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Company Profile of Take-Two Interactive -
May 13th, 2011
Take-Two Interactive Software, Inc. (NASDAQ: TTWO) (or Take-Two, also known as Take2) is an American publisher, developer, and distributor of video games and video game peripherals. Take-Two wholly owns 2K Games and Rockstar Games. The company's headquarters are in New York City, with international headquarters in Windsor, United Kingdom. Development studio locations include San Diego, Vancouver, Toronto and Novato, California. Take-Two has developed and published many notable games, including its most famous Grand Theft Auto series, the Midnight Club racing series, controversial games Manhunt and Manhunt 2 and most recently BioShock. As owner of 2K Games, Take-Two publishes its popular 2K Sports titles. It also acted as the publisher of Bethesda Softworks's 2006 game, The Elder Scrolls IV: Oblivion. Take-Two was the target of a hostile takeover US$2 billion bid from rival Electronic Arts issued in February 2008. EA let the offer expire in August 2008.
Take-Two Interactive Software, Inc. is a New York-based developer, publisher, and distributor of interactive software games. A leader in its field, Take-Two has global reach, with publishing and distribution operations located in Canada, the United Kingdom, France, Germany, Denmark, Italy, Australia, and Japan. The company offers products, either created internally or acquired through third party developers, for all major game consoles (including Sony's PlayStation2, Nintendo's GameCube, and Microsoft's Xbox), as well as for personal computers and handheld computing devices. Take-Two's distribution subsidiary, Jack of All Games, is America's top console game distributor, selling to such major customers as Wal-Mart, Toys 'R' Us, Target, Kmart, Blockbuster, and Amazon. In recent years Take-Two has established a presence in online multi-player gaming, which promises to be a future growth area in the highly competitive gaming industry.
Take-Two Interactive Software, Inc., incorporated in 1993, is a global publisher, developer and distributor of interactive entertainment software, hardware and accessories. The Company’s publishing business consists of Rockstar Games, 2K Games, 2K Sports and 2K Play publishing labels. The Company develops, markets and publishes software titles for gaming and entertainment hardware platforms, including Sony’s PLAYSTATION3 (PS3) and PlayStation2 (PS2) computer entertainment systems; Sony’s PSP (PlayStationPortable) (PSP) system; Microsoft’s Xbox 360 (Xbox 360) video game and entertainment system; Nintendo’s Wii (Wii) and DS (DS) systems, and for the personal computers (PC) and Games for Windows. The Company also develops and publishes titles for digital distribution via Sony's PlayStationNetwork (PSN) and Microsoft's Xbox LIVE Marketplace (Xbox LIVE) and Xbox LIVE Arcade (XBLA), as well as digitally offers its PC titles through online download stores and services, such as Steam. The Company has also begun to develop and publish titles for the iPhone and iPod touch. In March 2010, SYNNEX Corporation acquired substantially all of the North American assets of Jack of All Games, Inc., a distributor of video game hardware and software in North America, and a wholly owned subsidiary of Take-Two Interactive Software, Inc.
Publishing and Software Development Business
During the fiscal year ended October 31, 2009 (fiscal 2009), the Company released a range of downloadable content, including Grand Theft Auto IV: The Lost and Damned, Midnight Club: Los Angeles South Central Map Expansion and South Central Premium Upgrade, Grand Theft Auto: The Ballad of Gay Tony and NBA2K10: Draft Combine. Software titles published by the Company’s Rockstar Games label are primarily internally developed. During fiscal 2009, Rockstar released the Grand Theft Auto: Chinatown Wars on the Nintendo DS and Sony PSP. Rockstar also develops brands in other genres, including the Bully, Manhunt, Max Payne and Red Dead franchises, and introduced a new brand in the music genre during fiscal 2009, with Rockstar Games and Timbaland present Beaterator.
The Company’s 2K label publishes its titles under 2K Games, 2K Sports and 2K Play. 2K Games has published a range of entertainment properties across multiple genres and platforms. 2K Games' internally owned and developed franchises include BioShock, Mafia and Sid Meier's Civilization series. 2K Games also expanded the Sid Meier's Civilization series by releasing Sid Meier's Civilization Revolution onto mobile platforms for the iPhone and iPod touch. 2K Games has externally developed titles that have included The Darkness and The Elder Scrolls IV: Oblivion, and released the externally developed title Borderlands in October 2009.
The Company develops most of its 2K Sports software titles through its internal development studios, including the Major League Baseball 2K series, NBA 2K series, NHL 2K series, College Hoops 2K series and Top Spin tennis series. 2K Sports label has sports league licenses, including long-term, third-party exclusive licensing relationships with Major League Baseball Properties, the Major League Baseball Players Association and Major League Baseball Advanced Media. During fiscal 2009, 2K Sports secured a multi-year license from the Nationl Basketball Association (NBA) to develop an online version of the NBA simulation game in China, Taiwan, South Korea and Southeast Asia.
2K Play titles are developed by both internal development studios and third party developers. Internally developed titles include Carnival Games and Birthday Party Bash. During fiscal 2009, 2K Play announced a new licensed casual and family-friendly, internally developed game, Ringling Bros., and Barnum and Bailey Circus, which was released in November 2009. 2K Play also has a partnership with Nickelodeon to publish video games based on its top rated Nick Jr. titles, such as Dora the Explorer; Go, Diego, Go!; Ni Hao, Kai-lan, and The Backyardigans. During fiscal 2009, 2K Play began to work with several small independent developers to publish casual gaming titles exclusively for XBLA, including Axel and Pixel, and The Misadventures of P.B. Winterbottom.
