Take-Two has posted a Q3 profit of $12.4 million, its second profitable quarter in a row. The company has beat out analyst predictions that earnings would be jeopardized due to tremendously long development cycles and concerns over management.
The profit is largely due to the continued strength of Red Dead Redemption, a game that continues to defy estimates. Take-Two announced that in total, 6.9 million units have been shipped, resulting in $354.1 million in sales. This is a significant increase from $94.9 million reported in sales reported for the same quarter in fiscal 2009. Sales also beat out Take-Two’s own forecast of $250 million to $300 million.
Over the past nine months, Take-Two has been able to report $785.3 million in sales, up from $418.5 million during the same window in fiscal 2009. Despite these gains, the company still saw a $4.5 million loss in the first nine months of fiscal 2010. This loss, however, is noticeably smaller than 2009’s reported $122.6 million.
Speaking on the company’s call to investors, CEO Ben Feder stated, "At a time when consumers have continued to be highly discerning with the way they spend their money, Rockstar has proven that innovative triple-A experiences can still command a blockbuster audience and market share."
"Today we are better positioned creatively, financially and geographically than at any other time in the company's history," Feder said on the call. "We're also more diverse than at any other point in our business."
Although Take-Two is looking more and more positive in sales, the company did acknowledge that L.A. Noire would indeed be pushed back to “the first half of calendar 2011.” The wait is worth it though, says Feder. The technology and design are “revolutionary” and he is happy with the “incredible response” upon revealing the title to a meeting of GameStop managers. Take-Two is “confident that the investment of additional time will translate into another critical and commercial hit for our company."
Though analysts continue to criticize the long development cycle, Take-Two raised its estimates for the upcoming quarter, planning to see $270 million to $320 million in sales, versus a previous forecast of $200-$250 million.
