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Take-Two FY 2015: GTA V 52 million, Evolve 2.5 M, NBA 7M, WWE 3M, lost $243 million
- Thread starter Quentyn
- Start date
Well..The fact that they still lost 243 million...
FairXchange
Member
Does their posted loss have anything to do with marketing costs for Evolve, versus what it ended up selling?
GTAV releasing Q2FY15 on PS4/XBO compared to Q3FY14 on PS360 skews the year on year GAAP comparison. Why? Because of Deferred Revenue. In the case of a videogame with online functionality, U.S. GAAP requires revenue recognition spread over an estimated service life of the game.
The transaction price ($60 retail) can be recognized in at three ways:
1) Single-play only game (The Order 1866): Straightaway when shipped. Publisher has met their performance obligations at this point. (Simplified example, subject to returns, warranty obligations, blah blah)
2) SP/MP game (Grand Theft Auto V/Online): If the single player mode can be played without dependency on the MP online side, transaction price is allocated between the two. SP portion recognized upon shipment, and online portion allocated over an estimated service life.
3) Multiplayer-only (Evolve): Significant deferral. Spread $60 over service life.
Then there are games like Driveclub, single-player portion with significant online hooks. I'd guess Sony takes the conservative route and defers most of that revenue.
GTAV last-gen launched in September, with more time to earn revenue in the same fiscal year. By March 31, 2014 deferred revenue was $61.195 million. GTAV current gen launched in November and had less time to earn its revenue. Deferred revenue at March 31, 2015 was a much larger $482.73 million. A chunk of that is from Evolve as well, with no comparable online-only title in prior year.
Estimating a service life is tricky, an inexact science. Which is why management is not judged upon, and does not make decisions based on, the effects of Deferred Revenue.
In context, the $243 million GAAP loss isn't that meaningful IMO. TTWO received cash for every copy sold-in. It pays expenses and makes investments using that cash. Cash flow from operations was $212 million in FY2015.
That mountain of Deferred Revenue will just be earned in FY2016. No big deal. The industry is not doomed yet.
The transaction price ($60 retail) can be recognized in at three ways:
1) Single-play only game (The Order 1866): Straightaway when shipped. Publisher has met their performance obligations at this point. (Simplified example, subject to returns, warranty obligations, blah blah)
2) SP/MP game (Grand Theft Auto V/Online): If the single player mode can be played without dependency on the MP online side, transaction price is allocated between the two. SP portion recognized upon shipment, and online portion allocated over an estimated service life.
3) Multiplayer-only (Evolve): Significant deferral. Spread $60 over service life.
Then there are games like Driveclub, single-player portion with significant online hooks. I'd guess Sony takes the conservative route and defers most of that revenue.
Take-Two Interactive FY2015 report said:
GTAV last-gen launched in September, with more time to earn revenue in the same fiscal year. By March 31, 2014 deferred revenue was $61.195 million. GTAV current gen launched in November and had less time to earn its revenue. Deferred revenue at March 31, 2015 was a much larger $482.73 million. A chunk of that is from Evolve as well, with no comparable online-only title in prior year.
Estimating a service life is tricky, an inexact science. Which is why management is not judged upon, and does not make decisions based on, the effects of Deferred Revenue.
In context, the $243 million GAAP loss isn't that meaningful IMO. TTWO received cash for every copy sold-in. It pays expenses and makes investments using that cash. Cash flow from operations was $212 million in FY2015.
That mountain of Deferred Revenue will just be earned in FY2016. No big deal. The industry is not doomed yet.
Sticky&Sweet
Banned
I still haven't played it, must pick it up soon as I keep meaning to.
The Albatross
Member
A lot of people are missing that GTA V sold the bulk of that 52 million units in fiscal year 2014 (where take2 had 95% growth) , not FY2015.
Entire unused portions of the map that are begging to get some story content, plus the world building of gta costs a lot of development hours, and once that world is built you'd figure they'd want to utilize it more.
Entire unused portions of the map that are begging to get some story content, plus the world building of gta costs a lot of development hours, and once that world is built you'd figure they'd want to utilize it more.
