features.
Karl Slatoff: We have five mobile titles, including NFL ticket plant acres Star Wars hunters and game of Thrones license.
Karl Slatoff: And about the Kate Playmakers was released on April 23rd by two K and Cat Daddy games for iOS and Android devices.
And then non stimulation tactical card battle players can collect NFL player cards to assemble an exciting roster. While also experiencing a variety of game modes and features.
Karl Slatoff: We're proud to add NFL 2K Playmakers to our ever-growing mobile portfolio in partnership with the NFL and the NFL Player Association. Lastly, we have two new iterations of prior releases planned for this year. As always, our labels will continue to provide new content and experiences that drive engagement and recurring consumer spending across many of our key offerings. Looking ahead, our pipeline for fiscal 2026 and 2027 has 24 titles planned, including 15 immersive core releases, six of which are sports simulation games.
Speaker Change #135: We're proud to add NFL, teekay playmakers to our ever growing level portfolio in partnership with the NFL and the NFL players Association.
Speaker Change #135: Lastly, we had two new iterations of prior releases planned for this year.
As always our labels will continue to provide new content and experiences that drive engagement and recurrent consumer spending across many of our key offerings.
Speaker Change #135: Looking ahead, our pipeline for fiscal 2026, and 2027 has 24 titles planned including 15 Msas core releases six of which are sports simulation games.
Karl Slatoff: One independent title, five mobile games, and three new iterations of previously released titles. In closing, we believe that the many opportunities ahead of us will deliver a period of meaningful long-term growth, margin expansion, and shareholder return. I'll now turn the call over to Lainie.
Speaker Change #135: Independent title five mobile games and three new iterations of previously released titles.
Speaker Change #135: In closing, we believe that the many opportunities ahead of us will deliver a period of meaningful long term growth margin expansion and shareholder returns.
Speaker Change #136: I'll now turn the call over to Lanny.
Lainie Goldstein: Thanks, Karl, and good afternoon, everyone. We delivered a strong finish to Fiscal 2024 and are entering Fiscal 2025 with momentum, including healthy trends across our key franchises. Throughout the year, we release successful head titles, engage players with a steady cadence of in-game content, and continue to position our organization for the long term. We have also strengthened our commitment to efficiency and made some decisions that, while difficult, will align our resources with the initiatives to which we have the highest levels of conviction.
Lanny: Thanks, Carl and good afternoon, everyone.
We do have a strong finish to fiscal 2024 are entering fiscal 2025 and momentum.
Lanny: <unk> healthy trends across our key franchises can.
Speaker Change #138: Throughout the year evenly successful title engage.
Speaker Change #138: Dedicating of in game content and continued to position our organization for the long term.
Speaker Change #138: We're also keeping our commitment to efficiency.
Speaker Change #138: 70 closings that log difficult line of recycling to the Netflix of reps, who have the highest levels of connection there.
Lainie Goldstein: We are confident that over time, these steps will drive our scale, enhance our margins, and deliver industry-leading returns for our shareholders. I'd like to thank our teams for their vision, passion, and dedication. Turning to our results, we delivered fourth-quarter net bookings of $1.35 billion, which was above our guidance range of $1.27 to $1.32 billion. This reflected better-than-expected results from MBA 2K24, Jimena's in-app purchases led by Toon Glass and Mash Factory, the Red Vedge Redemption series, and the Grand Theft Auto series. Current consumer spending declined 2% for the period and accounted for 79% of net bookings.
Speaker Change #138: We are confident that over time that will drive our scale enhance our margins and deliver industry, leading returns for our shareholders.
Lainie Goldstein: This was a bad-hour outlook driven by the outperformance of NBA 2K, Team Blast, and Match Factory. Recurring consumer spending declined for Grand Theft Auto Online, although it was up for Virtual Currency and GTA+. NBA 2K was in line with the prior year, and mobile increased slightly. During the quarter, we successfully launched WWE 2K24, which demonstrates 2K and visual concepts' ability to raise the bar further for our popular wrestling series. The gap in our revenue decreased 3% to $1.4 billion, while cost of revenue declined 24% to $930 million and included an impairment charge of $304 million related to acquired intangible assets. Operating expenses increased by 244% to $3.2 billion due to a goodwill impairment charge of $2.2 billion and $93 million of business reorganization expenses related to our recently announced cost reduction program.
Speaker Change #138: I'd like to thank our team for their.
Speaker Change #138: Passion and dedication turning to our results, we delivered fourth quarter net bookings of 135 billion.
Speaker Change #138: Bob Erich guidance range of one seven to one <unk> billion.
Speaker Change #138: This reflected better than expected results from MB ATK 24.
Speaker Change #138: In our practice led by Tim glass and that factory is that debt redemption date and the grants at RSA.
Speaker Change #138: <unk> spending declined 2% for the period and accounted for 79% of net bucket.
Speaker Change #138: This was above our outlook driven by the outperformance in the ATK, Tim Black and match factory. The current consumer spending declines Grand theft auto online about is absent practical currency and GTA.
Speaker Change #138: And Ian Teekay was inline with the prior year and novel increased slightly.
Speaker Change #138: During the quarter, we successfully launched WWE, <unk>, which demonstrate teekay and digital concept to body to raise the bar for a copy of our vaccine studies.
Speaker Change #138: GAAP net revenue decreased 3% to $1 4 billion.
Speaker Change #138: While cost of revenue declined 24% from $930 million and included an impairment charge of $204 million.
Related to acquired intangible assets.
Speaker Change #138: Operating expenses increased by 244% to two principal in di.
Speaker Change #138: Due to a goodwill impairment charge of $2 2 billion.
Speaker Change #138: And $92 million as business European based and expenses related to our recently announced cost reduction program.
Lainie Goldstein: On a management basis, operating expenses rose 20% year-over-year, which was slightly above our guidance due to higher personnel and IT expenses and professional fees. For fiscal 2024, we achieved net bookings of $5.33 billion, which was slightly above our revised guidance range of $5.25 to $5.3 billion. Recurrent consumer spending grew 2%, which exceeded our outlook and accounted for 78% of net bookings. The current consumer spending for mobile increased high signal digits, NBA 2K virtual currency, and seasons was up slightly, and grants a Strato Online virtual currency and GTA Plus membership with Slatt.
Speaker Change #138: On a management basis operating expenses rose, 20% year after year.
Speaker Change #138: Let's just slightly above our guidance due to higher personnel expenses and professional fees.
Speaker Change #138: The fiscal 2028.
We achieved net bookings of $5 3 billion.
Speaker Change #138: Which was slightly above our revised guidance range of $5 85 to $5 $3 billion. The current consumer spending grew 2%, which exceeded our outlook and accounted for 78% of net bookings.
Speaker Change #138: The current consumer spending from mobile increased high single digits, and BMC gateway to our client base and sequence was up slightly.
Slightly from Grand Theft auto online virtual currency in GTA plus membership was flat.
Lainie Goldstein: Non-GAAP-adjusted unrestricted operating cash flow was $42 million as compared to our outlook of approximately $100 million due to higher external developer advances, cash tax, and interest payments. We spent approximately $142 million on capital expenditures, primarily for game technology and office build-out. Gap net revenue was flat at $5.35 billion, and cost of revenue increased 1% to $3.1 billion, which included an impairment charge of $577 million related to acquired and financial assets. Operating expenses increased 69% to $5.8 billion due to an impairment charge of $2.3 billion related to Goodwill and a $105 million business reorganization charge related to our cost reduction program.
