TAKE-TWO INTERACTIVE SOFTWAR earnings calls

Mobile market trend

Q (Douglas Creutz · TD Cowen): Did Take-Two see a Q2 slowdown in mobile like a peer said, and why?

A: Management said they are not seeing a consumer pullback. They noted results were affected by year-over-year comparison with Color Block Jam. They also said there is some pressure on user acquisition but it comes and goes.

"Our results have been affected by how Color Block Jam is doing versus last year in terms of comping because it was a new title last year." — Strauss Zelnick (CEO·CHAIR)

GTA VI trailer release and GTA Online update

Q (Andrew Marok · Raymond James): Why give Netflix time exclusivity for the extended GTA VI look instead of YouTube, and how is the Kortz Center update affecting player reactivation?

A: They said the Netflix arrangement is a first-of-its-kind marketing and distribution partnership and they work with many social outlets. Management added the extended look will appear on Rockstar's channel and other outlets after a short period. They said they're pleased with how the Kortz Center update is performing and that Rockstar releases typically reactivate players, but gave no specific metrics.

"They're a great marketing partner for us and distribution partner, as you know." — Strauss Zelnick (CEO·CHAIR)

Game base pricing strategy

Q (Brian Pitz · BMO): How are you thinking about charging $80 for GTA VI versus $70 for NBA 2K27 and future base pricing?

A: They said their goal is to deliver far more value than the price charged. Pricing is set in the context of value, not to maximize price. They described GTA VI as an incredible bargain given Rockstar's track record.

"Our goal is to deliver way more value to consumers than what we charge them." — Strauss Zelnick (CEO·CHAIR)

Netflix deal and hardware/streaming outlook

Q (Eric Handler · ROTH Capital): Did Netflix or Take-Two initiate the exclusive trailer deal and will hardware cost increases or console delays hurt the company?

A: They said Netflix is a close partner and the partnership was arranged with Rockstar, but they would not disclose deal terms. On hardware costs, they said rising costs are not positive but not a headwind for them; they expect open systems and streaming to grow the effective installed base and think commercial low-latency streaming could arrive within 3 years.

"And I'm happy to put a time line on it, I think we'll be in commercial streaming mode within 3 years." — Strauss Zelnick (CEO·CHAIR)

NBA 2K growth and AI use

Q (Colin Sebastian · Baird): What will differentiate NBA 2K27 to keep growing the franchise, and how are studios using AI tools internally?

A: They said NBA 2K still has large growth potential through more units, geographic expansion, and increased engagement driven by the teams' innovation. On AI, they said the company has long used AI and machine learning, has a three-part strategy including innovation and efficiency, and uses technology to enhance creativity rather than replace people.

"We have a 3-part strategy, 2 parts of which are innovation and efficiency." — Strauss Zelnick (CEO·CHAIR)

International expansion and M&A criteria

Q (Christopher Schoell · UBS): What international markets are underexploited and what criteria do you use for acquisitions and regions to scale?

A: They said many regions like India, Africa, Latin America and parts of Asia are underrepresented and they are prioritizing growth there using tools like geo pricing. For M&A they look for owned IP, valuable tools and teams, immediate accretion to EBITDA and GAAP earnings, cultural fit, and avoid overleveraging until they're net cash.

"So my goal is that in the next 10 years, we flip the percentage of our revenue that comes from the U.S. and international markets in the other direction because we've grown the overall business." — Strauss Zelnick (CEO·CHAIR)

'27 inflection and streaming timing

Q (Michael Hickey · StoneX): Why do you call 2027 an inflection point and why are you confident streaming will be commercial in 3 years?

A: They said big releases like GTA and Red Dead have long-term positive effects and that their pipeline, live services, and catalog provide fuel for growth. On streaming, they cited advances in hyperscaler and edge networks as reasons to expect low-latency commercial streaming within about 3 years, while admitting uncertainty and not betting the company on it.

