Take-Two Interactive Software (TTWO) 9 Feb 212021 Q3 Earnings call transcript

Greetings and welcome to Take-Two Q3 Fiscal Year ‘21 Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host Nicole Shevins Senior Vice President of Investor Relations and Corporate Communications. Nicole. you, Thank

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behalf To On for Operator? your our take Karl. team, entire We'll and and for of for like to questions. continued thank hard I'd their appreciation to commitment Lainie our your our another express colleagues delivering excellence now management want support. to Thanks, shareholders, our outstanding work, I quarter.

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change opportunity, how expectations? Online? player online even single that an environment did in existing compare how does percentage, versus GTA your you that So like And do internal

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next question. Colin Please Our your proceed Robert W. with Sebastian question Baird. from with comes

questions Great. me. afternoon, Good Two from everyone.

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with your Doug Our Please question. & Cowen with next comes Creutz question proceed Co. from

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I said year. think you guys last it's very what similar to

there? categories, should same understand, how and think being better how about think new AAA, to about way guess the between games we the like we we some had apart? mid-tier you just between what titles? XX then mobile, And is, have the do titles of XX ago ones within kind that this shutdown I we in more year between you'd Anyway, a breaking that this is just question So between or

one. this take I'll Karl, it's Brain, Hey,

that since moment it on haven't really So of to the we updates given part out, then. we question, first time was answer the titles there a we the was XX put any a -- in and that snapshot,

course, time. really all been things in since hasn't move out It long Of the and that then.

are significant of you back tell end. can't fluid, that again sure. But, will there's have going these something be pretty a really generally get for pipeline still movement, that expect we But amount general. fallen but to can in milestones. numbers I through various expect we you speaking, something So things that do this that There's good on, be are as

additional to provided any So that terms what bit the will it And announcement it comprises you, we we break just in haven't updates, that of But changing down XX other be made. XX. overtime. little initial than a for

arcade are we XX them of experiences. XX the consider So them would XX mid rest of are, are of what of them to high them the titles And we core intellectual are style of of core level, sequels. those experiences. XX sort would titles experiences gaming consider on a the be or of existing And our new of half XX are for property. About and from IP casual

platforms, on then of And important, mobile. that very titles will spoke of I so of also be PC planned IP, those new or in investments the making are including terms console we XX that So seven about streaming, earlier. available for XX in are

completely that that free So business on for are perspective XX from are of the are a XX to for the specifically mobile. And leave XX XX purchase model play. that the they would -- also are list required and

deeper But years. breakdown So moving next that was that we do over time we few we expect it into the we be as around as go as it. will and did that last the pipeline that's the

Okay. Thanks, Karl.

you. Thank

next comes question. Deutsche with Kraft question your Our proceed Bryan Please with from Bank.

mobile. thinking behind likely about strategy afternoon, to you. how is capital make good the gaming latest and and terms and put much mobile what resources the we'd of this Thank broader games succeed, point, your mobile sense what of for space? Hi, you in IP at forward to opportunity to And are love understand the in going kinds

Karl a again. It's

with our more component becoming of and of has Point Playdots. obviously, acquisition business mobile more the and So important Social our

committed et cetera we're levels, with NBA our properties. mobile WWE, SuperCard, very specifically some to mention So XK activity to it. and Not label

is the around Social that's and Point growing first new for Playdots of our But strategy around So in we that our and even new mobile really boils components. the it creating a a it really business mobile does expect highly invested be our down are, -- forward. the And will space. are part boil we to And we going few -- IP investment focuses business.

it's investing that's that in those to but And, So years, environment. between sizable created now IP the we've pretty M&A now got obviously two that over the organically been acquisitions. also mobile specifically platform couple specifically for past we've a

our bringing franchises core The mobile component is second to the platforms.

slight So existing more content that they these are or of games are exists. be could that variations games, or ports less

do just So bringing where And component is third it's experiences. we've done experience that to And our the continue quite many successfully will appropriate. so years. then for our is really core with mobile many, integrating core a

in your you And or used the can of to experience, console. core a time be a we've same companion So your your with it with it Redemption, done Red you're experience use. Mafia’s, maybe you separate mobile have are things can offline, our Dead done done like franchises, of we've at which these it pretty we've of front that effectively enhance not television where much number with apps, set when can

those the investing strategy. are So of into we're of it. part And it's more. our obviously components are really But We're a the more industry. very and growing tapped

Thanks, Karl.

