Take-Two Interactive Software Q1 2026 Earnings Call Transcript

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Provided by Quartr
August 7, 2025

Key Takeaways

  • Positive Sentiment: Take-Two delivered first-quarter net bookings of $1.42 billion, well above guidance, and raised full-year net bookings outlook to $6.05–6.15 billion (+8% at midpoint).
  • Positive Sentiment: The mobile business outperformed expectations, with TuneBlast up 22% YoY, Match Factory up 33%, and Color Block Jam becoming its highest-grossing title.
  • Positive Sentiment: The Grand Theft Auto franchise remained a powerhouse—GTA V sales now exceed 215 million units and GTA Online new player accounts grew over 50% year-over-year.
  • Positive Sentiment: Recurrent consumer spending climbed 17% (vs. 7% guide), representing 83% of net bookings, while GAAP net revenue rose 12% and operating expenses fell 3%.
  • Positive Sentiment: Strong pipeline ahead with blockbuster launches—The Old Country, NBA 2K26, and Borderlands 4—setting the stage for record fiscal 2027 net bookings and enhanced profitability.
AI Generated. May Contain Errors.
Earnings Conference Call
Take-Two Interactive Software Q1 2026
00:00 / 00:00

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Operator

Thank you for standing by. My name is Tina and I will be your conference operator today. At this time, I would like to welcome everyone to the First Quarter Fiscal Year twenty six Take Two Interactive Software Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session.

Operator

It is now my pleasure to turn the call over to Nicole Shevins, Senior Vice President of Investor Relations and Corporate Communications. You may begin.

Nicole Shevins
Nicole Shevins
SVP of IR & Corporate Communications at Take-Two Interactive

Good afternoon. Thank you for joining our conference call to discuss our results for the 2026 ended 06/30/2025. Today's call will be led by Straf Zelnick, Take Two's Chairman and Chief Executive Officer Karl Sladehoff, our President and Lainie Goldstein, our Chief Financial Officer. We will be available to answer your questions during the Q and A following our prepared remarks. Before we begin, I'd like to remind everyone that statements made during this call that are not historical facts are considered forward looking statements under federal securities laws.

Nicole Shevins
Nicole Shevins
SVP of IR & Corporate Communications at Take-Two Interactive

These forward looking statements are based on the beliefs of our management as well as assumptions made by and information currently available to us. We have no obligation to update these forward looking statements. Actual operating results may vary significantly from these forward looking statements based on a variety of factors. These important factors are described in our filings with the SEC, including the company's most recent annual report on Form 10 ks and quarterly report on Form 10 Q, including the risks summarized in the section entitled Risk Factors. I'd also like to note that unless otherwise stated, all numbers we will be discussing today are GAAP and all comparisons are year over year.

Nicole Shevins
Nicole Shevins
SVP of IR & Corporate Communications at Take-Two Interactive

Additional details regarding our actual results and outlook are contained in our press release, including the items that our management uses internally to adjust our GAAP financial results in order to evaluate our operating performance. Our press release also contains a reconciliation of any non GAAP financial measure to the most comparable GAAP measure. In addition, we have posted to our website a slide deck that visually presents our results and financial outlook. Our press release and filings with the SEC may be obtained from our website at take2games.com. And now I'll turn the call over to Strauss.

Strauss Zelnick
Strauss Zelnick
Chairman & Chief Executive Officer at Take-Two Interactive

Thanks, Nicole. Good afternoon, and thank you for joining us today. Fiscal twenty twenty six is off to an excellent start, reflecting ongoing demand for our core franchises and the increasingly diversified, successful nature of our business. Net bookings for the first quarter exceeded 1,400,000,000 which was meaningfully above the high end of our expectations, led by the outperformance of several mobile titles, as well as the continued success of NBA two ks and the Grand Theft Auto series. We're optimistic about the year ahead, and we're raising our net bookings outlook for fiscal twenty twenty six to $6.05 to $6,150,000,000 We have great confidence in our long term pipeline and expect to achieve record levels of net bookings in fiscal twenty twenty seven that we believe will establish a higher baseline for our business and set us on a path of enhanced profitability.

Strauss Zelnick
Strauss Zelnick
Chairman & Chief Executive Officer at Take-Two Interactive

I'd like to express my gratitude to all of our teams across our worldwide organization for their deep passion and intense commitment to our collective vision. We strive daily to do our best work and to exemplify our core pillars of creativity, innovation, and efficiency, all in service of our goal to make the biggest and best hits in the entertainment business. Turning to highlights from the period. Our mobile business vastly exceeded expectations. Peak's successful forever franchise, TuneBlast, grew 22% over last year and nearly 75 on a two year basis, driven by the seasonal collection feature that provided a new avenue of engagement for the game's millions of active players.