Speaker Change #138: non-GAAP adjusted unrestricted operating cash flow for $80 million as compared to our outlook of approximately $100 million due.
Speaker Change #138: Due to higher external it's about our advantage cash tax and interest payments. We spent approximately $142 million on capital expenditures, primarily for game technology and office build outs.
Speaker Change #138: GAAP net revenue was flat at 535 billion.
Speaker Change #138: And cost of revenue increased 1% to $2 1 billion.
Speaker Change #138: This included an impairment charge of $577 million.
Speaker Change #138: Related to acquired intangible assets.
Speaker Change #138: Operating expenses increased 69% to $5 8 billion due to an impairment charge of $2 3 billion.
Speaker Change #138: Related to goodwill and $105 million business reorganization charge related to our cost reduction program.
Lainie Goldstein: On a management basis, operating expenses rose 15% year-over-year and were slightly above our guidance due to the factors I mentioned earlier that affected the fourth quarter. Today, we've provided our outlook for fiscal 2025. We predict net bookings to range from $5.55 billion to $5.65 billion, which represents 5% growth over fiscal 2024. The largest contributors to net bookings are expected to be NBA 2K, the Grand Theft Auto series, Team Blast, Empires, and Puzzles, our hyper-casual mobile portfolio, Match Factory, the Red Dead Redemption series, and an unannounced immersive core title from 2K and Words with Friends. We expect recurrent consumer spending to be up approximately 3% compared to fiscal 2024 and to represent 76% of net bookings.
Speaker Change #138: On a management basis operating expenses rose 15%.
Speaker Change #138: Nightly above our guidance due to the factors I mentioned earlier that affected the fourth quarter.
Lainie Goldstein: Our current consumer spending forecast assumes high single-digit growth for mobile, a slight increase for NBA 2K, and a decline for Grand Theft Auto Online. We expect the net bookings breakdown from our labels to be roughly 50% Zynga, 31% 2K, 17% Rockstar Games, and 2% Other. And we forecast our geographic net bookings split to be about 60% United States and 40% International. We expect non-GAAP-adjusted, unrestricted operating cash flow to be an outflow of $200 million, and we plan to deploy approximately $140 million for capital expenditures, primarily for game technology and office build-out.
David: David provided our outlook for fiscal 2025, we project net bookings to range from 55556 5 billion.
David: Which represents 5% growth over fiscal 2024 and.
Speaker Change #140: The largest contributors to net bookings are expected to be NBA, Teekay <unk> Granta status, Gary Tim Black Empires, <unk> puzzles are hydro cash on novel portfolio, NASDAQ III does that get redemption, Gary and announcements of core Tyler from Teekay and words with friends.
Speaker Change #140: We expect the current consumer spending to be up approximately 3% compared to fiscal 2024 and could represent 76% of net bookings.
Speaker Change #140: Our current consumer spending forecast assumes high single digit growth in Marvel a slight increase for NBA <unk> and a decline for Grand theft Auto online, we expect the net bookings breakdown from our labor to be roughly 50%, saying that stayed 1% teekay, 17% Rockstar games and 10% other ameren forecast that.
Speaker Change #141: Thank you have a clean slate to about 60% United States and 40% International.
Speaker Change #141: We expect non-GAAP adjusted unrestricted operating cash balance to be an outflow of $200 million.
Speaker Change #141: And we plan to deploy approximately $140 million.
Speaker Change #141: Capital expenditures, primarily for game technology and office build out.
Lainie Goldstein: We expect GapNet revenue to range from $5.57 to $5.67 billion and cost of revenue to range from $2.43 to $2.46 billion. Turning to operating expenses, we recently implemented a cost reduction program that is expected to deliver over $165 million of annual cost savings across our entire business. As part of these efforts, we have eliminated several projects and developments that we did not anticipate would meet our financial benchmark. We also took actions to streamline our organizational structure, which reduced both existing headcount and future hiring needs.
Speaker Change #141: We expect GAAP net revenue to range from $5 five seven to $5 67 billion.
Speaker Change #141: And cost of revenue to range from $2 43 to $2 6 billion.
Speaker Change #141: Turning to operating expenses.
Speaker Change #141: Our recently implemented cost reduction program that is expected to deliver over $165 million the annual cost savings across our entire business.
Speaker Change #141: Part of these efforts we have eliminated several projects in development and we did not anticipate would meet our financial benchmarks. We also took actions to streamline our organizational structure.
Speaker Change #141: It's both existing head count and future hiring needs.
Lainie Goldstein: Our total operating expenses are expected to range from $3.56 to $3.58 billion, as compared to $5.83 billion last year. On a management basis, we expect operating expense growth of approximately 7% year-over-year, which is largely due to an increase in ongoing marketing support for Match Factory, as well as other mobile and immersive core launches planned for the year, partially offset by savings from our cost reduction program. Looking ahead, and as Strauss mentioned earlier, we have narrowed the previously established release window for Grand Theft Auto VI to the fall of calendar 2025 from calendar 2025.
Speaker Change #141: Our total operating expenses are expected to range from three five to $3 58 billion as compared to $5 $83 billion last year on a management basis, we expect operating expense growth of approximately 7% per year, which is largely due to an increase in ongoing marketing support in that factory as well as other.
Speaker Change #141: And in Mexico, <unk> launch is planned for the year, partially offset by savings from our cost reduction program.
Speaker Change #142: Looking ahead and as Jos mentioned earlier, we have narrowed the previously established release went out for granted status next to fall of calendar 2025 from calendar 2025.
Lainie Goldstein: As development advances, our confidence in the title and its potential commercial impact continues to grow. That said, we are not providing specific guidance beyond fiscal 2025, as our release schedule includes numerous titles each year, and even modest shifts can have a significant effect on results in any given period. Our outlook for the lifetime value of our pipeline remains as strong as ever, and we expect sequential growth and netbooking in fiscal 2025, 2026, and 2027. Now, moving on to our guidance for the fiscal first quarter. We projected that bookings would range from $1.2 to $1.25 billion compared to $1.2 billion in the first quarter last year.
Speaker Change #143: Development advances our confidence in the title and its potential commercial impacts continue to graph that said, we are not providing specific guidance beyond fiscal 2025 as our release schedule includes numerous titles ETF and even modest shifts can have significant impact on results in any given period.
Speaker Change #143: Our outlook for the lifetime value of our pipeline remains as strong as ever and we expect sequential growth in net bookings in fiscal 2025, 2026 and 2027 now.
Speaker Change #143: Now moving on to our guidance for the fiscal first quarter.
Speaker Change #143: Protect net bookings to range from one two to $1 billion to $5 billion.
Speaker Change #143: Compared to $1 2 billion in the first quarter last year.
Lainie Goldstein: Our release date for the quarter includes Stop Spin 2K25, No Rest for the Wicked on Early Access for PC, and NFL 2K Playmakers, all of which have already been released, and Star Wars Hunters. The largest contributors to Netbookings are expected to be NBA 2K, the Grand Theft Auto series, Team Blast, Empires and Puzzles, our hyper-casual mobile portfolio, Mass Factory, the Red Dead Redemption series, We project the current consumer spending to increase by approximately 1%, which assumes mid-single-digit growth in mobile, flat results for NBA 2K, and a decline for Grand Theft Auto Online. We expect GapNet revenue to range from $1.3 to $1.35 billion. Operating expenses are planned to range from $928 to $938 million.