GTA VI premium SKUs and preorder impact

Q (Alec Brondolo · Wells Fargo): Why did Rockstar choose the GTA VI SKU mix without early access, and could strong preorders just pull forward sales instead of adding demand?

A: They said Rockstar chose pricing to offer strong value at $80 and incremental value at a modestly higher price. They said preorders are unprecedented and exceptional, but acknowledged preorders could pull demand forward and emphasized caution because no units have been sold yet and preorders can be canceled.

"One of the reasons that we're not changing our guidance is, to be clear, we haven't sold one unit yet." — Strauss Zelnick (CEO·CHAIR)

Physical discs and Zynga direct payments

Q (Matthew Cost · Morgan Stanley): Will Sony dropping discs in 2028 affect gross margins, and how is Zynga moving toward direct payments?

A: They declined to comment on Sony's decision but said Take-Two is already over 90% digital and disks often don't make sense for consumers who must register online anyway. On direct-to-consumer, they said it remains a growth area in mobile, is not universal yet, and has had a material positive effect on mobile margins.

"In certain instances, especially if it's a big game, disks just -- and note I said disks don't really make sense for the consumer." — Strauss Zelnick (CEO·CHAIR)

Preorders as a signal for sales

Q (Jason Bazinet · Citi): Can you give historical context to help translate preorder levels into eventual bookings for GTA VI?

A: They said they do not know how preorders will translate into final sales and will not predict unit outcomes. They called preorders unprecedented and said they avoid claiming victory before the event occurs.

"The answer is I don't know, and I'm not going to tell you." — Strauss Zelnick (CEO·CHAIR)

Mobile vs console experience and GTA future

Q (Eric Sheridan · Goldman Sachs): Will mobile hardware advances make mobile games AAA-quality and what GTA extensions might follow the launch?

A: They said technology will allow more console-like experiences on mobile, but the consumption patterns differ: console/PC titles are long sessions while mobile is short, frequent sessions. They said new formats will emerge, they think about unknown future opportunities, and they are not discussing GTA's future plans now.

"A mobile experience is something you do when you have a few moments free and you want to relax and enjoy and be entertained." — Strauss Zelnick (CEO·CHAIR)

Advertising in games

Q (Taebin Song · Wolfe): How do you see advertising fitting into Take-Two beyond mobile, especially without intruding on paid AAA games?

A: They said advertising is a growing part of mobile and they are rolling out ad units so they can monetize more of the audience beyond the small percent who make in-app purchases. On console, they said advertising only makes sense when endemic to the title and will remain a relatively small part of that business.

"So if you only engage with in-app payments, you're monetized -- pardon me, less than 20% of the audience typically, often quite a bit less than 20%." — Strauss Zelnick (CEO·CHAIR)

Netflix deal scope and GTA Online cadence

Q (Martin Yang · Oppenheimer): Is the Netflix partnership a one-off or a broader licensing approach, and has GTA Online update cadence required more resources?

A: They said the partnership is groundbreaking but Rockstar and Take-Two have licensed content to Netflix before and they expect many future opportunities across outlets to be ubiquitous. On GTA Online, they said the update cadence has been stable, they apply significant resources, and they plan to continue support going forward.

"Rockstar has licensed content to Netflix before as has the rest of Take-Two." — Strauss Zelnick (CEO·CHAIR)

Deluxe edition mix and mobile UA costs

Q (Piper Sandler): How is the Deluxe Edition mix shaping up, and how should we interpret user acquisition cost versus mobile engagement?

A: They said Rockstar got the Standard and Deluxe pricing right and consumers are excited about both editions and the preorder mix. On mobile, they said engagement is fine and many titles are doing well, Color Block Jam is a tough comp, UA costs vary with market conditions and competitors' overspending can make UA less economic, so they focus on ROI for marketing spend.

"And I think there's no doubt that consumers are really excited about both." — Strauss Zelnick (CEO·CHAIR)