SAN FRANCISCO - Take-Two Interactive Software, owner of the blockbuster Grand Theft Auto video game series, posted a wider loss yesterday because of a big charge and more sales of less profitable co-published and licensed titles, sending its shares down 12 per cent.
The video game industry is struggling witha rocky transition to new console technology as consumers wait and save for new machines.
For the fiscal second quarter to April, Take-Two had a net loss of US$50.4 million ($81 million), or US71c per share, compared with a net loss of US$8.2 million, or US12c per share, in the same quarter last year.
The results included a US$26.3 million charge, or US24c per share, related to write-offs and studio closures. The company also said profit was hurt by the high percentage of lower-margin revenue from co-published and licensed titles.
Revenue rose slightly to US$265.1 million from US$222.1 million in the period a year ago, when the company had strong sales of Grand Theft Auto: San Andreas. Analysts, on average, had expected Take-Two to post a loss of US11c per share, excluding items, on revenue of US$256 million.
The weakness will likely persist until Microsoft's new Xbox 360 and the upcoming PlayStation 3 from Sony and Nintendo's Wii build audiences.
Take-Two said it expected additional costs of about US$3 million in the third quarter related to closing a development studio, and another US$3 million in total during the third and fourth quarters for the relocation of its international publishing headquarters to Geneva, Switzerland.
The company also said it still expected to return to profitability in the fourth quarter of fiscal 2006, and announced that the Federal Trade Commission had concluded a previously disclosed inquiry into advertising claims for Grand Theft Auto: San Andreas.
Take-Two shares rose US25c, or 1.5 per cent, to US$16.77 in regular Nasdaq trade. In extended trade, the stock fell 12 per cent to US$14.79.
