Technology

Take-Two shares fall as sales drop, wait continues for new releases

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A promotion for the computer game "Grand Theft Auto Five" is show in a Game Stop gaming story in Encinitas, California September 17, 2013. REUTERS/Mike Blake/File Photo

Feb 8 (Reuters) - Shares of Take-Two Interactive Software Inc (TTWO.O) fell nearly 4% after the bell on Monday after the videogame publisher posted a drop in quarterly adjusted sales and shied away from announcing any new big releases.

"They haven't announced any new games for next year ... They haven't done so all year, so investors are getting a bit frustrated waiting," Wedbush Securities analyst Michael Pachter said.

The videogame publisher's earnings were also overshadowed by a $2.4 billion buyout of Glu Mobile Inc (GLUU.O) by rival Electronic Arts (EA.O), which previously outbid Take-Two in December to snap up British firm Codemasters for $1.2 billion. read more

Losing the Codemasters deal to "our friends out West" was "disappointing", Take-Two Chief Executive Officer Strauss Zelnick told analysts on an earnings call.

"I suppose there is some concern about 'missed opportunity', but nobody expected Take-Two to buy Glu today," Pachter said.

Take-Two on Monday raised annual adjusted sales targets on sustained demand for its top franchises, "NBA 2K" and "Grand Theft Auto", as COVID-19 curbs continue to boost videogame sales worldwide.

The company lifted its full-year adjusted revenue forecast to a range of $3.37 billion to $3.42 billion, from an earlier view of $3.15 billion to $3.25 billion. Analysts had expected sales of $3.3 billion, according to Refinitiv IBES data.

Electronic Arts and Activision Blizzard (ATVI.O) last week forecast upbeat revenue on the back of a pandemic-led boost in demand for videogames, which garnered record sales of $56.9 billion in 2020, according to research firm NPD.

On an adjusted basis, Take-Two's third-quarter revenue fell to $814.3 million from $888.2 million, still beating analysts' average estimate of $747 million.

The company had benefited from the release of "Red Dead Redemption 2" and "The Outer Worlds" in the year-ago quarter.

Reporting by Tiyashi Datta in Bengaluru; Editing by Ramakrishnan M.

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