Take-Two Interactive cut its forecasts for fiscal 2005 and 2006, citing the delay of a popular title for a handheld and uncertainty surrounding the launch of new game consoles. Take-Two’s stock tumbled 11% in morning trading on the Nasdaq (down $2.43 to $18.22). Another delay, that of Elder Scrolls IV: Oblivion, has lowered first quarter forecasts for fiscal year 2006.
Citing the postponed European release of Grand Theft Auto: Liberty City Stories for Sony PlayStation Portable, Take-Two said late Monday that it now expects sales of $1.18 billion to $1.19 billion. In September, Take-Two cut its fiscal 2005 forecast to call for revenue of $1.22 billion to $1.27 billion. Analysts, on average, were expecting the company to post fiscal 2005 revenue of $1.19 billion, according to Reuters.
The company also attributed the change in its current-year forecast to reduced catalog sales and softer-than-anticipated initial retail orders of new releases, which also had a negative impact on its distribution business. Ã¢â‚¬Å“The guys who’ve got the proven titles are going to do well,Ã¢â‚¬? said analyst Michael Pachter of Wedbush Morgan Securities, adding that Take-Two has recently introduced a number of new games. Ã¢â‚¬Å“Retailers sell what they know.Ã¢â‚¬?
As mentioned above, Take-Two also lowered its forecast for the first quarter of fiscal 2006, saying it would deliver The Elder Scrolls IV: Oblivion and launch the Japanese version of Grand Theft Auto: San Andreas later than planned, resulting in a change to its full-year estimates. Take-Two’s new estimate for the first quarter of fiscal 2006, which includes the holiday season, is for net sales of $300 million to $350 million. The company had previously said it expected revenue of $350 million to $400 million.