question. proceed Please Securities. Thank you. from is [Operator Truist Thornton Matthew Instructions] question Our next with your with

could, Thanks maybe good afternoon, or I the question. Hey, either Maybe, for if Karl. two everybody. Strauss for taking

reviewed. any higher of PGA early, level, then to the referred earlier. to pipeline just pipeline, any it's it color linearity but just if is little be but fairly I'm game a maybe TOUR, just we're as just and like there's the what the And shaping projects up is offer as helpful how bit you there look any incremental if to can secondly, would kind color small XX was you there. thoughts well around just it's progressing to a one the wondering little First

become successful actually there? and I large am and Thanks, it join So by like curious could all that looks in thoughts WWE NBA are enough that if where accounts, it number any regard, guys. successful was title a recurring

part when pipeline, don't a the titles assured, of the in but And the that hearing more on information of pipeline as more talk months. be in terms the give I can really pace that will I about of rest coming first about have we you our lot schedule. and out, you So the coming release

about -- incredibly to don't surprised. getting performance sold result. to I'd I TOUR have then you excited that we which it's units And not just But I that. am a million that title. a the X unfortunately, or we personally of that well, is so little that, PGA And the XK, terms really around like bit more on give So fantastic fantastically in started. we're of any we're say done we've And are surprised

think a this do in franchise we So us. future for there's that

haven't about going announced we what us much forward We for what really something merits many profitable is specifically like really out feel And there, this that But years. exciting is can we turn very into means. side. that investment for that something and it that that's from franchise our

Thank you.

Please next proceed with Our with question Evercore comes ISI. your Benjamin question. from Black

Great, thank the for question. you

the give disaggregate today. of is with how hear you. benefited online are there? curious game, confidence you really curious Dead am stay-at-home that a one little and So to the bit a seeing core we're ‘XX, we the Thank the secondly, I'm stage gaming category more deferring provisions, a And could decision or could if what data as Red to points you comfortable of relative these to And GTA trends some Online sustainability whole but key wonder I Dead findings seeing Red as account the what look hear as I have trends extended talk about from of the lifecycle? has Online to us, at to from the obviously some you're then

first bookings of guiding higher the to had very to And to do We would and for that net we data for well. on to be outperform quarter I, not continue that fourth Sorry, pressed guidance. our hard question I'm numbers an than that our to very except high. in the know the not we continue is million what we're engagement see But has the course, the are been growth now original that fiscal our driven $XXX pandemic by approach. planned

the So grateful growth. for we're

any hopefully circumstances, there and pre-pandemic I think, under be demand. will will be than demand post-pandemic higher post-pandemic

that question favor confirm are in there be outside quite activate But as I some whether again? as me and a know doing, What it's things there's if don't media there'll home, as of long about a systemic doing that, was and that. continue second and surprise but it been to fall-off your of Interactive think great shift continued were, Entertainment see wouldn't out consultancy people think clear I the we growth. deliver experiences, I we'll

lifecycle? question Online. how its fairing Dead was to online relative desegregate comparable Second Red of GTA now also, the to the around Dead Online of Red stage really And decision is

So they're and way. they're very different not comparable in any titles really

time. to of And really as increase the seeing ‘XX. some And enjoyment. shown standalone two based Rockstar forward for to more well. marketing size enhance sales massive out And title, willingness to with different the hits. audience models, effort Auto Grand in both has on how think So when Theft looking Online to the in is and I engage a it's engagement been working to the offering experiment a and the customer an experience decision And titles I'm was market think in fiscal opportunities I with all available

Thank you much. very Excellent.

Thank you.

question the Benchmark comes Company. Please your question. with from Hickey next Our with Mike proceed

guys. up ‘XX but lot sort in quarter you've to taking incredible guide. like thanks fiscal going Congrats obviously life questions, a Looks on Nicole of I lasting. know as for my a year we is early, an Karl, momentum service. of and here, engagement Lainie, be Strauss, about it's and here step think your got

and curious sort pipeline. on exactly can't you I guys. just you fiscal you that. the on sort your And the -- the Maybe or grow just the year [indiscernible] sort [indiscernible] culture you to expand grow home here when visibility ‘XX medium-term Thanks, have think has the look developer impact if duration answer looking obviously some work the Obviously, forward and continued sort in more, of pipeline? curious productivity have had can of second do to? is you grow the of scenario of am just You is, that from you and of question

Hey, Mike.

how individuals fiscal growth ‘XX. We're the ‘XX our So know, budget Also, And point, year be And a guide in our is seen ‘XX fiscal than us was a sequential of $XXX process double to represents ‘XX. for ‘XX over for original detailed At over expect flow net this originally our little currently us, this more fiscal from we're also trends next will typically when cash on. partly fiscal home fiscal in remains guidance we fiscal it's bookings ‘XX, ‘XX May. growth keep sheltering to million, adjusted for now decrease long projected fiscal is by And quarter and year-over-year fiscal important versus and benefit early our for for which guidance provide to when a these guidance. record fourth it's record we for the estimate. year original in driven year, for as record that growth of it fiscal report which go earnings our unrestricted to you at completing mind the fiscal ‘XX, compared operating we But XX% we clearly XXXX. expecting projecting

that in of at give will see we'll you May, a an bit point. little So update

details you more give we'll ‘XX. some when that's So on

working regard follow, facts. what can't And case. Mike to government the be much and We are suggestions requirements I the we home, that'll and predict and with science how from longer the follow

office, extraordinarily open, our said, of to the That obligated are been Some if we've is to uncomfortable so. they're come one no productive. doing offices in

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speaking think work that's to or benefit together a home think able I interest, will as I from be their certain group. being people from truly may generally if

Thank you.

with MKM with Please proceed Handler Eric your from comes question next Partners. Our question.