Strauss Zelnick
Strauss Zelnick
Chairman & Chief Executive Officer at Take-Two Interactive

Match Factory, another hit title from Peak, achieved record net bookings as the title grew 33% over last year. Players experienced new features such as the Treasure Cave event as well as new levels. Rolex's newest hit, Color Block Jam, maintained its positive momentum and has become the highest grossing title in the studio's history. Throughout the quarter, Color Block Jam remained at the top of the app charts, demonstrating its strong market position and mass appeal. Rollup supported the title with its first bold beat, Pilot's Drop, where players received progressively larger rewards with each consecutive win, amplifying engagement and monetization.

Strauss Zelnick
Strauss Zelnick
Chairman & Chief Executive Officer at Take-Two Interactive

Two ks's mobile offerings also had a great quarter, including WWE SuperCard, which remains the label's most successful mobile game with over 37,000,000 lifetime downloads. NBA two ks Mobile has been steadily growing its audience with new content and challenges, while NBA 2K25 Arcade Edition continues to top the Apple Arcade charts, and NBA two ks All Star in China has been posting strong and profitable results since its launch in March. We continue to focus on our mobile direct to consumer business, and we're achieving better conversion driven by new offers, events, and enhanced personalization. In the context of recent court rulings, we see ample runway for further growth in this area. The Grand Theft Auto series once again exceeded our expectations.

Strauss Zelnick
Strauss Zelnick
Chairman & Chief Executive Officer at Take-Two Interactive

Momentum remains exceptionally strong, and to date, Grand Theft Auto V has sold in over two fifteen million units worldwide. During the quarter, engagement for Grand Theft Auto Online benefited from the record setting launch of Grand Theft Auto six Trailer two and the successful release of the Money Front Summer Content Pack, which culminated in higher than expected recurrent consumer spending growth. We're pleased that new player accounts for GTA Online grew over 50% year over year. NBA 2K25 delivered another quarter of fantastic results. To date, the title has sold in over 11,500,000 units, and engagement grew significantly year over year, with daily active users and MyCareer daily active users each up 30%, which helped drive 48% growth in recurrent consumer spending.

Strauss Zelnick
Strauss Zelnick
Chairman & Chief Executive Officer at Take-Two Interactive

We're thrilled that two ks announced a new multi year global partnership expansion with the NBA, NBA PA, and WNBA PA, and extended its longstanding relationship with the NBA G League and USA Basketball. We're excited to continue our highly successful partnerships and look forward to building upon the record setting achievements that we've accomplished together. Engagement with our other sports titles has been healthy, including WWE 2K25, the title launched on Nintendo Switch two in July, which expanded its audience and featured same game modes that are available to players on PS5 and Xbox Series X and S. Paraxis Games continues to introduce monthly updates for Sid Meier's Civilization VII. In addition, the studio released the title for Nintendo Switch two, our first offering for the platform, featuring new mouse controls that offer a more intuitive gameplay experience.

Strauss Zelnick
Strauss Zelnick
Chairman & Chief Executive Officer at Take-Two Interactive

We're very pleased to continue supporting Nintendo with additional titles launching throughout the year. In closing, we're thrilled with our company's positive momentum and have enormous anticipation for this quarter's launches of The Old Country, NBA 2K26, and Borderlands four. We remain deeply committed to excellence, delivering the highest quality entertainment experiences for all of our audiences, and to driving meaningful returns for our shareholders. I'll now turn the call over to Carl.

Karl Slatoff
Karl Slatoff
President at Take-Two Interactive

Thanks, Traus. I'd like to thank our teams for delivering a fantastic start to the year and for setting the stage for what promises to be an exciting chapter in our history. I'll now discuss our upcoming releases. Tomorrow, two ks and Hangar 13 will once again immerse players in the detailed, rich, and storied world of organized crime with The Old Country. With more than 2,500,000 wishlists across all platforms, community sentiment for this linear, narrative driven action game is very strong.