Speaker Change #143: Our release slate for the quarter include stop spin key K 25 interacts with our record on early access for PC and NFL Teekay Playmakers, all of which have already released and Star Wars, Hungary largest contributor to net bookings are expected to be NBA TK, the Grand theft Auto series, Tim Glass Empire can.
Speaker Change #143: Our hyper casual novel portfolio mass factory, the Red Dead redemption, Terry words with friends and Zynga Poker, We project, our current consumer spending to increase by approximately 1%, which assumes mid single digit growth as novel flat results, Andy HEK and a decline for Grand theft Auto online.
Speaker Change #143: We expect GAAP net revenue to range from one three to $1 35 billion.
Speaker Change #143: Operating expenses are planned to range from $928 million to $938 million on a management basis operating expenses are expected to grow by approximately 14% year over year is primarily driven by additional marketing for Mac factory, partially offset by our cost reduction program.
Lainie Goldstein: On a management basis, operating expenses are expected to grow by approximately 14% year-over-year, which is primarily driven by additional marketing for Match Factory, partially offset by our cost reduction program. In closing, we believe that we are very well positioned to deliver the highest quality content in our industry and to enhance our profitability as we grow our scale and maintain our focus on efficiency. We're extremely excited about our path to the future, and we look forward to sharing more details about the many catalysts ahead for our company. Thank you. I'll now turn the call back to Strauss.
Speaker Change #143: In closing, we believe that we are very well positioned to deliver the highest quality content in our industry and to enhance our profitability as we grow our scale and maintain our focus.
Speaker Change #144: On efficiency, we are extremely excited about our path to the future and we look forward to sharing more details about the many catalysts ahead for our company. Thank you I'll now turn the call back to SaaS.
Strauss H. Zelnick: Thanks, Lainie and Karl. On behalf of our entire management team, I'd like to thank our colleagues for their dedication to our business and for creating the highest quality, most engaging entertainment franchises to captivate our global audiences. And to our shareholders, I want to express our appreciation for your continued support. We'll now take your questions. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question queue.
Thanks, blending and Karl on behalf of our entire management team I'd like to thank our colleagues for their dedication to our business and for creating the highest quality and most engaging entertainment franchises to captivate, our global audiences and to our shareholders I want to express our appreciation for your continued support.
Speaker Change #144: We'll now take your questions operator.
Speaker Change #145: Thank you we will now be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate that your line is in the question queue.
Speaker Change #145: And you May press star two if you'd like to remove your question from the queue.
Speaker Change #145: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
Speaker Change #146: Our first question comes from the line of Eric Handler with Ralph M. Can please proceed with your question.
Operator: And you may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question is, Good afternoon. Thanks for the question. Strauss, I wonder if we could talk a little bit about the Garibaldi, that you never really felt the need to own all of Gearbox. Sure, you are about to own all of Gearbox.
Speaker Change #147: Good afternoon, thanks for the question.
Eric Owen Handler: I Wonder if you could talk a little bit.
Speaker Change #148: About the gearbox acquisition in the past you've expressed.
Speaker Change #149: That you never really felt the need to own all of gearbox here you are about to own all of gearbox could you talk about how you think about now owning all of gearbox.
Operator: Can you talk about how you think about now owning all of Gearbox and some of the opportunities that you'll have with that? Thanks, Eric. What I was referring to was when Gearbox was sold to Embracer, whether that caused us to have any concern, my response was no, because we have a long-term publishing agreement, and that's been mutually beneficial for our company and for Gearbox, as it was for Embracer. However, when the opportunity presented itself for us to acquire the company on terms that we felt were reasonable, we frankly jumped at the opportunity.
Speaker Change #149: Some of the opportunities that youll have attacks.
Eric: Thanks, Eric.
Speaker Change #151: What I was referring to is when asked when gearbox was sold to embrace or whether that caused us to have any concern. My response was no because we are a long term publishing agreement.
Speaker Change #151: It's been mutually beneficial.
Speaker Change #151: For our company and for gearbox and what's her embraceor. However, when the opportunity presented itself for us to acquire the company.
Speaker Change #151: That we felt were reasonable we frankly jumped at the opportunity we have all the respect in the world for Randy Pitchford and his team.
Operator: We have all the respect in the world for Randy Pitchford and his team. He has the ability to bring AAA products to market responsibly and on a very reliable and rather rapid cadence. And he's a hit maker.
Speaker Change #151: <unk> to bring AAA products to market.
Possibly on a very.
Speaker Change #151: Reliable, rather rapid cadence and he's a hitmakers.
Strauss H. Zelnick: It's very hard to make a new hit, and Tiny Tino was a new hit. And of course, Borderlands just goes from strength to strength. So we're thrilled to have Gearbox in the family. Okay. And then, Lainie, with regard to...
Speaker Change #151: And it's very hard to make a new Hilton timing Chino, whereas the new head and of course borderlands just goes from strength to strength. So we're thrilled to have gearbox and the family.
Speaker Change #151: Okay.
Speaker Change #151: Then leaning with regards to the annual cost savings.
Lainie Goldstein: Annual Cost Savings that you announced. How much of that should be? and Cisco 25.
Speaker Change #152: That you announced how much of that should be seen in fiscal 'twenty five.
Lainie Goldstein: So we'll start to see it in fiscal 25, but we'll see a full annualization of it in fiscal year 26. So the majority of the plan was executed in Q4 and Q1, but pieces of it will come through this year. Hey, thank you.
Speaker Change #153: So we will start to see it in fiscal 'twenty, five, but we'll CFO annulus Asian of it in fiscal year 'twenty six so the majority of the plan was executed in Q4 and Q1, but pieces of it will come through this year.
Speaker Change #152: Okay.
Speaker Change #154: And our next question comes from the line of Doug Crudes with TD Cowen. Please proceed with your question.
Strauss H. Zelnick: The ability of Rolex to launch top 100 grossing games is a really pleasant surprise. I was just wondering if you could talk about how to think about the life cycle of those games. Typically, Rolex games are sort of, you know, they're hot for a while, and then they move on to something next, something else. Is this going to be the case for these monetizing games as well, or is it planned to have a longer life cycle? Thank you.
Speaker Change #155: Hey, Thank you.
Speaker Change #156: The ability of Rowlock launched top 100, grossing games as a really pleasant surprise just wondering if you could talk about how to think about the lifecycle of those games typically rollick games or sort of.
Speaker Change #157: They're hot for a while and then they move on to something next something else.
Speaker Change #158: Is this going to be the case for these monetizing games as well or is it planned to have a longer lifecycle. Thank you.
Strauss H. Zelnick: Undoubtedly, this so-called hybrid casual approach should lead to longer life cycles because the hyper-casual approach really was, you know, put it out there, get a bunch of downloads, offer a rather light experience, generate advertising revenue, and have the users move on to the next. And that was great while it lasted, but, you know, long-term entertainment businesses are all driven by great content. And Rolex is proving that it has the ability, with its partner studios, to do just that and to deliver content that is durable and long-lasting. It remains to be seen whether we can truly create forever franchises at Rolex. I believe we can. We haven't done so yet, but we're off to a really good start. Thanks. Good afternoon.
Speaker Change #159: Undoubtedly the so.
Speaker Change #160: So called hybrid casual approach should lead to longer life cycles, because of the hyper casual approach really was put it out there get a bunch of downloads offer a rather light experience.
