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Take-Two Girds for a Tough Year After Record Period

The digital revenue is doing pretty well, though.

Rockstar Games / Grand Theft Auto V

Grand Theft Auto publisher Take-Two Interactive forecast a weaker than expected June quarter and softer fiscal 2015, sending shares three percent lower in after-hours trading.

The weaker forecast overshadowed a stellar end to fiscal 2014, which closed March 31. The company, which also publishes NBA 2K14, reported earnings per share in the fourth quarter of 21 cents, beating Wall Street estimates of 10 cents per share. Revenue for the quarter hit $233 million, beating expectations of $203 million.

However, Take-Two expects revenue to drop to between $120 million and $135 million in the current June quarter, versus analyst expectations of $209 million. The company forecasted a loss of between 25 cents and 35 cents per share, below the Street’s consensus of a 16 cent loss for the June quarter.

The new fiscal year is also expected to see a dropoff, with between $1.35 billion and $1.45 billion in net revenue, far below the record-setting $2.4 billion reported in the past year. Take-Two executives indicated on a call with investors that they do not expect a new game to have the same financial boon in fiscal 2015 that Grand Theft Auto V had last year, with subsidiary Rockstar Games representing about 45 percent of the company’s revenue.

However, Rockstar is scheduled to release something for the latest console generation before the end of March 2015, CEO Strauss Zelnick said on the call.

Of particular note looking ahead is how the gaming company’s revenue composition is changing: In the fourth quarter of fiscal 2013, digital/online accounted for about a quarter of the company’s non-GAAP intake, but in the just-ended fiscal 2014, it represented 52 percent. Take-Two said that growth was driven by digital offerings for the Grand Theft Auto series, Borderlands 2, the NBA 2K franchise, Sid Meier’s Civilization V and BioShock Infinite.

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