Karl Slatoff
Karl Slatoff
President at Take-Two Interactive

Two ks unveiled a new story trailer during the annual Summer Game Fest show and provided the press with early playtime, which resulted in glowing impressions and previews. We are very excited to expand our beloved franchise and hope that players feel the passion and pride that our team brought to this exciting release. On September 5, two ks and Visual Concepts will release NBA 2K26, which promises to once again raise the bar for our top selling basketball experience. The title will be available on early access on August 29 and will be the first game from our series to launch on Nintendo Switch two, offering the complete Gen nine experience for the platform. With all new Pro Play features, players on Gen nine will experience our immersive technology like never before, including revamped size ups and fast paced dynamic movement.

Karl Slatoff
Karl Slatoff
President at Take-Two Interactive

Fans can build a transcendent My Player as they strive to reach the pinnacle of NBA stardom in a reimagined MyCareer journey and team up with friends to battle rival squads in a fresh and more optimized city. NBA 2K26's MyTeam will put past and present legends to test in new single and multiplayer modes while also offering 30 unique storylines to win a championship. More details on NBA 2K26 will be shared in the coming weeks. On September 12, two ks and Gearbox Software will launch Borderlands four, the eagerly anticipated next entry in our iconic Looter Shooter franchise. Recently, global press and content creators played the game for the first time, and response was extremely positive, with some calling it the best in the series.

Karl Slatoff
Karl Slatoff
President at Take-Two Interactive

In June, our team hosted the first ever Borderlands Fan Fest, where attendees played a demo of Borderlands four and generated over six hundred thousand hours of streams and videos. With the title launching on Nintendo Switch two in October, we are excited to harness the power of the new console and allow players to enjoy our mayhem fueled booter shooter at home or on the go. Later this fiscal year, two ks and Visual Concepts will once again challenge players to step into the squared circle with WWE 2K26, the forthcoming installment in our popular wrestling franchise that continues to set new standards for excellence with each release. TK will have more to share about this game in the coming months. This is one of the strongest lineups in 2K's history, positioning us to deliver best in class gameplay for our players and outstanding financial results.

Karl Slatoff
Karl Slatoff
President at Take-Two Interactive

Zynga will remain focused on continuing to enhance its existing portfolio and releasing new mobile titles. In closing, we are deeply excited about this year's release slate and our ability to deliver entertainment experiences that captivate and engage audiences throughout the world. As we continue to execute our proven strategy and capitalize on emerging markets and opportunities, we believe that we will achieve a period of meaningful long term growth and shareholder returns. I'll now turn the call over to Lainie.

Lainie Goldstein
Lainie Goldstein
Chief Financial Officer at Take-Two Interactive

Thanks, Carl, and good afternoon, everyone. We achieved outstanding first quarter results, driven by our strong franchises, talented teams and unwavering commitment to our strategic vision. Our performance was broad based across our label as we engaged players with exciting new game features and content updates, while also advancing development of our highly anticipated pipeline. I'd like to thank our incredible teams worldwide for their hard work and passion for our business. Turning to our results.

Lainie Goldstein
Lainie Goldstein
Chief Financial Officer at Take-Two Interactive

We delivered first quarter net bookings of $1,420,000,000 which was significantly above our guidance range of $1,250,000,000 to $1,300,000,000 This reflected better than expected performance from several mobile titles, including Tomb Blast, Mass Factory, NBA two ks All Star, and Color Block Jam, as well as NBA two ks and the Grand Theft Auto series. Recurrent consumer spending grew 17% for the period, which was meaningfully above our guidance of 7% growth and accounted for 83% of net bookings. Several of our businesses outperformed, including NBA two ks, which was up nearly 50% mobile, which grew low teens and Grand Theft Auto Online, which increased low single digits. During the quarter, we released Civilization VII from Meta Quest VR and Nintendo Switch two. GAAP net revenue increased 12% to $1,500,000,000 while cost of revenue declined 1% to $559,000,000 and operating expenses decreased 3% to $923,000,000 On a management basis, operating expenses rose 3% year over year, which was slightly above our forecast of 2% growth, primarily due to higher personnel costs.

Lainie Goldstein
Lainie Goldstein
Chief Financial Officer at Take-Two Interactive

While total marketing expenses were within our forecast range for the quarter, Zynga made incremental user acquisition investments to support its robust performance, which was offset by two ks shifting from marketing out of Q1 into later this fiscal year. Turning to our guidance, I'll begin with our full fiscal year expectations. We are raising our net bookings outlook range to $6,050,000,000 to $6,150,000,000 which represents 8% growth over fiscal twenty twenty five at midpoint. The increase predominantly reflects our strong first quarter performance and, to a lesser degree, updates to our forecast, including FX. The largest contributors to net bookings are expected to be NBA two ks, the Grand Theft Auto series, TuneBlast, Borderlands four, Mash Factory, the Red Dead Redemption series, Color Block Jam, Empires and Puzzles, and Words With Friends.

