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.
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."
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 Gamesindustry.biz 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.