(Reuters) - Take-Two Interactive Software Inc, best known for its hugely popular “Grand Theft Auto” video game series, cut its profit forecast for its fiscal year 2017, largely due to higher royalty payments.
Shares of the company, which also reported a 15 percent jump in third-quarter revenue, were down 1.5 percent in after-market trading on Tuesday.
“GAAP net income is impacted by higher internal royalties resulting from the continued outperformance of Grand Theft Auto V and Grand Theft Auto Online,” Chief Financial Officer Lainie Goldstein said on a post-earnings conference call.
“Grand Theft Auto V”, one of the best-selling video games, was launched in 2013 by the company’s Rockstar Games studio.
The company said on Tuesday that to date, sell-in for “Grand Theft Auto V” has surpassed 75 million units.
Take-Two said it now expected a profit of between $1.15 to $1.25 per share for its full-year ending March 31, down from its earlier forecast of $1.80 and $2.09.
The company also trimmed its full-year net revenue forecast range, mainly due to deferrals.
U.S. financial regulators have issued new guidelines that require deferred revenue from games with online components be accounted for over however long users play them, typically six to nine months.
Take-Two said it now expected the top end of its full-year revenue at $1.80 billion, down from $1.85 billion earlier. The company retained the lower end at $1.75 billion.
Chief Executive Strauss Zelnick said in an interview that a truer reflection of the business was bookings.
The company raised its full-year bookings forecast to $1.72 billion to $1.77 billion, up from $1.6 billion to $1.7 billion it expected previously.
Take-Two said net revenue rose to $476.5 million from $414.2 million in the third quarter.
On an adjusted basis, the company reported revenue of $744.8 million, beating analysts’ average estimate of $705.6 million, according to Thomson Reuters I/B/E/S.
The company benefited from sales of “Grand Theft Auto V” and higher digital downloads of its games.
Take-Two had also released its pro-wrestling “WWE 2K17” and strategy “Sid Meier’s Civilization VI” games during the period, which also contributed to the increase in revenue.
The high-margin digital business grew 64 percent to $240.2 million as more players switch to downloading games rather than buying physical game discs.
The company’s net loss narrowed to $29.8 million, or 33 cents per share, from $42.4 million, or 51 cents per share, a year earlier, helped by lower total operating expenses.
(This version of the story corrects paragraph 5 to say “Grand Theft Auto V” sell-in surpassed 75 million units to date, not at the end of December)
Reporting by Anya George Tharakan in Bengaluru; Editing by Sriraj Kalluvila