Lainie Goldstein
Lainie Goldstein
Chief Financial Officer at Take-Two Interactive

We now expect recurrent consumer spending to grow approximately 4%, which is revised upward from our prior forecast of flat, representing 76% of net bookings. We expect NBA two ks to grow mid teens, mobile to grow low single digits, and Grand Theft Auto Online to decline. We expect the net bookings breakdown from our labels to be roughly 45% Zynga, thirty nine percent two ks and 16% Rockstar Games. We continue to expect operating cash flow of approximately $130,000,000 and capital expenditures of approximately $140,000,000 We now expect GAAP net revenue to range from 6,100,000,000.0 to $6,200,000,000 and cost of revenue to range from 2,550,000,000.00 to $2,570,000,000 Our total operating expenses are now expected to range from 3,840,000,000.00 to $3,860,000,000 compared to $7,450,000,000 last year. On a management basis, we expect operating expense growth of approximately 5% year over year.

Lainie Goldstein
Lainie Goldstein
Chief Financial Officer at Take-Two Interactive

This is up slightly from our prior forecast due to higher personnel costs as well as increased marketing spend to support our mobile portfolio and netbacks. I'd like to point out that our earnings per share calculations reflect our higher share count following our recent equity issuance. Now moving on to our guidance for the fiscal second quarter. We project net bookings to range from $1,700,000,000 to $1,750,000,000 compared to $1,470,000,000 in the second quarter last year. Our release slate for the quarter includes The Old Country, NBA 2K26 and Borderlands four.

Lainie Goldstein
Lainie Goldstein
Chief Financial Officer at Take-Two Interactive

The largest contributors to net bookings are expected to be NBA two ks, Borderlands four, the Grand Theft Auto series, Steam Blast, Mask Factory, Empires and Puzzles, Color Block Jam, the Red Dead Redemption series, Words with Friends, and The Old Country. We project recurrent consumer spending to increase by approximately 1%, which assumes a low single digit increase for NBA two ks, slight growth for mobile, and a decline for Grand Theft Auto Online. We expect GAAP net revenue to range from 1,650,000,000.00 to $1,700,000,000 Operating expenses are planned to range from $1,020,000,000 to $1,030,000,000 On a management basis, operating expenses are expected to grow by approximately 7% year over year, which is primarily driven by marketing to support our strong release slate during the period. Looking ahead, our confidence in our outlook is exceptionally strong. Our company is set to deliver the most ambitious pipeline in our history, which we believe will unlock a new record level of scale as well as enhance profitability.

Lainie Goldstein
Lainie Goldstein
Chief Financial Officer at Take-Two Interactive

As we release exciting new hits and explore additional growth opportunities, both organic and inorganic, we expect to achieve meaningful returns for our shareholders. Thank you. I'll now turn the call back to Strauss.

Strauss Zelnick
Strauss Zelnick
Chairman & Chief Executive Officer at Take-Two Interactive

Thanks, Lainie and Carl. On behalf of our entire management team, I'd like to thank our colleagues for delivering a stellar start to what is poised to be an outstanding year for Take Two. To our shareholders, I want to express our appreciation for your continued support. We'll now take your questions. Operator?

Operator

Our first question comes from the line of Eric Handler with MKM Partners. Please go ahead.

Eric Handler
MD & Senior Research Analyst at Roth Capital Partners, LLC

Good afternoon. Thank you for the question. Strauss, wonder if you could talk a little bit about NBA two ks. Sold about 500,000 more units than last year overall. RCS in the quarter up 48%. That's you said an acceleration of growth from not just last quarter, but two quarters ago as well. Is there something within the RCS that's particularly resonating this year that you can point out to?

Karl Slatoff
Karl Slatoff
President at Take-Two Interactive

Hi, Eric, it's Carl. Look, I mean, we're obviously very thrilled with performance of NBA two ks. We've sold in over 11,500,000 units. And engagement is just across the board up significantly year over year. And it's really not necessarily any of our single modes.

Karl Slatoff
Karl Slatoff
President at Take-Two Interactive

It's really both of our primary RCS generating modes, which is MyCareer and also excuse me, my career and my team, sorry about that. So it's really over time we're getting much, much better about managing and reading our in game telemetry. Knowing what the consumers like to spend money on, what they like to engage with and two ks and the folks at VC have done an amazing job managing that process. So we continue to get better and better every year. And this is just a really great title.

