Take-Two Interactive Software, Inc. Reports Third Quarter Fiscal 2010 Financial Results

Take-Two Interactive Software, Inc. today announced financial results for its third quarter ended July 31, 2010.

Net revenue for the third fiscal quarter was $354.1 million, a sharp increase compared to $94.9 million reported for the same quarter of fiscal 2009.

Take-Two attributed its significantly better-than-expected results for the fiscal 2010 third quarter primarily to the strong performance of Red Dead Redemption, which has sold in more than 6.9 million units worldwide since its launch in May 2010. The Company's catalog also contributed to its third quarter sales, including Grand Theft Auto: Episodes from Liberty City, Grand Theft Auto IV, NBA(R) 2K10 and Borderlands(TM). In addition, digitally delivered content has continued to be a meaningful component of Take-Two's sales.

Income from continuing operations for the third quarter was $12.4 million or $0.14 per diluted share, compared to a loss from continuing operations of $58.3 million or $0.76 per share in the third quarter of fiscal 2009. Excluding certain non-cash and non-operational gains and losses identified on the attached reconciliation of GAAP and non-GAAP measures, non-GAAP net income was $26.0 million or $0.28 per diluted share in the third quarter of fiscal 2010, compared to a non-GAAP net loss of $52.3 million or $0.68 per share in the third quarter of 2009.

For the nine months ended July 31, 2010, net revenue was $785.3 million, compared to $418.5 million for the same period a year ago. Loss from continuing operations for the first nine months of fiscal 2010 was $4.5 million or $0.06 per share, compared to loss from continuing operations of $122.6 million or $1.60 per share for the 2009 period. Excluding certain non-cash and non-operational gains and losses identified on the attached reconciliation of GAAP and non-GAAP measures, non-GAAP net income was $33.6 million or $0.39 per diluted share in the first nine months of 2010, compared to a non-GAAP net loss of $98.3 million or $1.28 per share in the comparable period of 2009.

Product Highlights

• Rockstar Games launched Red Dead Redemption on May 18, during the Company's third fiscal quarter. The title has sold in over 6.9 million units worldwide to date and has been a commercial and critical success, with a near-perfect score of 95* from Metacritic.com.
• Rockstar Games announced a robust plan to support Red Dead Redemption with several downloadable content packs.
• 2K Sports announced that it signed NBA legend, Michael Jordan, to be the cover athlete for NBA(R) 2K11.
• 2K Games announced new downloadable content packs for BioShock(R) 2 and Borderlands(TM) that are planned for release during the Company's fourth fiscal quarter.
• The release of L.A. Noire is now expected during the first half of calendar 2011.
• 2K Games and its studio, Irrational Games, announced that BioShock(R) Infinite is in development and planned for release during calendar 2012.

Management Comment

Strauss Zelnick, Chairman of Take-Two, said, "Our strategic focus on producing a select number of high quality titles, diversifying our product portfolio, and capitalizing on new revenue opportunities has enabled Take-Two to deliver significant growth and profitability in the third quarter and positioned the Company for a strong finish to the fiscal year. At a time when the interactive entertainment industry has continued to feel the impact of an uncertain economy, the exceptional response to Red Dead Redemption shows the value of compelling content and its power to capture consumer interest. These results clearly demonstrate the Company's capacity to translate its world-class creative resources into meaningful financial performance and a solid competitive position in our industry."

Ben Feder, Chief Executive Officer of Take-Two, noted, "Our results for the third quarter and our expectations for the remainder of fiscal 2010 reflect significant progress toward achieving our goals. First, we expect to be profitable in a fiscal year without a major multi-platform Grand Theft Auto release. Second, Take-Two's broad array of hit franchises highlights our ability to deliver a diverse product line. Third, Red Dead Redemption has shown that our creative teams can produce multiple mega-hit franchises. Our fourth quarter roster, including Mafia II, Sid Meier's Civilization V and NBA 2K11, demonstrates our continued ability to create a well-balanced lineup across all of our labels and build upon Take-Two's industry-leading franchises. Finally, we are making strides in extending the value of our intellectual property into two key areas, Asia and online distribution."

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