Game publisher Take-Two Interactive beat earnings expectations in its fiscal second quarter, driven by in-game sales within its popular sports simulation games, especially the recently released “NBA 2K21.”
Take-Two’s net income for the period was $99.3 million, up 38% from $71.8 million this time last year, the company reported Thursday.
New York-based Take-Two owns the publishing labels 2K and Rockstar Games — which develops the “Grand Theft Auto” and “Red Dead Redemption” franchises. The company also publishes a suite of sports simulation games under the 2K label including “NBA 2K21,” which quickly surpassed 1.9 million copies sold after its Sept. 4 launch.
“Grand Theft Auto V” and “Red Dead Redemption 2,” along with their online multiplayer counterpart “Grand Theft Auto Online” and “Red Dead Online” also drove revenue up.
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Net bookings, or in-game payments made by players, totaled $957.5 million, up roughly $25 million from second quarter 2019. Rising player spending in golf simulation game”PGA Tour 2k21,” which released Aug. 21, also accounted for the increase in bookings. Take-Two chairman and CEO Strauss Zelnick said during an earnings call that the company now expects its overall net bookings to exceed $3 billion by the end of 2021, a potentially record-setting total.
“NBA 2K21” was one of the top-selling NBA simulation games ever released by 2K, Take-Two said. Demand for the game drove overall digital gaming spend up to $10.7 billion in September, according to industry tracker SuperData. SuperData reported sales of “NBA 2K21” were up 19% compared to its predecessor, and that in-game revenue was up 8% over the prior title.
Take-Two said other high-performing franchises this quarter included the remastered “Mafia” games, world-building strategy title “Sid Meier’s Civilization VI,” and the “WWE” wrestling game series.
Take-Two’s bottom line was boosted by an acquisition in late August — it bought mobile game developer Playdots for $192 million. The acquisition gives Take-Two a strong foothold in the mobile gaming industry, which is currently the fastest-growing sector within games. Playdots’ games have been downloaded over 100 million times since its 2013 launch, the company said.
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The publisher is also at work on several “non-simulated” football games that will launch “starting in calendar year 2021.” The titles are not yet named, but the games are developed in partnership with the National Football League Players Association, which signed off to license the names, images, likenesses and jersey numbers of roughly 2,000 NFL athletes.
“Our positive momentum continued in the fiscal second quarter with operating results that significantly exceeded our expectations,” Zelnick said. “With the strongest development pipeline in the history of the Company and our ongoing investment in emerging markets, platforms and business models, Take-Two is exceedingly well positioned to capitalize on the many positive trends in our industry and to generate growth and margin expansion over the long-term.”