Karl Slatoff
Karl Slatoff
President at Take-Two Interactive

So there's nothing really specific that one can point to other than the fact that folks have really reacted positively to the efforts that we've made on the development process. And we still think there's a lot of greenfield in front of us. Great, thanks a lot.

Operator

Our next question comes from the line of Doug Creutz with TD Cowen. Please go ahead.

Doug Creutz
Managing Director at TD Cowen

Hey, thanks. I couldn't help noticing that your advertising revenue was flat year over year and up sequentially, which I think is the first time we've seen that in a long time. Can you talk about whether we're seeing finally a bottoming in that market? Or is this maybe due to some game specific things that impacted the quarter? Thank you.

Strauss Zelnick
Strauss Zelnick
Chairman & Chief Executive Officer at Take-Two Interactive

Yeah, I think for us it's really that we adjusted our approach to advertising by moving from hyper casual to hybrid casual and that hybrid casual too. And at this point, I think we feel very good about sort of where we're at and we would certainly hope to grow from here. Great, thank you.

Operator

Your next question comes from the line of Chris Schul with UBS Financial. Please go ahead.

Christopher Schoell
Christopher Schoell
Equity Research Analyst - Communications & Media at UBS Group

Great.

Christopher Schoell
Christopher Schoell
Equity Research Analyst - Communications & Media at UBS Group

Thank you. So mobile did come in much stronger than we expected for fiscal 1Q with the low teens growth, but your guide does imply deceleration from here. Can you just kind of walk us through the drivers there and why you anticipate that the momentum you saw in fiscal 1Q might not repeat?

Lainie Goldstein
Lainie Goldstein
Chief Financial Officer at Take-Two Interactive

Yes. Q1 was fantastic. We've seen so much momentum in a lot of our big titles and some of our titles that have really started to take off since the Q4 of last year and into this first quarter. But we do see some mature titles that have achieved outstanding results on a multiyear basis. And given the age of these titles, we really still expect moderation even though we haven't really seen it over the course of the fiscal year.

Lainie Goldstein
Lainie Goldstein
Chief Financial Officer at Take-Two Interactive

And we also have some hyper and hybrid casual titles that have performed really well. And when we forecast for those titles, we're looking at the life cycle and the sales curve of prior hyper and hybrid casual titles. So we have to build that into our forecast. So that's what we're seeing right now, but hopefully it will continue to go in the same momentum and we'll see some great surprises towards the end of the year.

Christopher Schoell
Christopher Schoell
Equity Research Analyst - Communications & Media at UBS Group

Great. Thank you. And if I can just fit in one more, just as the free cash flow generation of the business scales here in the coming years and leverage is now coming down following the equity raise, can you just remind us how you're thinking about capital allocation going forward and where potential shareholder returns might fall into your list of priorities?

Strauss Zelnick
Strauss Zelnick
Chairman & Chief Executive Officer at Take-Two Interactive

Yeah, great question. And just to put it in context right now, we've had $2,000,000,000 in cash and our net leverage is about 1.2 turns. So we feel like we're pretty conservatively geared, which is our goal. You're right that our expectations obviously would be over the next few years that we'll build up our cash balance and strengthen our balance sheet further, which is a position we'd like to be in. And our approach to capital allocation is unchanged.

Strauss Zelnick
Strauss Zelnick
Chairman & Chief Executive Officer at Take-Two Interactive

There are really three uses of our capital. First is support organic growth, that's been our story around here, we are largely an organic growth story. Secondly, selectively and on an accretive basis only to support inorganic opportunities that are strategically sound and we're really proud of the fact that pretty much everything we've done in that area has worked out. You see in this quarter that we're now reporting just how well our mobile approach is working out, just how wonderful in addition it is to this enterprise. And it's always our goal to make sure that inorganic growth is sound, it's atypical for industry, but typical for us.

Strauss Zelnick
Strauss Zelnick
Chairman & Chief Executive Officer at Take-Two Interactive

And our most recent deal, the acquisition of Gearbox has also been stellar for the company. And third is returning capital to shareholders, which we've done regularly over the years, typically in the form of buybacks, which are opportunistic. We do aim to purchase shares at deep value. So far we've found that right 100% of the time, which is kind of amazing. So that remains unchanged and we feel good about being able to actually execute against all three approaches in the coming years.

Christopher Schoell
Christopher Schoell
Equity Research Analyst - Communications & Media at UBS Group

Great, thank you.

Operator

Our next question comes from the line of Andrew Maroc with Raymond James. Please go ahead.

