Game publisher Take-Two Interactive (NSDQ: TTWO) is struggling to evolve into more than just a one-franchise company — but without a Grand Theft Auto release to pump up sales, it continues to lose money.
It posted a 72-cents per share, $55.5 million loss for Q309; that’s in contrast to a 67-cents per share, $51.8 million profit in Q308, but also a bigger loss than in the previous quarter. Revenue was also down sharply year-over-year and sequentially.
The poor performance disappointed investors, who sent the stock down by about 3 percent in after-hours trading — though Take-Two’s sales actually beat analysts’ expectations by about $8 million.
|3Q 2009||3Q 2008||Analysts Estimates For 2009|
|EPS||-$0.72||$0.67||-$0.65 to -$0.75|
|Revenue||$138M||$433.8M||$120M – $130M|
— Out from the shadow of “Hot Coffee”: Take-Two was rocked by scandal in mid-2005 when a sexually-explicit mini-game was discovered in then best-seller Grand Theft Auto: San Andreas. Part of the problem stemmed from the company’s insistence that the scenes were only accessible if gamers actually modified the game’s original code; opponents alleged that the sex scenes had been included from the start.
In addition to harsh words from politicians and a class action suit filed by consumers that purchased the game for minors, Take-Two also faced a consolidated securities suit filed by investors. The company announced today that it settled the consolidated securities suit for just over $20 million — of which it will pay about $5 million. The balance will be paid by its insurance carriers. Take-Two said it already accrued for its portion of the payout in previous quarters.