Microtransactions Are Nearly Half Of Take-Two's Sales Now

Does the latest financial earnings report from Take-Two point towards an industry future?

News by Mike Williams, .

Take-Two Interactive Software released its financial earnings report for the second fiscal quarter of 2018 ended on September 30, 2017. For the publisher, it's an interesting release, because it may paint a picture about where the gaming industry is heading. If you want to know why every major publisher is adding loot boxes and other microtransactions, this is why.

Take-Two reports that net revenue was up 6 percent year-over-year landing at $433.6 million. Despite that, the company saw net losses of $2.7 million, compared to an income of $36.4 million during the same period last year. The largest contributors to net revenue were NBA 2K17, Grand Theft Auto Online and Grand Theft Auto V, XCOM 2, and WWE SuperCard.

GTA Online sees brisk microtransaction purchases.

Then there's net bookings, which is Take-Two's new version of net sales, accounting for physical shipments, digital sales, and everything else. It's the operational metric that Take-Two is using that doesn't taking into account deferred GAAP revenue (money stuff for those not acquainted with reading these releases). Net bookings were up 20 percent to $577 million for the quarter. More importantly, net bookings from recurrent consumer spending grew 84 percent year-over-year and accounted for 42 percent of total net bookings.

To be clear, Take-Two defines "recurrent consumer spending" as "virtual currency, add-on content and microtransactions". That means nearly half of Take-Two's sales for this quarter came from microtransactions. The biggest contributors here were NBA 2K18, NBA 2K17, Grand Theft Auto Online, Grand Theft Auto V, Dragon City, Monster Legends, and XCOM 2.

"Our positive momentum continued in the second quarter, enabling Take-Two to deliver another period of better-than-expected operating results," said Take-Two CEO Strauss Zelnick. "Grand Theft Auto Online delivered its best quarter yet, Net Bookings from Grand Theft Auto V grew year-over-year, and we enjoyed the successful launch of NBA 2K18, which generated growth in both units sold and recurrent consumer spending."

NBA 2K18 is raking in the money too.

On NBA 2K18, the game came under fire from consumers and press for its implementation of virtual currency. Yes, microtransaction sales are up. Zelnick told that the game shipped 6 million units during its launch quarter, up 20 percent compared NBA 2K17's launch. Total users and average daily users, up 30 percent. Recurrent consumer spending? Up 57 percent. The talk is not matching what consumers are actually doing.

The company is raising its forecast for the full fiscal year due to "the strong performance of Grand Theft Auto V and Grand Theft Auto Online". Note, Grand Theft Auto V first went on sale in September 2013 for PlayStation 3 and Xbox 360, with a subsequent Xbox One and PlayStation 4 release in November 2014 and PC release in April 2015. This is, at least, a two year old release that's still driving sales for Take-Two, largely on the back of microtransactions through GTA Online.

The market is telling publishers that they love microtransactions. And publishers are listening.

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Comments 6

  • Avatar for KaiserWarrior #1 KaiserWarrior 11 months ago
    Look upon our works, ye conscientious consumers, and despair.
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  • Avatar for Damn_Skippy #2 Damn_Skippy 11 months ago
    We're all going to hell in a hand basket. 'Games as a service' is the new 'pro-active'.
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  • Avatar for Captain-Gonru #3 Captain-Gonru 11 months ago
    Who the actual fuck is buying Shark cards in GTA Online? With little effort, I had full garages of fully modded cars, every assault vehicle, planes, every weapon (always fully loaded), and most every outfit, without ever spending any actual money outside of the purchase of the game itself. And I STILL had multiple millions of dollars in the bank. And this was all still on the 360 version, which had fewer money making opportunities.
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  • Avatar for WiIIyTheAntelope #4 WiIIyTheAntelope 11 months ago
    @Captain-Gonru altogether too many people are buying them. Which is another reason GTA V consistently stays near the top of the sales charts. People are buying low priced copies of the game with the included shark card for less than the actual microtransaction. flipping the disc on ebay, and repeating the process over and over and over. It's actually pretty sickening how much people are investing into the game.

    So when RDR is released, expect that to be even more greedy.
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  • Avatar for Jonnyboy407 #5 Jonnyboy407 11 months ago
    Geez... This is horrifying
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  • Avatar for mobichan #6 mobichan 11 months ago
    @Captain-Gonru I think the people paying for it are not as traditional a gamer as you or they are people who no longer have the time to invest in games and want to spend a little extra to jump into the content sooner.

    I'm more than happy to ignore games like these, but there are a lot of non-traditional players entering the gaming space and big companies know how to tap into their psychology to squeeze extra dollars out.
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