Andrew Marok
Andrew Marok
Director at Raymond James Financial

Thanks for taking my question. I guess thinking about what went into decision to price Borderlands four at $70 I guess more broadly, when a peer came out with full games at $80 it seemed like a foregone conclusion that the rest of the industry would follow. But now we've seen that not necessarily be the case. So I guess from your seat, what is the pricing environment? How do you feel about the ability to take price?

Andrew Marok
Andrew Marok
Director at Raymond James Financial

And when do you think the player is ready for that to be born? Thank you.

Strauss Zelnick
Strauss Zelnick
Chairman & Chief Executive Officer at Take-Two Interactive

Well, I think our approach may be a little bit different. We believe that any consumer experience is the intersection of the thing itself and what you paid for the thing. So our goal is to vastly exceed expectations. We wanna put out the best entertainment on earth and we want to deliver more value than what we charge for. And we think we've generally speaking gotten that right.

Strauss Zelnick
Strauss Zelnick
Chairman & Chief Executive Officer at Take-Two Interactive

Variable pricing has been the nature of this industry forever. Most frontline releases will go out at a higher price or sometimes with special editions and then over time, usually the price is discounted to optimize for the largest possible market. And I don't think that's going to change anytime soon. But the rubric that informs us is really that of delivering more value than what we charge.

Operator

Your next question comes from the line of Mike Hickey with The Benchmark Company. Please go ahead.

Mike Hickey
Equity Research Analyst at The Benchmark Company LLC

Yes. Thanks Charles, Lainey, Karl, Nicole, great quarter guys and nice to see the raise in your twenty five fiscal twenty six numbers. Just in that sort of area, the raising your guidance here, just given the macro backdrop Strauss, just through the July jobs report, which is obviously weak and then we saw the revision down pretty meaningfully obviously in May and June job numbers. Are you concerned that this at all signals a broader economic slowdown And how you think that could impact your business? Obviously, entertainment has been somewhat defensive historically, but also vulnerable. Thank you, guys.

Strauss Zelnick
Strauss Zelnick
Chairman & Chief Executive Officer at Take-Two Interactive

Thanks, Mike. I'm not sure anyone really wants to listen to my macroeconomic guidance, but I'll share it anyhow. After negative GDP growth at the end of last year, we've seen a return to positive GDP growth in the first quarter of 1% to 2%. And I think we're going to see positive GDP growth. There's headwinds in tariffs, there are tailwinds in stimulus.

Strauss Zelnick
Strauss Zelnick
Chairman & Chief Executive Officer at Take-Two Interactive

And I think they're probably going to balance out in favor of modest growth. I think you're probably going to see a 3% increase in consumer spending, which is about what we've been accustomed to. I agree with you that unemployment probably goes up a bit. It's 4.2 and probably goes up to 4.5. That's my own view and I think you'll see 50 more bps of that rate cuts between now and year end.

Strauss Zelnick
Strauss Zelnick
Chairman & Chief Executive Officer at Take-Two Interactive

You can ignore all of that or do with it as you please. What that implies is much more soft landing than anything else. It's on balance acceptable. It's not booming. It's certainly not busting.

Strauss Zelnick
Strauss Zelnick
Chairman & Chief Executive Officer at Take-Two Interactive

And I do think that there's some risk, which you I think alluded to in your question, that consumers are going be a little more careful with their spending. And what happens when they're more careful? Well, it's not true that entertainment is counter cyclical. It's not even true that entertainment is recession resistant. It is true that people still consume entertainment even in tough times.

Strauss Zelnick
Strauss Zelnick
Chairman & Chief Executive Officer at Take-Two Interactive

They're just gonna be much more selective. So where are they gonna go? They're gonna go to quality. And that's a trend that's already been occurring in our business because our business is maturing and as entertainment businesses mature, there's a flight to quality. Thankfully, we think ahead around here and eighteen years ago when we came here, we made sure the strategy of the company was not to put out the biggest number of releases, but rather to put out the best releases and only to put out the best releases.

Strauss Zelnick
Strauss Zelnick
Chairman & Chief Executive Officer at Take-Two Interactive

And then of course over time, when we established an ability to come out with the highest quality titles reflected in our leading Metacritic scores and in our revenues, we were able to build up our pipeline further and to diversify it further. And now we actually have an incredibly robust pipeline going forward and one that we believe is identified by the hallmark of great quality. If we're right about that, then even in more challenging macro times, our micro behavior should be industry leading.