The Company’s distribution business, which includes its Jack of All Games subsidiary, distributes its products, as well as software, hardware and accessories produced by others to retail outlets in North America. In September 2008, the Company agreed to outsource the pick, pack, ship and warehousing functions for its publishing and distribution businesses to a third party logistics management solutions provider. The Company also sold certain assets of its United States based distribution business to the third party logistics management solutions provider.
The Company competes with Activision Blizzard, Electronic Arts, Midway Games, THQ, Capcom, Square Enix, Eidos, Konami, Namco-Bandai, SEGA, Ubisoft, Sony, Microsoft and Nintendo.
Take-Two made a number of purchases in 1999 to build up its distribution business. In February, it acquired L.D.A. Distribution, which distributed interactive games in both the United Kingdom and France. In addition, Take-Two picked up a video game accessories manufacturing subsidiary, Joytech Europe Ltd. In March 1999, Take-Two added the budget software publishing and distribution operations in Norway, Sweden, and Denmark of FunSoft Nordic A.S., which was renamed of All Games Scandinavia. Later in the year, Take-Two paid $2.2 million to acquire Verte Italia Spa, a publisher of software and video games with a major distribution operation in Italy. Take-Two also began to look to the Internet in 1999, an area that held great promise for the future of interactive gaming. The company began development of an multiplayer online version of Grand Theft Auto, which the company anticipated would become the first in a number of its titles to be converted. Take-Two also gained a toehold in online commerce with the acquisition of DVDWave.com, retailer of DVD movies, a site on which the company hoped to soon start selling games. Investors took some notice of Take-Two activities in 1999, bidding up its stock above $13, although the price would again sink to the $7 level before finding a middle ground. Nevertheless, Take-Two continued to grow its balance sheet at a furious pace. Revenues in 1999 increased by more than 57 percent over the previous year, topping $300 million, while net income more than doubled to $16.3 million.
In 2000, Take-Two acquired the outstanding shares of GoD, making the game developer into a wholly-owned subsidiary, and also purchased PopTop Software. Aside from these investments, Take-Two devoted much of its cash to growing its online endeavors. In February, it acquired a stake in eUniverse, a major online gaming and entertainment network that boasted more than 6 million unique visitors each month. The investment paved the way for Take-Two to promote its games on the site, including the creation of online communities created around the company's titles. In March 2000, Take-Two purchased the Israeli video technology company, Pixel Broadband Studios, developers of software that transmitted video games across high-speed Internet access networks. Also in 2000, Take-Two bolstered its online presence by signing a deal with Freeloader, a free downloadable games portal. Furthermore, the company established a London-based subsidiary, Broadband Studios, to focus on the development of online games.
After acquiring more than two dozen companies in the past four years, not all of which lived up to expectations, Take-Two had taken on considerable debt, a situation that troubled investors. Take-Two, however, continued to increase sales at a steady rate despite a general downturn in the tech sector, posting revenues of $387 million in 2000 and income of almost $25 million. For Take-Two, 2001 was a transitional year. Kelly Sumner took over as chief executive, while Brant remained as chairman of the board. Sumner announced that his focus would be on further international expansion. The company enjoyed a run-up of its stock, topping out at $24.50 in June. It fell to the $13 range by early September when the terrorist attacks on the World Trade Center temporarily shut down the business and caused a precipitous decline in Take-Two stock. The company soon regained its balance, and actually looked to benefit from the attacks, with consumers expected to stay home and engage in activities such as interactive games rather than venture outside, a situation that occurred a decade earlier during the Gulf War. Moreover, the gaming industry expected that Microsoft's Xbox entry in the gaming console business would also spur game sales. As the year came to a close, however, rumors began to circulate that Microsoft was interested in establishing itself in the software side of the gaming industry. To many, Take-Two, with its relatively low stock price and diversified business, was clearly a prime candidate. Whether independent or part of a behemoth like Microsoft, Take-Two appeared destined to remain a major force in the interactive gaming industry.
Principal Subsidiaries: Mission Studios, Inc,; Take-Two Interactive Software Europe Limited; Inventory Management Systems, Inc.; Jack of All Games; Gathering of Developers, Inc.
Principal Competitors: Activision Inc.; Acclaim Entertainment Inc.; Capcom Co.; Eidos plc; Electronic Arts Inc.; Hasbro, Inc.; Konami Co. Ltd.; Midway Games, Inc.; Microsoft Corporation; Mattel Inc.; Namco Ltd.; THQ Inc.
Market Cap (Mil.): $1,367.62
Shares Outstanding (Mil.): 85.53
Annual Dividend: --
Yield (%): --
TTWO.O Industry Sector
P/E (TTM): 16.66 32.35 21.01
EPS (TTM): 169.48 -- --
ROI: 12.23 10.09 16.02
ROE: 13.93 13.11 17.63
Sales: $387 million (2000)
Stock Exchanges: NASDAQ
Ticker Symbol: TTWO
NAIC: 511200 Software Publishers
1993: Take-Two is incorporated.
1995: The company is licensed to produce games for Sony PlayStation.
1996: Acclaim Distribution agrees to distribute Take-Two games.
1997: The company goes public.
2001: Kelly Sumner replaces Ryan Brant as CEO.
Name Age Since Current Position
Strauss Zelnick 52 2011 Executive Chairman of the Board, Chief Executive Officer
Lainie Goldstein 42 2007 Chief Financial Officer
Karl Slatoff 39 2010 Chief Operating Officer, Executive Vice President
Seth Krauss 39 2007 Executive Vice President, General Counsel
Michael Dornemann 64 2007 Director
J. Moses 51 2007 Director
Michael Sheresky 42 2007 Director
Robert Bowman 55 2007 Director
575 Broadway, 6th Floor
New York, New York 10012