Take Two Looks to Premium Segment for the Future

Take Two surprised some videogame analysts by saying that it will lose more money than expected during the current fiscal year. The company is stating that it will be getting less revenue, down to about 950 million dollars, with losses of 1.10 to 1.15 for each share. The outlook for 2010 is also a bit gloomy, as the recession continues to impede sales and as development costs creep higher.

Still, Strauss Zelnick, the chairman of Take Two, is convinced that the only way to return to profitability and sell a lot of games is to concentrate on the AAA segment of videogaming, which means those high profile titles that cost a lot to make and market but can also sell million of copies in just their first month of sale. Zelnick said in a conference call that “The demand for top-tier products is okay. The demand for lower-tier products is not so clear,” adding that “The safest place to be is in triple-A.”

Ben Feder, who is the Chief Executive Officer of Take Two, has stated that the promotional offers, which appear after Thanksgiving and before Christmas tend to drive up unit sales but the price cut makes them less than profitable for the publisher. He has revealed that “This is a high-value product; consumers see it this way... particularly at the triple-A level. So I think pricing will be preserved.”

In 2010, Take Two is set to release important titles like BioShock 2, Mafia 2, Red Dead Redemption and Max Payne 3. Interestingly, most of them were initially said to arrive in late 2009 and the third coming of Max Payne has been pushed back for a second time. The company is also estimating that its MLB baseball franchise will not perform as well as in 2009 in the coming year. There is also apparently one unannounced title that has been delayed into 2011.