Gaming Business - Take Two Posts Massive Losses

[jdros13]

Not sure where this belongs, but news is not good with Take Two. Revenues down about 13-14% and they took a loss on the year of $186 million. They are projecting to "break even" in 2007, which is never a particularly good sign, and their internal projections are about $100 million less than what Wall Street's projections had been.

GTA is coming out this fall, which will improve earnings, but 2K Sports is not having the impact that some (including I assume Take Two) thought they could.

Couple of links:
IGN
Marketwatch

[fishepa]

Re: Gaming Business - Take Two Posts Massive Losses

That is a lot of money.

[TheBadazz]

Re: Gaming Business - Take Two Posts Massive Losses

I would not put all the blame on 2K sports. Bully wasn't all that hot. Table Tennis? Yeah right. Pirates and Prey were big sellers also....... not! Take-two is GTA. The year it's released ....... they profit. When it doesn't ........ they don't. They need new games!

P.S. SoE I & II sucked big time.

[23]

Re: Gaming Business - Take Two Posts Massive Losses

This has been happening for a couple of years now hasn't it?

[jdros13]

Re: Gaming Business - Take Two Posts Massive Losses

This has been happening for a couple of years now hasn't it?

No, they showed a profit of $35.3 million in '05...so they had a $221 million loss in profit and a $160 Million drop in revenues...that's not good.

[Fu Man Ching]

Re: Gaming Business - Take Two Posts Massive Losses

They seem to be making good games. Oblivion migtht also get some good sale numbers when it goes to the PS3 Maybe not though.

[luv_mist]

Re: Gaming Business - Take Two Posts Massive Losses

I would not put all the blame on 2K sports. Bully wasn't all that hot. Table Tennis? Yeah right. Pirates and Prey were big sellers also....... not! Take-two is GTA. The year it's released ....... they profit. When it doesn't ........ they don't. They need new games!

P.S. SoE I & II sucked big time.

What the heck is SoE? I personally hear that all those games were pretty good games. I'm going to be very hurt if T2 goes out of business because they're making some pretty great quality games. Original titles and everything. Bully was nice, Table Tennis was nice, Prey was nice, all thier Vice/Liberty City stories have been selling. It's messed up that they're having that much of a hard time. I hope this doesn't mess up the APF or NBA/CH 2K8 franchises. Man, this supposed next gen is killing companies.......

[jdros13]

Re: Gaming Business - Take Two Posts Massive Losses

I would not put all the blame on 2K sports. Bully wasn't all that hot. Table Tennis? Yeah right. Pirates and Prey were big sellers also....... not! Take-two is GTA. The year it's released ....... they profit. When it doesn't ........ they don't. They need new games!

P.S. SoE I & II sucked big time.

Yeah, but I believe they thought the 2K sports franchises would help them stay profitable in those non-GTA years (there was a mention in one of the articles I read about that - although I'm not sure I linked to that one - after all, they did drop a ton of licensing money on MLB for partial exclusivity). The sports games are obviously not accomplishing that for them.

[ZB9]

Re: Gaming Business - Take Two Posts Massive Losses

Table Tennis? Yeah right. .

they were probably hoping that table tennis would sell a crapload of copies in Asia

[23]

Re: Gaming Business - Take Two Posts Massive Losses

The sports games are obviously not accomplishing that for them.

Neither was that terrible marketing.

[jdros13]

Re: Gaming Business - Take Two Posts Massive Losses

Neither was that terrible marketing.

Perhaps...hey, I like the 2K Sports games, I just want them to survive so I have games to play in the coming years that offer an alternative to the EA games. Perhaps their marketing approach isn't what others would do, but it looks like they don't have any more money to be throwing in the marketing budget either. EA has a great slogan that carries a lot of brand recognition now. I personally am not crazy about the marketing that EA has done this year (I don't like the two guys playing the game commercials), but they have laid the foundation of their campaign over many, many years - and it is a very good campaign. 2K is just the other guy in this segment of the industry, and have a ton of catching up to do.

"2K marketing is terrible" seems to be a popular refrain around these boards. If that is the case, then what do you want to see? Personally I thought the TO campaign and the $19.99 price point for all the 2K5 games was very good marketing - actually it was probably too successful, as they wound up in a bidding war for exclusivity on most of the games before they had enough of a war chest to truly compete with EA on the biggest sports title (football) and subsequently overpaid for a half-assed exclusivity deal with MLB, probably to stay relevant. They obviously don't have the economic resources that EA does to dump into marketing. What would you do that would be an improvement?

