While Take-Two Interactive reports a 60% growth of bookings for its Q3 fiscal quarter for 2023, led by its top franchises such as Grand Theft Auto and Red Dead Redemption, it seems it still fell short of overall expectations.

Despite strong revenue growth, Take-Two Interactive Software, Inc. (NASDAQ: TTWO) took a net loss for its 2023 third quarter. There may have been multiple factors that contributed to missing the company’s goals, including video game consumer attention and the overall outlook on the game industry. But in missing its intended financial returns for this quarter, Take-Two also announced a cost-cutting initiative that may include layoffs and delays for upcoming releases.

Read on for the details revealed from Take-Two’s recent investor webcast conference.

The webcast conference call was conducted by Strauss Zelnick, Take-Two’s Chairman and Chief Executive Officer, Take-Two’s President Karl Slatoff, and the company’s Chief Financial Officer Lainie Goldstein.

The report did note that the net bookings of $1.38 billion were below earlier projections. Earlier analyst projections of the net revenue for Take-Two’s offerings were set at $1.43 to $1.48 billion, with net bookings in the range of $1.41 to $1.46 billion. For clarity, the definition of net bookings within the context of the game company’s financial reports as:

…the net amount of products and services sold digitally or sold-in physically in the period. Net bookings are calculated by adding total net revenue to the change in deferred net revenue for online-enabled games.

Reasons given by Take-Two CEO Strauss Zelnick for missing the targeted net bookings were "macroeconomic conditions, consumers shifted holiday spending toward established blockbuster franchises and titles that were offered with pricing promotions." To be fair, the company also benefited from the video game consumer preference to established franchises and IPs, but it also had a negative impact on newer and untested brands.

On that note, Take-Two credited its biggest franchises with providing the largest contributions to the company's earnings. Notable points from the report include:

• Rockstar Games’ Grand Theft Auto 5 selling more than 175 million units, with the Los Santos Drug Wars content adding value to GTA Online and also gameplay features during the winter release. GTA 5 was #2 overall for units sold in 2022 on Steam (and #3 for units sold in the U.S.).
• Red Dead Redemption 2 selling more than 50 million units. In addition, Rockstar Games released new updates to Red Dead Online including the Halloween Telegram Mission and Call to Arms locations over the holiday seasons. RDR2 ranked the #1 selling game on Steam for the quarter (reaching #3 for 2022 overall).



• NBA 2K23 being the #1 selling sports title in North America, with a sales number of over 8 million units. In addition, NBA 2K23 Arcade Edition was the #1 game on Apple Arcade since its October 2022 launch.
• The recent Firaxis Games release of Marvel’s Midnight Suns received much critical acclaim for its gameplay, taking the Marvel IPs in a new direction, but the sales fell short of revenue expectations. However, it will still be supported "a series of post-launch content that can be purchased individually or as part of the game’s Season Pass."
• Zynga Games performed within the expectations for the mobile game market, particularly in the holiday months. Zynga titles that were noteworthy in their performance include Empires & Puzzles, Balls’n Ropes, Tap Away Game of Thrones Slots, Top Eleven, CSR Racing 2, and their host of casino games.

It is unclear if this cost-reduction will entail layoffs, something that already plagued its competitors such as EA and Microsoft in recent years. According to Chief Financial Officer Lainie Goldstein, the cost-cutting initiative will look at specific opportunities to accomplish the $50 million in savings:

Opportunities include personnel, processes, infrastructure, and other areas, particularly in our publishing and corporate functions.

While the performance of Take-Two’s current fiscal year company president Karl Slatoff remarked on their commitment to delivering for the remainder of the fiscal year:

As we focus on the remainder of the year and beyond, we remain steadfast in our commitment to providing the most captivating and engaging entertainment experiences for our audiences across all platforms and geographies. We believe this is the best strategy and path forward to achieving our goals, driving our expected long-term growth, and bringing value to our shareholders.

One notable upcoming title from Take-Two is 2K and Visual Concepts releasing WWE 2K23 for PlayStation and Xbox consoles on March 17, 2023, which will coincide with superstar John Cena celebrating his 20th anniversary in the WWE. However, Take-Two made no mention about Grand Theft Auto 6 or how the adjustments for the remaining fiscal year 2023 will affect GTA 6's future release.

The complete transcript and webcast presentation for the Take-Two Interactive Q3 report can be found at the investor section of its official website.