Thinking that terms -- in Yes, obviously out perspective of just do think thank franchise people and the there's I And you remastering before sold how pre-prior people any of of content GTA than units seems games Auto have that huge like there the of one And for have granted copy played how never huge a appetite it we've that. probably prior what's the game. came GTA other or games. about IV wonder, thinking GTA that some there your you. Grand about fact more now the million appreciate overlap, there's audience about, the is over probably the question. a game. I and XXX where of Theft But

than inclined say And question. question. release more I'd kind great of schedule updates as to it leave statement a it's from encouraging on I'm any come our a a and Rockstar will Games.

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Thank you.

question with with Please proceed next Credit Suisse. Stephen your Our from comes Ju question.

model. advertising front called the Okay. are game And last iteration that he all now perpetual answer, out, campaigns acquire where is with in Thank industry over Strauss, a of every was to customers years, you there was has so I few from time the needing massive think new to prior of much. a the gone your just with in time. captivation I basically a engagement up user again set base service and think, you a what the

to for a But anticipate the not you due served further time going and are question. you pretty better at Take-Two’s excellence to XK, Thanks. operating have already guess, Rockstar be already do benefits be a probably good adding do might of you there potentially one of or either culture seems So your and where decreased capital spend? what forward an earlier need this think And there? I marketing teams margin on is questions building the definitely M&A to

It's we're -- to don't thank launching we're iterations see in I going market. existing because a And the competitive to new those think spend, reduction support for question. of our releases. think highly you're spend property continue And new franchises. in intellectual launching marketing you I a a we'll

there. think see leverage don't you'll So I

You though, is more see sell when units. you of leverage, course,

make hits, you're across in we hits that number anyone obviously else make bigger spend you if larger market, then a of and bigger than units. amortizing marketing the So

accepted seen be percent So be we'd higher operating in And that years. the but hope XX certainly as margins. growth that And in you entirely event, your operating have reflected I that's And a marketing that you've growth we of seen course, have continue, success. in we hits would spend in bookings the have goal. greater in whatever of a the will as lower by margins, success our don't And have. last our driven our can net you've to or that

costs which with digital products our where higher is the Also, margins. quarter. margins is the lower digitally related more heading the which recurrent because [mile] course, And help happening recurrent the to of I extra consumer in margins towards margin competitors’ of would an and have well cost associated little large is And release. world more spending that consumer growth as we and can, think content our than be confidence were our will to in initial XX% that spending that. in as around is drives than our think distributed the is the net shift distribution, the you a an bookings that

as the to if don't that you continue titles, deliver creating from we hits. in an to And upon hits. So reliant But won't well. which occur operating could our we margins beloved create content, again, is extent that goal, see that's add-on that increase more to coming

So and strategy. bigger our And everything hits. comes bigger to down and our that's creating goal

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and Karl, on above, reminder, they for of and question, we're think team's properties it's to on Sorry I bigger Rockstar XK your more properties. the the and the thanks work second all as adding

to we at teams as Division very, new a add work Point And very Private properties. are way as selectively we well to the acquire We on selectively. Social have and and that companies shown willingness adding

So see our growth we're I'm goes corporate to business. a and doesn't to capacity, production you'll headcount hopeful fixed headcount. go engineering overhead. And our essentially capacity on that that

Thank you.

Thank you.

Our from America. last question of with question. comes proceed with your Please Ryan Bank Gee

right me Hey, in guys, for squeezing there. thanks

of demand a saw us indoors. gaming Lainie, last we're that for away one increased month we most when content. from First were about year And all sent for

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Ruffian believe acquired specifically. year. shooter Halo guys late have Games franchise I that Ruffian a history Rockstar they last the with the You or category in a acquired

more what or are development or more anticipate of So and like board future studio designers the reached Thanks. either they'll broaden lead supporting coming to in do play that Rockstar’s you that role on they role?

that they'll and And more to and talented to thrilled Take-Two the they're due an Rockstar of forward Games be welcome Rockstar to a Games. team. we're part beyond looking And extraordinarily in to time. them We're we Ruffian think announcements team becoming

of overachievement with basis. -- title-by-title that over can title-by-title on on have year me, we was a It NBA on all the -- Ryan in you that. specifically GTA front last we but and the And don't our I up significant that that in XK. on I a quarter information online think for on follow But performed titles, quarter of fourth for but

Thanks, nice. Very guys.

Well, the joining thank to grateful colleagues And we're extraordinary. us course, you grateful has all to proud today. results all world. are our The the are us for achieved. entire joining around us team Thanks And for really very so much so today. of you of Obviously, we're much. what of

conference. This concludes today's

this your your time. wonderful lines evening. you You disconnect for at Thank participation. may Have a