Mike Hickey
Equity Research Analyst at The Benchmark Company LLC

Nice. Thank you, guys. Good luck.

Operator

Your next question comes from the line of Martin Yang with Oppenheimer. Please go ahead.

Martin Yang
Senior Analyst at Oppenheimer & Co. Inc.

Thanks for taking my question. I want to ask about your view on the size of your addressable players versus the absolute quality you can deliver. So when it comes to new game releases, would you, at most times, sacrifice potential addressable player base to prioritize on the quality of the game in the sense that sometimes you will want to maybe sacrifice your target narrower console or PC player base in order to deliver the quality. So that's yes, so just general sense on how do you think about new games and the player base they will support.

Strauss Zelnick
Strauss Zelnick
Chairman & Chief Executive Officer at Take-Two Interactive

Look, in general, we aim to be wherever the consumer is. And most of our releases end up on all platforms that have any kind of consumer attention. And we've announced, for example, four titles for Switch two and have supported Nintendo with new platform releases. We've supported Sony and Microsoft who are on Steam and numerous other digital platforms within the PC format. So I don't really think there's a trade off between our focus on quality and how ubiquitous we are in terms of release platforms.

Strauss Zelnick
Strauss Zelnick
Chairman & Chief Executive Officer at Take-Two Interactive

And I don't see it that way. It is possible that our labels might stage a release so that they can focus on, for example, core console platforms. But generally speaking in the fullness of time, our titles find their way to all the viable platforms.

Martin Yang
Senior Analyst at Oppenheimer & Co. Inc.

Got it. A quick follow-up. So you talked about meeting players where they are. I think in the past you have expressed or you view platforms like Roblox as a very low priority platform where you would put your content on. Is there any change to that view?

Martin Yang
Senior Analyst at Oppenheimer & Co. Inc.

Do you feel that there are players that you're currently not accessing by not putting content on Roblox? Or do you think that you're pretty well covered in terms of all the players and where they are?

Strauss Zelnick
Strauss Zelnick
Chairman & Chief Executive Officer at Take-Two Interactive

Well, didn't realize you were referring to Roblox as a platform, but for the sake of argument, let me accept it as one for the purpose of your question. Roblox is aimed at kids largely, and not all of our games are rated E, so we're a highly compliant company. We market to appropriate audiences. We work with the ESRB here and with IRC outside of The US and other local ratings agencies to make sure that our titles are properly labeled and properly marketed. So even if a platform like Roblox, as you put it, were viable

Strauss Zelnick
Strauss Zelnick
Chairman & Chief Executive Officer at Take-Two Interactive

Not all of them would be appropriate for Roblox, but Roblox is not a platform in the way you say Steam is a platform. Roblox is a certain type of environment and not all of our games would work on Roblox whether that's work technically, work artistically or work commercially. But in terms of platforms that don't have their own creative offering, so for example, Steam. Steam doesn't apply as to who it serves, it has all different kinds of releases. So we're gonna be on Steam or other similar digital platforms most of the time, just as an example.

Martin Yang
Senior Analyst at Oppenheimer & Co. Inc.

Thank you.

Operator

Our next question comes from the line of Clay Griffith with MoffettNathanson. Please go ahead.

Clay Griffin
Research Analyst at Moffettnathanson LLC

Yes, thanks. Good afternoon. Strauss, you mentioned it in the open, but just maybe if we could get your thoughts on the court rulings specifically related to alternative app stores on Android. How do you see that progressing from here? Does it make sense to build your own app store within that environment?

Clay Griffin
Research Analyst at Moffettnathanson LLC

And then as a follow on, what do you think it will do to sort of the user acquisition channels that have existed prior to this development?

Strauss Zelnick
Strauss Zelnick
Chairman & Chief Executive Officer at Take-Two Interactive

It's less about user acquisition and more about user monetization, just to be clear. I think that we're going to continue to cooperate with all of the app stores. They're really important partners. And at the same time, sort of the momentum of court rulings is in service of making sure the market is open and fair to all as it ought to be. I've been saying for years that I believe that systems, distribution systems in our business would move from closed to open and the cost of distribution would decline.

Strauss Zelnick
Strauss Zelnick
Chairman & Chief Executive Officer at Take-Two Interactive

And we are seeing those two things happen, whether that's driven by financial necessity, whether that's driven by opportunity, whether that's driven by regulation or whether that's driven by litigation, it's kind of unimportant to us that the movement is all in the same direction and that direction is what's good for the consumer. What's good for the consumer is open distribution.

