It's been a tricky quarter for Grand Theft Auto publisher Take-Two Interactive – its earnings today fell short of its guidance, the company's planning for cost reductions that may include "modest" layoffs in the workforce, and its biggest potential blockbuster on deck, Grand Theft Auto 6, suffered a massive leak late last year.
On the final point, at least, CEO Strauss Zelnick isn't concerned that the leaks might impact the business. But speaking to IGN ahead of Take-Two's earnings release today, he called them an "emotional matter" and focused on the impact to developers working on the game.
"We take leaks very seriously indeed and they disappoint all of us, it's really frustrating and upsetting to the team," he said. "However as a business matter we're not affected. But as a personal matter and an emotional matter, our teams are affected."
That said, the earnings suggest that Take-Two employees may be about to feel a more tangible kind of business impact soon, in the form of layoffs. Following a report of $1.38 billion in net bookings for the quarter, falling short of its $1.41 billion guidance, Take-Two is preparing to undergo cost cutting measures that it projects will save it roughly $50 million per year. One of the areas Take-Two suggests this will impact is personnel.
When I asked Zelnick if this meant layoffs, he replied that "that's not the plan," but caveated that while he doesn't expect large-scale layoffs, some jobs may be lost.
"We don't expect some kind of broad-based RIF [reduction in force] or anything of the sort, but that said it's not as though we guarantee lifetime employment sadly," he said. "So there will be certain instances where jobs will be lost, but I think that will be pretty modest."
The company notes that the guidance miss and subsequent cost reductions are the result of "macroeconomic conditions" that drove consumer spending toward more established blockbuster franchises and games that were on sale. While Take-Two admits it did benefit from this, it did hurt spending on both new releases (possibly referring to Marvel's Midnight Suns, which released in December) and recurrent consumer spending on some of its console and PC games. Notably, multiple tech and gaming companies have reported similar
Elsewhere in its earnings report, Take-Two offered updates on unit sales for two of its biggest games: Grand Theft Auto 5, and Red Dead Redemption 2. GTA5 has surpassed 175 million copies by selling roughly another 5 million in the last quarter – a feat it's achieved quarter after quarter for years now. It was also the third best-selling game in the U.S. in 2022 by unit sales, and the second best-selling game on Steam last year.
Rebekah Valentine is a news reporter for IGN. You can find her on Twitter @duckvalentine.