Speaker Change #160: Generate advertising revenue.
Speaker Change #160: The users move onto the next and that was great while Alaska, but long term entertainment businesses are all driven by great content and relics proving that it has the ability with its partner studios to do just that and to deliver content that is durable and long lasting.
Speaker Change #160: It remains to be seen whether we can truly create forever franchises at rollick.
Speaker Change #160: I believe we can we haven't done so yet, but we're off to a really good start.
Speaker Change #160: Yes.
Speaker Change #161: Thank you.
Speaker Change #161: Okay.
Speaker Change #162: And our next question comes from the line of Colin Sebastian with Baird. Please proceed with your question.
Colin Alan Sebastian: Thanks, Good afternoon, maybe a couple for me I guess first off on on the change to the guidance and the outlook.
Colin: First off, on the change to the guidance and the outlook, what is your level of confidence, Strauss, in the calendar 25 launch of GTA 6? And is there anything else more specific you can talk about that's behind that? And then, secondly, on the high single-digit mobile growth, I'm curious how much of that is related to any recovery you're seeing broadly in mobile gaming, or is that more specific to the increase in marketing? and these titles that are outperforming your expectations. Thanks, Colin.
Colin Alan Sebastian: What is your level of confidence droughts and the calendar 'twenty five launch of GTA six and is there any anything else more specific you can talk about that's behind behind that postponement and then secondly on the high single digit mobile growth I'm curious how much of that is related to any recovery you're seeing broadly in mobile.
Colin Alan Sebastian: Or is that more specific to the increase in marketing spend and these titles that are that are outperforming your expectations.
Speaker Change #163: Part of this year. Thank you.
Strauss H. Zelnick: We actually narrowed the calendar down to the fall of 2025, and we feel really good about that release date. And, obviously, we feel great about the title that is to come. And with regard to mobile, what we do at Zynga, because we are a market leader, of course, is driven by the market in which we live. And it is gratifying that after a down year and then a slightly down year, we're heading into a flat up year for the industry.
Speaker Change #164: Thanks Collyn.
Speaker Change #165: We actually narrowed calendar 2025 to fall of 2025, and we feel really good about that release date, and obviously, we feel great about the title that has to come and with regard to mobile.
We do it because we are a market leader of course is driven by the market in which we live and it is gratifying that after a down year and then a slightly down year.
Speaker Change #165: Heading into a flatter up year for the industry, obviously, though what's driving our expected results would be our hits, including match factory, which is performing really really well.
Strauss H. Zelnick: Obviously, though, what's driving our expected results would be our hits, including Match Factory, which is performing really, really well. And we said that we were spending a lot on UA in the fourth quarter, and that's turned out to be productive spending. All right, thank you.
Speaker Change #165: We said that we were spending a lot of UA in the fourth quarter, we did and that's turned out to be productive spending.
Speaker Change #166: Alright, thank you.
The next question comes from the line of.
Speaker Change #167: Matthew cost with Morgan Stanley. Please proceed with your question.
Strauss H. Zelnick: Hi everyone, thanks for taking the question. I guess between the success you've had with Match Factory and some new launch titles, setting a release date for Star Wars Hunters, and then the incremental marketing behind mobile, it seems like there's definitely more momentum in that business, which is great to see. I guess when we think about your analytical framework for investing in the marketing behind mobile, what are you targeting from a margin or payback perspective, and when should we expect to see this investment turn into profitable flow through?
Speaker Change #168: Hi, everyone. Thanks for taking the question.
Matthew Andrew Cost: I guess between the success you've had with match factory in new launch titles setting release date for Star Wars Hunters, and then the incremental marketing behind mobile it seems like there is definitely more momentum in that business, which is great to see I guess, when we think about your analytical framework for investing in the marketing behind mobile what are you.
Speaker Change #169: Targeting from a margin or payback perspective, and when should we expect to see this investment turned into profitable flow through from the mobile side.
Strauss H. Zelnick: So, I hope, like everyone else, we look at the very same metrics, which is the cost of acquisition, what kind of retention you expect, which is to say what kind of churn you get, the spending that you have on average, and therefore the lifetime value. And the longer a payback period you're willing to accept, of course, the more risk you take in those calculations, because they're all based on extrapolating from current data and past data, and they can change at any given time.
Speaker Change #170: So I hope like everyone else, we look at the very same metrics, which is cost of acquisition.
Speaker Change #171: What kind of retention you expect which is to say what kind of churn you get.
Speaker Change #171: The spending that you have on average and therefore, the lifetime value and the longer payback period, you are willing to accept of course, the more risk you take in those calculations because they are all based on extrapolating from current data on past data and they can change at any given time so.
Strauss H. Zelnick: So, I'm not prepared to share sort of, you know, our outside payback period. Suffice to say, though, that we want to have a great deal of confidence that we're looking at a positive LTV. Thank you.
Speaker Change #171: I'm not prepared to share sort of.
Speaker Change #171: Our outside payback period.
Speaker Change #171: Suffice to say, though that we want to have a great deal of confidence that we're looking at a positive LTV.
Speaker Change #172: Great. Thank you and when would you expect to see mobile this investment that youre, making mobile flipped from a cost center GT driving incremental profit.
Strauss H. Zelnick: And when would you expect to see this investment that you're making in mobile flip from a cost center to driving incremental profit? So, of course, our mobile division is profitable. I understand what you're asking, which is, frankly, just another way of asking the same question you asked before, which I declined to answer. However, I do give you extra credit points for rephrasing it in a way that I might be able to dive into it.
Speaker Change #173: So of course, our mobile division is profitable I understand what youre, asking which is.
Speaker Change #173: Frankly, just another way of asking the same question asked before which I declined to answer however, I do give you extra credit points for rephrasing. It in a way that I might dive into it.
Speaker Change #173: However, so we don't share our exact payback periods, we do however take.
Strauss H. Zelnick: So we don't share our exact payback periods. We do, however, tailor our user acquisition spending so that we expect a meaningfully positive LTV over a period of time such that we have confidence that even if we're wrong, we're not so wrong that we're not making money. I hope that clarifies it a bit. Hey, thanks. Hey, guys. Good afternoon.
Speaker Change #173: Miller, our user acquisition spending so that we expect a meaningfully positive LTV and a period of time us such that we have confidence that even if we're wrong. We're not so long that we're not making money I hope that clarifies it a bit.
Speaker Change #174: It does thank you.
Our next question comes from the line of drew Crum with Stifel. Please proceed with your question.
Strauss H. Zelnick: So could you address your forecast for NBA 2K RCS and Fiscal 25 for a slight increase? Is low single-digit growth the new normal for this going forward, or is there something unique in Fiscal 25 influencing that view? Thanks.
Andrew Edward Crum: Okay. Thanks, Hey, guys. Good afternoon. So could you address your forecasts for NBA <unk> Rcs in fiscal 'twenty five for a slight increase.
Andrew Edward Crum: It's low single digits growth the new normal for this going forward or is there something unique in fiscal 'twenty five.
Andrew Edward Crum: Influencing that view thanks.
Speaker Change #175: So we absolutely expect growth and NBA and Thats not just on the <unk> side, but also on a full game sales side as well.
Strauss H. Zelnick: So we absolutely expect growth in NBA, and that's not just on the RCS side, but also on the full game sales side as well. This year is a little bit more challenging because we are still in the transition from Gen 8 to Gen 9, and Gen 9 is outperforming our expectations and doing fantastically well. I'd say we're a little bit more challenged on the Gen 8 side.
