Take-Two’s financials, released yesterday, show that the majority of the company’s net revenue and net bookings have come from their mobile division. At 52% net revenue and 47% net bookings, this signals a major shift for the (previously) majority console and PC oriented company, shifting from a console first to a mobile first company in less than a year. This is significant for a company that still holds major licences such as Grand Theft Auto, Borderlands and both the NBA and WWE 2K franchises.
The normally lucrative console revenue for Take-Two, including their blockbuster franchise GTA, has now been surpassed by revenue from mobile. Even as these franchises pivoted to ongoing live service models such as Grand Theft Auto and Red Dead Online, it shows that mobile can outdo them all. This is a shift that can’t underemphasised, as unlike many console games, GTA Online and a cycle of re-releases means that revenue from the most recently released instalment GTA V are still strong. But now, Zynga’s portfolio and the success of other areas in the mobile division have turned previously predictable revenue listings on their head.
Another significant factor was the ongoing success of their other mobile holdings, “Rollic’s hyper-casual mobile portfolio outperformed our plans, while we experienced some softness across other parts of our portfolio as the interactive entertainment industry faced continued headwinds.“
What do these financials mean for Take-Two?
It’s important to remember that there are numerous caveats to these reports. For one, T2 Mobile’s portfolio is now under the management of Zynga, the mobile giant that was acquired by Take-Two. Not only will their expertise have helped to boost previously T2 mobile managed games, but Zynga’s own massive portfolio and revenue is now a part of Take-Two’s larger mobile share and provided a corresponding boost.
All of this contributes to the fact that Take-Two has now become a mobile-first company in less than a year since its Q1 report in August, which noted mobile at only 32% net revenue based on platform. Despite this, management comments were cautious, but not negative, on the potential impact of macroeconomic circumstances in future.
Chairman and CEO of Take-Two, Strauss Zelnick in particular noted the impact Zynga had on their financials, “We continue to make excellent progress with our integration of Zynga, and we remain highly optimistic about the vast, long-term growth potential for the mobile industry, which is expected to reach over $160 billion in gross bookings within the next four years.”
The Zynga acquisition came in at #2 on our list of the 10 biggest video game acquisitions of all time for good reason. In this case the value of the acquisition has already made itself clear, softening the blow of such a massive deal. It remains to be seen just how Take-Two and the broader game market will react, as Take-Two have been a major company for decades. Their revenue shifting so massively and in such a short space of time will make other companies question why they aren’t making more significant investments in mobile.