Take-Two growth slows with anniversary of Zynga acquisition
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Take-Two Interactive today reported its financial results for the quarter ended June 30. The company continued to post significant losses, but the top-line growth of recent quarters has slowed down due to the acquisition of Zynga closing partway through the year-ago quarter, making for more difficult comparisons going forward.
Take-Two's earnings report this quarter looks a lot like the last few, with significant gains in revenue and bookings paired with significant losses.
That's been the pattern ever since Take-Two's acquisition of Zynga closed during the first quarter of its previous fiscal year, but now that the combined Take-Two/Zynga is no longer being compared against the performance of Take-Two on its own, that top-line growth has started to slow.
One part of the business that still posted eye-catching growth was recurrent consumer spending, with net bookings in the virtual currency/DLC/in-game ads catch-all category growing 38% year-over-year.
Take-Two has put a lot of emphasis on growing its recurrent consumer spending over the years, so we ask Take-Two CEO Strauss Zelnick in an earnings briefing whether that was due more to increasing the number of players paying for add-ons, or if that was due to a similar cohort of paying players significantly increasing how much they spend on add-ons.
"It could be either mathematically, but our goal is to reach the broadest audience we can and serve them as effectively as we can," Zelnick says.
But if recurrent consumer spending increases because people are paying more on average instead of reaching a broader audience, would there be a ceiling on how much Take-Two could expect that figure to
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