It's that time of year again when we hear all about how publishers and platform holders have fared during the last financial quarter, and Take-Two Interactive seems to be extremely pleased with their performance. The company had better results than anticipated thanks to the "record breaking launch" of a certain cowboy title, as well as a "strong performance" from the latest NBA 2K game, and the continued popularity of Grand Theft Auto.
Red Dead Redemption 2 had the "biggest opening weekend in the history of entertainment". It sold over $725 million during its first three days on sale. In fact, it sold more copies during its first eight days on sale than Red Dead Redemption sold in eight years. It has since sold more than 23 million copies worldwide to become the "best selling video game of 2018". Unsurprisingly, Take-Two is hoping the game continues to be a major driving force for them as Rockstar continues to provide updates for the growth of Red Dead Online.
The other notable new release for the publisher was NBA 2K19, which according to CEO Strauss Zelnick, also "exceeded our expectations in the third quarter". Not only was it the best selling sports title in the US in 2018, Take-Two is expecting the game to sell slightly more units over its lifetime than its predecessor. The online community for the title continues strongly with nearly 12 million games played daily, and a recorded increase in daily active users, especially in MyTEAM Mode. Most importantly, though, microtransaction spending increased by 39% in Q3 to record levels, and it was "the largest single contributor to recurrent consumer spending in the period".
Microtransactions play a big part in Take-Two's revenue. In Q3 alone, this part of consumer spending increased by 31% to a new record for the publisher. Their free-to-play mobile titles do well for this reason, while Grand Theft Auto V, or more specifically Grand Theft Auto Online, also plays a big part in "recurrent consumer spending". Between Grand Theft Auto Online and Red Dead Online, Rockstar managed to hit a record for "combined monthly active users" thanks to regular updates for both titles.
Despite the importance of microtransactions for Take-Two, there are no plans to switch to free-to-play console titles just yet. Take-Two would rather focus on an "amazing AAA experience" that encourages players to keep playing their games long after release. When pressed by an investor as to why the publisher would not be pursuing a free-to-play battle royale model like Fortnite, Zelnick had this to say:
So what we found is you give consumers what they want. That's often reflected in reviews and Metacritic scores and the Red Dead Redemption 2 type Grant Theft Auto V with the 97 score. They will show up and they show up in quantity. So I'm not worried at all about someone else establishing a free-to-play approach. As long as our quality continues to be stellar, and that's a very big "as long as", that's what we have to execute against every day. Consumers aren't actually super price sensitive where entertainment is concerned. Or said another way, if we put out something that people don't want, you can kind of price it whatever price you want, they're not going to show up for it.This means there won't be a stand-alone Red Dead Redemption Royale any time soon, with those experiences kept firmly as an extra mode in their existing titles, so what does the future hold for Take-Two? Well, Ancestors: The Humankind Odyssey will be released this year from Panache Digital Games, while Obsidian Entertainment's The Outer Worlds will be released in fiscal year 2020, so sometime before March 2020. More content will be released for Kerbal Space Program Enhanced Edition, although there were no details on this. Finally, there's an "unannounced title from one of 2K's biggest and most beloved franchises" (possibly Borderlands 3), which is also aiming to be released during fiscal year 2020.
Aside from this, Take-Two has just formed a new development studio. While the studio doesn't yet have a name, it does have a president: Michael Condrey, best known as the founder of Sledgehammer Games. The team will be working on a new project, and they're hoping Condrey's experience with the Call of Duty and Dead Space franchises will lead to success for the title. As soon as we hear more about it, we'll be sure to let you know.