The Maverick
Member
Huge sales, congrats. The thirst was real, a non-annualized behemoth with the marketing it had and the end-of-gen install base for 360 & PS3 + the double, triple dipping (I'm curious about how many did just that, I know I bought three copies myself and many others I know have bought a couple or more).
That 243M$ loss looks rough though. You'd think the AAA industry favours the few but this big loss would have you believe otherwise.
Will have to look at the numbers and the costs because unless they pumped 500M$ in R&D on creating the GTABox Console then I don't see it.
That 243M$ loss looks rough though. You'd think the AAA industry favours the few but this big loss would have you believe otherwise.
Will have to look at the numbers and the costs because unless they pumped 500M$ in R&D on creating the GTABox Console then I don't see it.
Game Informer asked Take-Two about the story DLC for GTA V. They confirmed that Strauss made a mistake and referred to the old blog post. Looks like there is still hope.
http://www.gameinformer.com/b/news/...ring-gta-v-story-content-no-new-info-yet.aspx
http://www.gameinformer.com/b/news/...ring-gta-v-story-content-no-new-info-yet.aspx
Expenses outstrip revenue.
So if Wikipedia isn't wrong, GTA V is now the top selling full priced video game ever outside of hardware bundles. Almost twice as much as the top selling Call of Duty, and almost twenty five million units ahead of the second best selling GTA (San Andreas). Hasn't even really hit bargain pricing yet either. Seventy million copies has to be within reach. I don't see another purely console/PC game touching it anytime soon. Xbox One and PS4 will not have had a combined fifteen years on the shelves by the time GTA VI comes out. Pretty staggering.
Chittagong
Gold Member
I really feel like and fear that console gaming is dying. The big blockbusters are few and far between, and most console-style studios are either folding or going full on mobile. There are a few companies who still do well, like GTAV with 52M units sold. But most of the developers seem to be running to find the end of the mobile rainbow.
It's understandable financially with a modern console game costing $20M-$100M to make, there are a very few investors with the risk appetite (and the resources) to fund projects like that. That's not even venture capital territory anymore, it's private equity world. And even if you pour all that money in the game might bomb spectacularly.
I believe the push in consoles currently is towards a world emulating the film industry, where we have a handful of big films a year, most of them sequels to known franchises, and then a bunch of totally different indie stuff of much lower production value. The question is that whether people will buy dedicated hardware for that, or whether they'll get by with something like an Apple TV with A9 - that's the question that will determine the future of the console industry.
I think we will look back at the PS2 and Xbox 360 generations as the golden years of console gaming.
It's understandable financially with a modern console game costing $20M-$100M to make, there are a very few investors with the risk appetite (and the resources) to fund projects like that. That's not even venture capital territory anymore, it's private equity world. And even if you pour all that money in the game might bomb spectacularly.
I believe the push in consoles currently is towards a world emulating the film industry, where we have a handful of big films a year, most of them sequels to known franchises, and then a bunch of totally different indie stuff of much lower production value. The question is that whether people will buy dedicated hardware for that, or whether they'll get by with something like an Apple TV with A9 - that's the question that will determine the future of the console industry.
I think we will look back at the PS2 and Xbox 360 generations as the golden years of console gaming.
So if this is correct GTA V is now the 4th best-selling video game of all time.
Holy shit.
Edit: How the hell do you post a loss when you're selling 52 million units of a single game?
Inspector Jones
Member
This for sure. People expect a new Call of Duty or Assassins Creed at this point. When a new GTA gets announced, it's going to wow everyone. When the next GTA releases, I bet it will shatter records as well.
EDIT: In total, I've purchased GTA V five times. 1 PS3 & PS4 copy for myself, then 3 copies of the PC version for my buddies and I to enjoy. Worth every penny.
prag16
Banned
No, and I don't. I've been bashing some of their decisions with regard to Splatoon lately as a matter of fact.
Just seemed strange to me here, seeing "lulz Nintendo" brought up in this entirely unrelated topic.
Yes, we all know the Wii U is an overall commercial failure. That's been established and discussed over and over. Apparent schadenfreude with regard to this popping up in a TakeTwo financial topic was odd. That's all. I'll remove this topic from my subscriptions now in order to help end this tangential discussion.