Speaker Change #176: This year, though.
Speaker Change #176: Little bit more challenging because we are still in the transition from Gen X Gen nine and Jen <unk>.
Speaker Change #176: Outperforming our expectations and doing fantastically, well I'd say, we're a little bit more challenge on the G&A side as we continue to transition I think we're going to see more tailwind and headwinds in that regard.
Strauss H. Zelnick: As we continue to transition, I think we're going to see more tailwinds than headwinds in that regard. And when you look at recurring consumer spending specifically, when you look at it specifically as it relates to Gen 9, it's off the charts. It's fantastic.
Speaker Change #176: And when you look at the recurring consumer spending.
Speaker Change #176: Typically when you look at it specifically as it relates to Gen <unk>.
Speaker Change #176: If the charge is fantastic so we've seen significant growth there.
Strauss H. Zelnick: We've seen significant growth there. So again, I think we will have momentum just as we transition to Gen 9, and as people continue to engage more deeply in the game, we're going to continue to see very strong RCS growth. Hey guys, thanks for the question.
Speaker Change #176: So again I think we will have momentum just as we transition to gen nine and as people continue to engage more deeply in the game, we're going to continue to see very strong Rcs growth.
Speaker Change #177: Our next question comes from the line of Benjamin <unk> with Deutsche Bank. Please proceed with your question.
Speaker Change #178: Hey, guys. Thanks for the question.
Strauss H. Zelnick: I was wondering if you guys could talk a little bit more about the change in bookings this year versus what you guys were talking about last quarter. How much comes from moving GTA versus any other shifts versus restructuring? And then, yeah, I guess I'll stop there.
Benjamin Soff: I was wondering if you guys could talk a little bit more about the change in bookings this year versus what you guys were talking about last quarter, how much comes from moving GTA versus any other shifts riches versus.
Benjamin Soff: The restructuring and then I guess I'll stop there. Thanks.
Strauss H. Zelnick: So, for fiscal year 25, the outlook reflects a narrowing of Rockstar Games' previously established window from the calendar 2025 to fall, as we mentioned. There were also some other movements within the release schedule and also with our cost-cutting plan that is also part of the overall results for that year. Got it. And then there is a housekeeping question. Does your current outlook reflect the acquisition of Gearbox, or is that going to be updated next quarter after? No, it's not included since the transaction hasn't closed yet.
Speaker Change #179: So for fiscal year 'twenty five the outlook reflects the narrowing of Rockstar Games' previously established window from the calendar 2020 back to policy mentioned there are also some other movements within the release schedule and also with our cost cutting plan that is also part of the overall results for that year.
Speaker Change #180: Got it and then a housekeeping question does your current outlook reflects the acquisition of gearbox or is that going to be updated next quarter. After its close.
Strauss H. Zelnick: So we will expect to include it next quarter when we close, and we expect it to be slightly creative in our management results. Okay, that's helpful.
Speaker Change #181: No. It's not included since the transaction Hasnt closed yet so we will expect to include it next quarter.
Speaker Change #182: And we expect it to be slightly accretive to our management results.
Speaker Change #183: Okay. That's helpful. Thanks, guys.
Speaker Change #184: Our next question comes from the line of Martin Yang with Oppenheimer. Please proceed with your question.
Zhihua Yang: Hi, Thank you for taking my question first question on statistics with a narrow window of release is there any.
Strauss H. Zelnick: Thanks, guys, from the line of Martin Yates. Hi, thank you for taking my question. First question on GTA 6, with a narrowed window of release, is there any... Associate changes to your plan regarding the live service portion?
Zhihua Yang: Associated changes to your plan regarding our live service proportion of GTH seats.
Speaker Change #185: So Rockstar hasnt given any details on what its.
Strauss H. Zelnick: So Rockstar hasn't given any details on what its expectations are for the release. It's been a wonderful trailer that they put out that broke the internet, and more news will come from Rockstar in the fullness of time. Thank you. I have a second question about NBA.
Speaker Change #186: Patients are for the releases been wonderful trailer.
Speaker Change #187: They put out a broke the internet and more news will come from Rockstar and the fullness of time.
Speaker Change #188: Thank you.
Speaker Change #189: Second question on NBA.
Strauss H. Zelnick: How are NBA's transition challenges between console generations compared to other annually released titles on the market, either from 2K or from, you know, other external competitors, and do you attribute the challenges mostly to 2K or to others? I'm sorry, was your question about the transition from console generation from the last generation to this generation? Right. Okay. So, that's going back quite some time, and frankly, I don't have the exact figures in front of me.
How old is Mds transition challenges in between console generations compared to other annually release.
Speaker Change #189: <unk> on the market either from.
Speaker Change #189: From <unk> or from other external competitors.
Speaker Change #190: Do you attribute the challenges to wall street to TK or to market.
I'm sorry, what was your question about the transition from Gen console generation from the last transition this trend okay.
Speaker Change #191: So that's going back quite some time and frankly I don't have the exact figures in front of me, but generally speaking I would say that the delta between the games and this year. The Gen. Nine games Janet game is much broader and I think that creates.
Strauss H. Zelnick: But generally speaking, I would say that the delta between the games this year, the Gen 9 game and the Gen 8 game, is much broader, and I think that creates a more obvious difference between the two, to do two games. Frankly, I can't even remember if we had two completely separate games back then.
Speaker Change #191: That creates a more obvious difference between the two games and frankly I can't even remember if we had to completely separate games back then.
Strauss H. Zelnick: But in any case, the delta is quite significant this time around, so I would expect that the transition is more – the effect of the transition is more pronounced in this console generation. And I forget your second question. Was there another one?
Speaker Change #191: But in any case the delta is quite significant this time around so I would expect that the transition is more.
Speaker Change #191: The effect of the transition is more pronounced in this console generation.
Speaker Change #191: And I forget your second question.
Speaker Change #192: Or is there another one on the strategic how does it compared to other studios with annual commentary.
Strauss H. Zelnick: How does it compare to other studios with any of the current titles? Yeah, we're not really commenting on our competitors. And most of our other studios, we don't have as much because NBA comes out every year, so you're going to see that transition more brightly. We don't have the same effect in most of our other games. Occasionally, we would, but they wouldn't be comparable games to the NBA anyway. And again, like I said, we don't really comment about our competitors and their experiences. Ace Trials Crawl. Strauss in your prepared, at your expectations for the commercial impact, not providing a medium term. You've done that before, and it feels like it's happening here.
Yes, we're not really commenting on our competitors.
Speaker Change #192: And most of our other studios, we don't have as much in the NBA comes out every every year, so you're going to see that transition where frankly, we don't have the same effect in most of our other games occasionally, but they wont be comparable games NBA anyway.
Speaker Change #192: And again like I said, we don't really comment about our competitors and their experiences.
Speaker Change #193: Thanks, Kevin.
Speaker Change #194: Our next question comes from the line of Mike Hickey with benchmark. Please proceed with your question.
Speaker Change #195: Strauss Karl Laney, Nicole Thanks for taking my questions Congrats on the quarter.
Josh Good: Josh in your prepared comments, you mentioned that your expectations for the commercial.
Speaker Change #197: The impact from GTA, six and increased I'm, just curious if you could.
Speaker Change #198: Explain whats driving that opt enthusiasm for the game.