Clay Griffin
Research Analyst at Moffettnathanson LLC

And is that something that you see an opportunity to do yourselves or does it make sense to partner with others?

Strauss Zelnick
Strauss Zelnick
Chairman & Chief Executive Officer at Take-Two Interactive

So all of the above. For example, you can buy currency on our own web stores now for most of, not all of them, most of our mobile games. I see that continuing. We have a launcher inside the Rockstar Social Club, for example. So we don't intend to integrate forward into retail distribution and we certainly don't intend to eat retail lunch because they're valued distribution partners for us.

Strauss Zelnick
Strauss Zelnick
Chairman & Chief Executive Officer at Take-Two Interactive

We want to be wherever the consumer is. Whether they want to go to the Best Buy, they want to go to Steam, they want to go to Microsoft or Amazon, we want to be there as long as we're treated fairly. But the emphasis is on being treated fairly and there's a distribution cost that's fair and there's a distribution cost that is less fair And the world seems to be moving in the direction of more fair and the courts are helping.

Clay Griffin
Research Analyst at Moffettnathanson LLC

Sure. And then I've got a quick follow-up on NDA two ks if I can. Just exceptional growth there. I'm curious, I know that you had 2K24 in PlayStation Plus last year around this time. I don't know if there's any special differentiation in terms of the tiers that were available in June.

Clay Griffin
Research Analyst at Moffettnathanson LLC

I mean, but Carl maybe if you could speak to just if there was any impact from PlayStation Plus year over year that would have contributed to growth numbers like this.

Karl Slatoff
Karl Slatoff
President at Take-Two Interactive

So we do put our titles occasionally into some of the subscription services. They're great partners for us. In many cases, they're great. Well, we wouldn't do it unless it was a good economic deal and the platforms wouldn't do it either. So we do take advantage of that and it's been compelling from us from an economic standpoint.

Karl Slatoff
Karl Slatoff
President at Take-Two Interactive

As it relates to MBA, we have done it in the past and we don't really talk about whether we're going to do anything in the future. But when you do put something into a channel like that, it generates obviously engagement, it generates income for us. And it's something that we consider and we do if the time is right, if the math makes sense.

Clay Griffin
Research Analyst at Moffettnathanson LLC

And just to be clear, year over year was there a meaningful delta in the way that it came to that service?

Karl Slatoff
Karl Slatoff
President at Take-Two Interactive

A meaningful delta over what?

Clay Griffin
Research Analyst at Moffettnathanson LLC

Just how it was presented last year.

Karl Slatoff
Karl Slatoff
President at Take-Two Interactive

Yes, I'm not sure I'm understanding the question. I apologize. Could you restate it one more time?

Clay Griffin
Research Analyst at Moffettnathanson LLC

Yes, just trying to understand if there was any change in the economics, the contribution from that relationship with Sony year over year that would have contributed to the exceptional growth that

Karl Slatoff
Karl Slatoff
President at Take-Two Interactive

I understand. Okay, I'm sorry. You were asking a very straightforward question and I thought it was more complicated. The answer is no.

Clay Griffin
Research Analyst at Moffettnathanson LLC

Got it. Thanks. Great.

Operator

And with no further questions in queue, I will now turn the call back over to Strauss Zelnick for closing remarks.

Strauss Zelnick
Strauss Zelnick
Chairman & Chief Executive Officer at Take-Two Interactive

Thank you so much everyone for joining us today. Obviously, we're thrilled with our first quarter results and we have great confidence for the outlook for the rest of the year. All of this is tribute to the superb work that is done by our teams all over the world. Our development teams who are the most creative and talented in business, our marketing and distribution teams who are innovative in the extreme. Don't take no for answer. And of course, our business teams who work hard every day to make sure that we're highly compliant, highly organized, and highly effective. Thanks to everyone, and we wish you all a great summer.

Operator

This concludes today's conference call. You may now disconnect.

Executives
Analysts
    • Nicole Shevins
      SVP of IR & Corporate Communications at Take-Two Interactive
    • Eric Handler
      MD & Senior Research Analyst at Roth Capital Partners, LLC
    • Doug Creutz
      Managing Director at TD Cowen
    • Christopher Schoell
      Equity Research Analyst - Communications & Media at UBS Group
    • Andrew Marok
      Director at Raymond James Financial
    • Mike Hickey
      Equity Research Analyst at The Benchmark Company LLC
    • Martin Yang
      Senior Analyst at Oppenheimer & Co. Inc.
    • Clay Griffin
      Research Analyst at Moffettnathanson LLC
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