Well, they consecutively sold 3 improved versions of the game with some time between each of them. It's like a game and 2 HD remasters!
Still massive mind you.
protomouse
Member
GTA V definitely benefited from the staggered release.
This effect (deferred revenue by GAAP) actually can swing both ways:
1) Quarters like this, with big releases (or re-releases) that have significant losses
2) Quarters where virtually nothing is released but a company runs a significant net profit
Overall, Take Two would be described as "treading water" until recently. It floated in GTA years, sank every other time. But now GTA is so huge that it may more than cancel out those sinking years with no GTA release.
rbanke
Member
Is the GTA V number inflated because of trade-up from old gen to new gen (there were lots of good deals on trading PS3/360 to PS4/XBO) which would make a GTA 6 unable to come near this number? And if that is the case and a GTA 6 sells lower would it be considered disapointing or do they keep repurchases (or lack of) in mind for sequels? Just curious how that part works.
I feel like Bioshock Infinite has a large part in this, as crazy as that sounds. Infinite took forever to release and didn't sell nearly enough to make up for it. The studio, for all intents and purposes, closed as a result.
I agree with you 100%.
ThePinkServbot
Banned
I can tell you right now that this is absolutely how I've been looking at video games since the latter half of the previous gen now. It doesn't take a genius to realize that an industry full of companies that pump out $100M games, sell massive amounts of said games, and still don't make a profit, is an industry that is set for a cataclysm of some stripe; if not a financial one (it will be a financial one), then a creative one (it will also be a creative one.)
I sort of "stepped out" of that scene a couple years ago when I started going to school and lost a lot of my time anyway, but truth is, even before that, I was sick to fucking death of "epic experiences." I was sick of the Uncharteds, I was sick of the kind of thing Ryse was looking to be, and I was sick of every single player and EVERY multiplayer experience trying to "turn the epic-ness up to a mothafuckin' eleven!!!! *guitar solo*", so now all I play is shit that belongs to the low-requirement indie darling sect. All I really get into now is stuff like Hotline Miami, Shovel Knight and La-Maluna, stuff that you could run on a toaster, to say nothing of the computer equipment I commonly use for school. And as you said, I am perfectly fine Getting By on just that, indefinitely, since the kind of experiences I want are fully represented and realized (and more and more every day, thanks to the way that end of the industry is blossoming (i.e. kickstarter)).
My guess is that there will always be a spot for consoles and dedicated hardware, but I expect that margin to get smaller and smaller as folks who were really into the CoD experience and whatnot fall back to Candy Crush as they get bored, and folks like me go on to the indie shit. It's sort of sad, but I'm happier with what I'm playing now than I used to be.
mckmas8808
Mckmaster uses MasterCard to buy Slave drives
Evolve sold 2.5 million.
mckmas8808
Mckmaster uses MasterCard to buy Slave drives
And people want a digital only console. LOL!!!! It'll be the worst idea of all time at this point.
That's a AAA IP which won shit ton of awards at E3.
FreedomFighter
Member
How do you sell 52 million copies of a game (along with other great selling software) and still post a lost? Damn.
Zombie James
Banned
They didn't sell 52M in one year.
BiGBoSSMk23
A company being excited for their new game is a huge slap in the face to all the fans that liked their old games.
It is in trouble.
When you sell 52 million copies of a single product at 60+ dollars and still end up with a 243 million loss, you're in trouble.
It's about profit not revenue volume.
KuwabaraTheMan
Banned
I'm not an expert on these things, but if they were misrepresenting their profits couldn't their shareholders sue them into the stone age?
The vast majority of those sales occurred in the previous fiscal year.
It also isn't terribly surprising considering Take Two has a long and well documented history of being AWFUL with their development budgets. There was a solid three year stretch around 06-08 where they only ever posted profit in quarters a GTA game released.
Yes, you are living underground. Like "inside the core" deep.
Look at the front page of /r/gaming at any point and a good 5 or more posts will be about GTA V. Youtube is like filled with GTA V let's plays. Even the extremely casual gamers know all about it. Everyone plays GTA V.