Speaker Change #199: And then the second question on your guidance curious why here.
Speaker Change #200: Youre not providing medium term you've done that before and it feels like here you have at least better visibility.
Speaker Change #201: The primary catalyst driving that growth.
Speaker Change #202: And then on 2007 and tying into that question.
Speaker Change #203: I'm wondering where your confidence is like in growth sequentially.
Speaker Change #204: 26 is that sort of primarily the GTA ecosystem.
Speaker Change #205: Having that growth from 2007 or is a combination of that and other AAA games that you cannot release thanks guys.
Strauss H. Zelnick: 27, tying into that. Thanks, Mike, for those questions. I think our confidence continues to increase just because Grand Theft Auto V continues to perform so well. We've now sold over 200 million units. Every quarter, we continue to be pleased by the ongoing sales of the full game. And engagement in the past fiscal year with Grand Theft Auto V was up about 35 percent, with Grand Theft Auto Online up about 23 percent. That's extraordinary growth at this stage of the game, more than 10 years after its initial release.
Speaker Change #206: Thanks, Mike for those questions.
Speaker Change #207: I think our confidence continues to increase just because grand theft auto five continues to perform so well we've now sold in over 200 million units every quarter, we continue to be.
Speaker Change #207: Pleased by the ongoing sales of full game and engagement in the past fiscal year with Grand Theft Auto fire was up about 35% with Grand theft Auto online was up about 23% I believe.
Speaker Change #207: That's extraordinary growth at this stage of the game more than 10 years after the initial release.
Speaker Change #207: So I think we feel as though the market's anticipation is is that a fever pitch.
Strauss H. Zelnick: So, I think we feel as though the market's anticipation is at a fever pitch. And, of course, expectations are very high everywhere in this boardroom and all around the world for the perfection of what Rockstar typically delivers. In terms of your question, I think you're asking your second question, you know, why didn't we provide very specific guidance for a top-line number going forward? And the answer is, generally speaking, we have not done that except when it was necessary to clarify where we felt the company was going.
Speaker Change #207: And of course, our expectations are very high everywhere and this and this boardroom and all around the world for.
The perfection of what Rockstar typically delivers.
Speaker Change #208: In terms of your question I think you were asking and your second question why do we when we provide very specific guidance for a topline number going forward and the answer is generally speaking we have not done that except when it was necessary to clarify where we felt the company was going we think that we're being very specific about this fiscal year and about.
Strauss H. Zelnick: We think now we're being very specific about this fiscal year and about the next couple of fiscal years by saying we expect, relating to your third question, sequential growth on the top line. And we think that pretty much answers the question.
Speaker Change #208: Couple of fiscal years by saying, we expect relating to your third question sequential growth on top line and we think that pretty much answers. The question. Finally, the second part of your third question is that driven by the GTA ecosystem. The answer is certainly we had expectations for that ecosystem.
Strauss H. Zelnick: Finally, the second part of your third question: is that driven by the GTA ecosystem? The answer is certainly yes, we have expectations for that ecosystem. And, again, given that full-game sales continue to be strong for GTA V this many years later, at the same time, we also have a number of other powerful releases coming, about which we're highly optimistic. And, of course, we have car hits in the marketplace. Match Factory is a huge hit and only increasing in popularity, from the line of Eric...
Speaker Change #208: And.
Speaker Change #208: Again, given the full game sales continue to be strong for GTA. Five. This many years later at the same time, we also have a number of other powerful releases coming.
Speaker Change #208: About which were highly optimistic and of course, we have targets in the marketplace match factory is a huge head and only accelerating.
Speaker Change #209: Thanks, Thanks, Josh Good luck guys.
Speaker Change #210: Our next.
Speaker Change #211: Comes from the line of Eric Sheridan with Goldman Sachs. Please proceed with your question.
Strauss H. Zelnick: Thanks so much for taking the question. Maybe if I could just ask a big picture question that's got two parts. When you come out of the activity you just went through in terms of re-evaluating your pipeline and looking at resource allocation across the organization, what were some of the key learnings on what the right mix of content is for you guys to meet your hurdle rate going forward? And what were some of the key learnings on how much of the resource allocation decisions are now setting the company up for a multi-year view? Or do you think there's going to be continued refinement as you look to marry resources and the IP pipeline in the years ahead? Thanks so much.
Eric James Sheridan: Thanks, so much for taking the question, maybe if I could just ask a big picture one thats two parts when you come out of the activity. You just went through in terms of reevaluating your pipeline and looking at resource allocation across the organization what were some of the key learnings on right. The right mix of content is for you guys to meet your hurdle rate going forward and what were some of the key.
Eric James Sheridan: Learnings of how much of the resource allocation decisions are.
Eric James Sheridan: Now setting the company up on a multi year view, where do you think youre going to be a continued refinement as you look to marry resources and the IP pipeline in the years ahead. Thanks, so much.
Strauss H. Zelnick: So in terms of looking at our pipeline, I mean, this is not really new to us, this is a process that we go through, that we've been going through for at least the last 17 years since I've been here, and but what we, what we're looking for specifically around this. The look that we just took is that, in the industry right now, the biggest games are winning, and they're taking more share.
Speaker Change #212: So in terms of looking at our pipeline. This is not really new to US. This is a process that we go through that we've been going through for at least the last 17 years since I've been here.
Speaker Change #212: And but what we were looking for specifically around this.
Speaker Change #212: The look that we get.
Speaker Change #212: Is that we're looking at we don't look we understand in the industry right now that the biggest games are winning and theyre, taking more share and Thats, obviously a factor that.
Strauss H. Zelnick: And that's obviously a fact that we've noticed and take very seriously. We're simply looking for the projects that we think have the highest chance for commercial success and for critical success, going through and combing through the pipeline, and then making the tough choices. It's always difficult to cancel any project, but in this context, it was something that was necessary and really part of our normalized process.
That wed notice and take.
Speaker Change #212: Take it very seriously.
And we're simply looking for the projects that we think have the highest cash.
Cash for commercial success and is a critical success.
Speaker Change #212: Two of them coming through those and coming through the pipeline and then making the tough choices is always difficult to cancel any projects, but in this context. It was something that was necessary and really part of a normalized process. So.
Strauss H. Zelnick: So we absolutely expect that that will continue in the future. This was a pretty tough look and a pretty big look, so I think most of that is behind us. But we will be adding and we will be subtracting over the next few years, and that's part of what we do. And we will continue to invest in new IP as well. That is not off the table for us. That's very important.
Speaker Change #212: We can take we absolutely expect that that will continue in the future. This was a pretty tough luck in a pretty pretty big love. So I think most of that is behind us.
Speaker Change #212: But we will be adding and we will be subtracting over the next few years and Thats part of what we do and it will be both.
Speaker Change #212: We'll continue to invest in new IP as well that is not off the table for us that's very importantly, that's the lifeblood of the industry and if you're not investing in new IP, We think it's a big state.
Strauss H. Zelnick: That's the lifeblood of the industry, and if you're not investing in new IP, we think it's a big mistake. I just had one question on GTA 6, this narrowing from calendar 25 to the fall of 25. Do you think there's an ancillary benefit to that of sort of syncing up with the holiday season?
Speaker Change #212: Okay.
Speaker Change #213: Our next question comes from the line of Jason Bazinet with Citi. Please proceed with your question.
