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Take-Two rakes in $240m from microtransactions, DLC in Q1

Rockstar Games parent company Take-Two reports strong Q1 earnings from digital.

Published Tue, Aug 7 2018 6:14 PM CDT   |   Updated Tue, Nov 3 2020 11:51 AM CST

Digital continues to drive quarterly earnings for Rockstar Games parent company Take-Two Interactive, in no small part thanks to GTA Online's continued success.

Take-Two rakes in 0m from microtransactions, DLC in Q1 76 | TweakTown.com

Every year Take-Two leverages its popular slate of IPs to rake in considerable earnings, but it's not all about raw game sales. Popularity is now typically measured in ARPU and MAUs, especially when premium games like GTA V have live service modes attached to them. The industry is pivoting more towards digital revenues and Take-Two is a major player in this regard.

In Q1 of its Fiscal Year 2019 timeline, Take-Two Interactive continued its long-running trend of digitally-focused revenues. Digital made $315 million in Q1, up 17.4% year-over-year, and accounting for a whopping 81% of the $388 million earned from total net revenues. What's even more indicative of Take-Two's strong engagement performance is how much of its digital revenues are made up of recurrent consumer spending (ie microtransactions, DLC, etc) hooks that are attached to most of its key games.

In the three month period ended June 30 the publisher pulled in $240.56 million in recurrent consumer spending, up a mighty 40.4% year-over-year from $171.38 million in Fiscal Q1'18. These purchases made up 62% of total net revenues and were mostly propelled by GTA Online and NBA 2K.

(Cont. below)

Take-Two rakes in $240m from microtransactions, DLC in Q1 53 | TweakTown.com

Take-Two's forecast for Fiscal Year 2019 is quite beefy. Backed by the might of Rockstar Game's titanic Red Dead Redemption 2 and its annualized sports titles like NBA 2K and WWE, the publisher expects to make $2.5 to $2.6 billion in total net revenues in the fiscal year ending March 31, 2019, up a sizable ~40% from the year-ago fiscal timeline.

So what does this data ultimately mean? Expect Take-Two to continue this strategy moving forward, especially in major releases.

In fact, company CEO Strauss Zelnick has affirmed that the publisher's games will continue leveraging live services to foster engagement and, by extension, recurring revenue streams.

We should see this gameplan manifest in major key titles like Red Dead Redemption 2, which has a confirmed online mode that should be monetized similar to GTA Online, as well as Gearbox's upcoming Borderlands 3.

Also I'm quite curious to see how the digital mix manifests for FY19, and if GTA Online moderates or slows down once RDR2 releases in October. The game's launch could catalyze both net bookings and digital net revenues if it launches with baked-in microtransactions and steer GTAO players into the Western realm.

NEWS SOURCE:ir.take2games.com

Derek joined the TweakTown team in 2015 and has since reviewed and played 1000s of hours of new games. Derek is absorbed with the intersection of technology and gaming, and is always looking forward to new advancements. With over six years in games journalism under his belt, Derek aims to further engage the gaming sector while taking a peek under the tech that powers it. He hopes to one day explore the stars in No Man's Sky with the magic of VR.

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