[Behindshadows]

Re: Gaming Business - Take Two Posts Massive Losses

boo hoo, lets cry for take-two. every since these people got sued over the hot coffee mod, they have been in the news as having financial drawbacks.

now the complaint that its cause of 2ksports is a joke. they don't market 2ksports the way they do GTA.

GTA comes out every once in a while and they have massive marketing for it, and tons of commercials and ads.

Why not put that into titles that come out every year, such as their sports titles. I'm sure the profits would roll in.

Also like another person posted, they had about 5 other titles that just bummed out. And you forgot to mention Top Spin 2.

Thing is, they need something to blame and since the sports titles are selling every other month or so. They are pointing fingers. Instead of blaming the sports section of Take-Two. Blame the marketing team.

Because it takes marketing and other advertisements to sell titles.

Where were the Top Spin commercials, the table tennis commercials, Prey? and so on. People aren't going to buy what they don't know.

But they've had massive losses for almost 2 years now. Time to get a new marketing team and put the company back on the map of most wanted games.

Even the crapiest games can sale with great marketing. ie.NBA Live 07

(I mean come on, Live had a commercial with two guys replaying the game, showing the shoes, while dunking on the opponent. So millions)

[jdros13]

Re: Gaming Business - Take Two Posts Massive Losses

Even the crapiest games can sale with great marketing. ie.NBA Live 07

(I mean come on, Live had a commercial with two guys replaying the game, showing the shoes, while dunking on the opponent. So millions)

I would argue that NBA Live isn't selling because of those commercials though (personally I think this campaign is pretty poor). It is because of the brand awareness they have created over many, many years. "It's in the game" has been around since I can remember EA games and is a great slogan.

I don't see anyone boo-hooing about TT either...I was just pointing out that they are not doing well, which could mean that they start selling titles / shutting down titles / doing something different.

So, again I ask, other than "dump more money into marketing to sell titles" - and they currently spend about 10% of revenues on marketing (info is in another post I have on the boards, look it up if you like) which means as a company they spend about $100 million on marketing - what exactly would you change?

Oh, and BTW, the GTA games in 2004 (don't have more recent info - again all the info is somewhere else on these boards) accounted for over 30% of the total revenue of the company, I don't remember exactly what it was. NFL 2K5 accounted for about 3.5% of the revenue that year, and it was by far their most successful sports game ever (and they promoted that game like crazy with tv commercials). So I can understand why GTA might get a bigger budget.

[jmood88]

Re: Gaming Business - Take Two Posts Massive Losses

"2K marketing is terrible" seems to be a popular refrain around these boards. If that is the case, then what do you want to see? Personally I thought the TO campaign and the $19.99 price point for all the 2K5 games was very good marketing - actually it was probably too successful, as they wound up in a bidding war for exclusivity on most of the games before they had enough of a war chest to truly compete with EA on the biggest sports title (football) and subsequently overpaid for a half-assed exclusivity deal with MLB, probably to stay relevant. They obviously don't have the economic resources that EA does to dump into marketing. What would you do that would be an improvement?

I would like to see them advertise more. They don't have to spend crazy amounts of money to at least put some stuff on the internet. VC has never been with a company that advertises well and it is still like that.

[Behindshadows]

Re: Gaming Business - Take Two Posts Massive Losses

I would argue that NBA Live isn't selling because of those commercials though (personally I think this campaign is pretty poor). It is because of the brand awareness they have created over many, many years. "It's in the game" has been around since I can remember EA games and is a great slogan.

I don't see anyone boo-hooing about TT either...I was just pointing out that they are not doing well, which could mean that they start selling titles / shutting down titles / doing something different.

I wasn't saying you were crying, I meant the media.

Secondly the 2k series is just as popular, like Jmood said, they've never had a company actually market them right, yet they make a superior product every year. But people do know they are great.

Oh, and BTW, the GTA games in 2004 (don't have more recent info - again all the info is somewhere else on these boards) accounted for over 30% of the total revenue of the company, I don't remember exactly what it was. NFL 2K5 accounted for about 3.5% of the revenue that year, and it was by far their most successful sports game ever (and they promoted that game like crazy with tv commercials). So I can understand why GTA might get a bigger budget.

2k5 didn't belong to take-two, it belonged to Sega!!! Has nothing to do with them.

And GTA is 30% because they market it well.