Strauss H. Zelnick: Or do you feel like GTA is such a powerful franchise that it really doesn't confer any sort of incremental benefits? While it probably doesn't matter, I think we'd all rather be in the release window that we're looking at now. Okay, thank you.
Jason Boisvert Bazinet: I just had one question on GTE six this narrowing from calendar 'twenty five to the fall of 'twenty five.
Jason Boisvert Bazinet: Do you think there is.
Jason Boisvert Bazinet: An ancillary benefit of that is sort of thinking up with the holiday season or do you feel like GTA is such a powerful franchise that it really doesn't confer any sort of incremental benefit.
Speaker Change #215: While it probably doesn't matter I think we would all rather be in the release window that we're looking at now.
Speaker Change #216: Okay. Thank you.
Speaker Change #217: Our next question comes from the line of James <unk> with Jefferies. Please proceed with your question.
Strauss H. Zelnick: Yeah, thank you for taking the question. What have been some of the unlocks on the mobile side of the business? You did call out the better than expected results in saying it's an IP business, but I was just curious if there was anything you could say specifically on the advertising side of the business. Thank you.
Speaker Change #218: Yes. Thank you for taking the question what have been some of the unlocks the mobile side of the business you did call out the.
Speaker Change #219: Better than expected results in Zhang is IP business, but just curious if theres anything you could say specifically on the advertising side of the business. Thank you.
Strauss H. Zelnick: Look, we have two important businesses within mobile, in-app purchases and advertising, and they're both relevant. We took a hit on advertising as we rethought our hyper-casual business and turned it into a hybrid-casual business where there are in-app purchases as well. At the same time, we built up advertising inside mobile by putting advertising units in games that previously did not have them. In any case, advertising should be a meaningful growth area for us in the mobile business.
Speaker Change #220: Look we have two important businesses within mobile in App purchases and advertising.
Speaker Change #220: They are both relevant we took a hit on advertising as we rethought, our hyper casual business and turned it into a blended hybrid casual business, where there are purchases as well at the same time, we built up advertising inside mobile by putting advertising units and games that previously did not have them, but in any case advertise.
<unk> should be a meaningful growth area for us in the mobile business.
Strauss H. Zelnick: With regard to in-app purchases, we have the same opportunities and limitations that any other mobile company has, and our ability to grow in-app purchases is driven by our ability to have people download and play hit titles. That's what we're focused on. Thank you.
Speaker Change #220: With regard to in App purchases, we have the same opportunities and limitations or any other mobile company has and our ability to grow in our purchases is driven by our ability to have people download and play to hit titles. That's what we're focused on.
Thank you.
Speaker Change #221: The next question comes from the line of Clay Griffin with Moffett Nathanson. Please proceed with your question.
Speaker Change #222: Yes. Good afternoon. Thank you.
Strauss H. Zelnick: I'm curious if you guys would talk about the broader PC strategy. I know that there's just tons and tons of engagement, particularly for GTA on PC, but not all of that gets monetized. I think in the past you've described that as, you know, maybe it's a good thing to have that there. You don't necessarily need to monetize all of it, but there are some interesting products out there, Overwolf and the like.
Clayton Keever Griffin: I'm curious if you guys would talk about the <unk>.
Speaker Change #223: Broader PC strategy I know that there is just tons and tons of engagement, particularly for GTA on Tc not all of that gets monetized I think in the past.
Speaker Change #223: Describe that as maybe it's a good thing to have that there you don't necessarily need to monetize all of it but there are also interesting products out there over wolf and the like and so I'm. Just curious what you guys are seeing or thinking about your opportunity to unlock monetization on PC.
Strauss H. Zelnick: And so maybe I'm just curious what you guys are seeing or thinking about your opportunity to unlock monetization on. So, we look at the PC platform as we do any platform, and it all starts with content, first and foremost. And we agree, it's a very powerful platform, and we've got some very strong third-party partners. Also, the ability for us to sell directly to the consumer. So, these are all compelling things for us, and we'll continue to develop and support the PC platform as long as gamers are there.
Speaker Change #224: So we look at the PC platform as we do with any of any platform and it all starts with content first and foremost and we agree it's a very powerful platform and we've got some very strong third party partners and also the ability for us to.
Speaker Change #224: They sell directly to the consumer. So these are all compelling things for us and will continue to develop and support the PC platform as long as the gamers there wherever the game or is that's where we're going to be and again I don't really see us looking at the PC monetization.
Strauss H. Zelnick: Wherever the gamer is, that's where we're going to be. And again, I don't really see us looking at PC modernization any differently than we would on any other platform. It really is more about game to game.
Speaker Change #224: Any differently than we would on any other platform. It really is more about games again.
Strauss H. Zelnick: You know, what works for certain games, what doesn't work for certain games, and the overarching edict that we live by is over-deliver on content, and the modernization will follow. Great. Thanks, Karl.
What works for certain games, what doesn't buy for certain games and the overarching.
EA access that we live by it over deliver on content and the monetization will follow.
Great. Thanks Carl.
Strauss H. Zelnick: And our next question comes from the line of Chris Shaw. Great, thank you for taking the questions. We saw Rockstar announce a price increase for GTA+. I recognize it's been several years, but can you help us think through the rationale? And as you look ahead to TA6, what are your latest thoughts around the pricing dynamics for the franchise or your portfolio in general as these games continue to get larger with more robust experiences? Thank you.
Speaker Change #225: And our next question comes from the line of Chris Shaw with UBS. Please proceed with your question.
Chris Shaw: Great. Thank you for taking the questions. We saw Rockstar announce a price increase for GTA plus I recognize it's been several years, but can you help us think through the rationale and as you look at Ta.
Chris Shaw: Six so what are your latest thoughts around the pricing dynamics for the franchise or your portfolio in general as these games continue to get larger with more robust experiences. Thank you.
Strauss H. Zelnick: Look, there's more content constantly being made available, and, you know, we really aim to deliver great value at any given time. We're so focused on delivering more value than what we charge, and that's sort of the rubric. And any time we establish a price, we want to make sure that it's good news for the consumer, so that the experience vastly over-delivers in the context of the cost. That's the goal. Great, thank you.
Speaker Change #226: Look there's more content constantly being made available and we really aim to deliver great value at any given time, we're so focused on delivering more value than what we charge.
Speaker Change #226: Alright, that's fair to the rubric and anytime we establish a price. So we want to make sure that it's good news for the consumer that the experience.
Speaker Change #226: Lastly over delivers.
Speaker Change #226: In the context of the cost that's the goal.
Speaker Change #227: Great. Thank you.
Speaker Change #228: And our next question comes from the line of Omar <unk>.
Speaker Change #229: <unk> with Bank of America. Please proceed with your question.
Strauss H. Zelnick: Sure, I have two questions, one on mobile and then just one again on..., sequential growth. Is there any more color at all you can give us on how you're going to grow sequentially in Fiscal 27 after lapping just such a tough comp in Fiscal 26 when... The ETA-6 is going to launch. Counterintuitive, but when I look back at the last two times Rockstar released a mega-title... You know, Red Dead Redemption and Fiscal 19, Fiscal 20 did not grow, and Grand Theft Auto V in fiscal 14. Fiscal 15 was down 30%.
Omar: Yes, sure I have two questions.
Speaker Change #230: One on mobile and then just one again on <unk>.
Speaker Change #231: The sequential growth so.
Speaker Change #232: Is there any any more color at all you can give us on how youre going to grow sequentially in fiscal 'twenty seven after lapping just such a tough comp in fiscal 'twenty six.
Speaker Change #233: N G.
Speaker Change #234: GTA six is going to going to launch it seems counterintuitive.
Speaker Change #235: When I look back at the last two times Rockstar released a mega title.
Speaker Change #236: Red Dead redemption in fiscal 19 fiscal 'twenty does not grow.
Speaker Change #236: And Grand Theft auto five Grand theft auto five in fiscal 14.
Speaker Change #236: Fiscal 15 was down 30%.
Speaker Change #237: I'm, just kind of trying to trying to square those couple of things there.
Strauss H. Zelnick: I'm just kind of trying to square those couple of things there. Will it be Rockstar that continues to drive that sequential growth in Fiscal 27? Any more color there would be really great.
Speaker Change #237: Will it be Rockstar that continues to drive that sequential growth in fiscal 'twenty seven.
Speaker Change #238: Any more color there would be really great.
Strauss H. Zelnick: Yeah, it's a fair question. Look, the business has really changed, certainly since 2019, and absolutely since 2015, in ways that are obvious now and in ways that we project into the future. The sequential growth is driven by our overall pipeline, and we're now a large and diversified company. And we do have GTA 6 coming. We have great aspirations for GTA 6. And, as I said earlier, we've been selling full-game GTA 5s for over 10 years, and we continue to sell more in a given year than most other scandals and releases sell in their first year, even at our big competitors' companies.
Speaker Change #239: Yes Fair question I'll look the business has really changed.
Speaker Change #239: Certainly since 2019.
Speaker Change #240: Absolutely since 2015.
Speaker Change #240: And in ways that are obvious now in ways that we project in the future.
Speaker Change #240: The sequential growth is driven by our overall pipeline and we are now a large and diversified company.
Speaker Change #240: We do have GTA six coming we have great aspirations for GTA six.
Speaker Change #240: As I said earlier, we've been selling full game.
Speaker Change #240: <unk> fives for over 10 years, and we continue to sell more in a given year than most other standalone release of selling their first year, even that our big competitors companies. So.
Speaker Change #240: We actually think there.
Speaker Change #240: There is a compelling case.
Speaker Change #240: The full game sales will continue to be robust for years to come equally we have a pipeline both announced and unannounced. That's very exciting we've an annualized pipeline that will of course continue to come that's quite significant and we have a mobile business.
Strauss H. Zelnick: So we actually think that there's a compelling case that full-game sales will continue to be robust for years to come. Equally, we have a pipeline, both announced and unannounced, that's very exciting. We have an annualized pipeline that will, of course, continue to come in that's quite significant. And we have a mobile business that we frankly feel has been right-sized, well-structured, and is now back in growth mode. And there's evidence of that, the performance of Match Factory, the performance of Toon Blast, and the stable performance of many other big titles.
Speaker Change #240: We frankly feel has been right sized well structured.
Speaker Change #240: And is now back in growth mode.
Speaker Change #240: There is evidence of that the performance of match factory performance of tuned blast and the stable performance of many other big titles.
Strauss H. Zelnick: There are also geographical growth opportunities that we're very focused on. We don't spend a lot of time talking about them, but they're a huge part of our strategy. Our business and our competitors' businesses remain largely U.S. and Western Europe-focused.
Speaker Change #240: Theyre also geographical growth opportunities that we're very focused on we don't spend a lot of time talking about it puts a huge part of our strategy.
Speaker Change #240: Our business and our competitors' businesses remain largely.
Strauss H. Zelnick: And we think there are enormous opportunities for growth in Asia, India, and Africa, where we and everyone else who isn't located in those geographies are deeply underpenetrated. So there are numerous opportunities for growth. But to put your mind at ease, this isn't a game where you stick a finger in your mouth and hold it in the air and hope for the best kind of number.
Speaker Change #240: U S and Western Europe focus and we think there are enormous opportunities for growth in Asia, India and Africa.
Speaker Change #240: Where are we and everyone else who isn't located in those geographies.
Speaker Change #240: Our deeply underpenetrated. So there are numerous numerous opportunities for growth but.
Speaker Change #240: Puts reminded is.
Speaker Change #240: Isn't.
Speaker Change #240: Six finger in your mouth and hold it in the air and hope for the best kind of numbers. This is driven by our release schedule in our pipeline.
Strauss H. Zelnick: This is driven by our release schedule and our pipeline. Okay, and along kind of the same lines, I think a lot of people are going to be super excited about GTA when GTA 6 comes out. Do you make any assumptions about the perhaps re-acceleration of growth in the console installed base or console sales? You know, because your title may bring a lot of lapsed gamers back into the ecosystem in your 4K? We're using IGDG's projections, which are pretty substantial. So for Gen 9 alone, their view is that there are about 81 million consoles worldwide currently. That was at the end of last year.
Speaker Change #240: Okay.
Speaker Change #240: Along the same lines I think a lot of people are going to be super excited about GTA GTE six coming out.
Speaker Change #241: Do you make any assumptions about the perhaps a reacceleration of growth in the console installed base or console sales.
Speaker Change #242: Because your title May.
Speaker Change #243: Bringing a lot of lapsed gamers back into the ecosystem in your forecasts.
Speaker Change #243: Yes.
Speaker Change #244: We're using <unk> projections, which are pretty substantial so for gen. Nine alone. Their view is that there are about 81 million consoles worldwide. Currently that was at the end of the last year. They project that will rise to 111 by the end of this year and 175 by the end of 2027.
Strauss H. Zelnick: They project that it will rise to 111 by the end of this year and 175 by the end of 2027. Now, we don't necessarily subscribe to or not subscribe to those views, but that shows an awful lot of growth. And we do expect a very significant attach rate. Thanks a lot.
Speaker Change #244: Now, we don't necessarily subscriber not subscribe to those views, but that shows an awful lot of growth and we do expect a very significant attach rate.
Speaker Change #245: Thanks, a lot I appreciate it.
Speaker Change #246: Thank you we have reached the end of our question and answer session and with that I would like to turn the floor back over to CEO Strauss zelnick for any closing comments.
Strauss H. Zelnick: I appreciate it. Before we sign off, I just want to thank everyone who works at Take-Two and all of our affiliates. These have been challenging times, and in addition to delivering hits, we've asked everyone to dig deep and make sure the business is highly efficient, right-sized, and that's challenging. And one of the most extraordinary things about our organization is the amazing morale and focus on the common good. We're here for our customers, first and foremost for our colleagues who deliver to our customers every day, and for our shareholders, and we're extraordinarily excited both about the position we're in, about the fiscal year in which we're currently operating, and about our amazing pipeline and the years ahead. Thank you for joining us today.
Strauss H. Zelnick: Before we sign off I just wanted to thank everyone, who works so take two and all of our affiliates.
Strauss H. Zelnick: These have been challenging times and in addition to delivering hits, we've asked everyone to dig deep and make sure the business is highly efficient <unk>.
Strauss H. Zelnick: Challenging and one of the most extraordinary things about our organization is the amazing morale and.
Strauss H. Zelnick: Focus on the common good we're here for our customers for our first and foremost for our colleagues who deliver to our customers every day and for our shareholders.
Strauss H. Zelnick: And we're extraordinarily excited both about the position we're in about the fiscal year in which we're currently operating in.
Strauss H. Zelnick: And about our amazing pipeline in the years ahead. Thank you for joining us today.
Speaker Change #247: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.