Expectations were high going into the release of Red Dead Redemption 2, the highly-awaited prequel to Take-Two Interactive's (TTWO 0.24%) Western-themed adventure game published by subsidiary Rockstar Games. While it was originally scheduled to launch in the fall of 2017, two subsequent delays moved the release date to October 2018.

Apparently it was worth the wait. In addition to receiving wide critical acclaim, Red Dead Redemption 2 achieved the "biggest opening weekend of all time" and the second-highest-grossing entertainment launch in history, with sales of $725 million in its first three days on the market.

Investors will be eager for additional details when Take-Two reports the results of its fiscal 2019 second quarter -- which ended on Sept. 30, 2018 -- after the market close on Wednesday, Nov. 7. Let's take a look at its recent results and the new game's breakout success, and see what insight we can get into Take-Two's upcoming earnings report.

Four cowboys on horseback on a moonlit night in a screenshot from recently released videogame "Red Dead Redemption 2."

Red Dead Redemption 2 had a record-breaking release. Image source: Take-Two Interactive.

A look back

For its fiscal first quarter, Take-Two delivered net revenue of $388 million, down 7% year over year, but well above the analyst consensus of $288 million and at the high end of management's forecast. Net bookings of $288.3 million declined 17% compared to the prior-year quarter. The company faced difficult comps due to the successful June 2017 release of the Gunrunning update for Grand Theft Auto Online.

The company was much more profitable than anticipated, with net income of $71.7 million, up 19% year over year, resulting in adjusted earnings per share of $0.12, which easily outpaced expectations of $0.07.

Recurrent consumer spending -- from virtual currency, add-on content, and in-game purchases -- grew to 62% of total net revenue, up from just 41% in the prior-year quarter. These additional purchases have helped to smooth out the peaks and valleys in Take-Two's revenue between game releases.

The biggest contributor to the better-than-expected results was the continued strong showing by the Grand Theft Auto (GTA) franchise. By the end of the quarter, Grand Theft Auto V had sold nearly 100 million units and counting -- almost five years after its initial release.

Another smash hit

While it likely won't reach the stratospheric levels of GTA, Red Dead Redemption 2 appears poised to become another smash hit for Take-Two. In addition to posting record-breaking initial sales, the game has near-perfect reviews, achieving 97% on review aggregator OpenCritic, as well as a Metascore of 97 on Metacritic.

While investors will be looking for an update on the game's progress, it's important to note that the recent release on Oct. 26 fell after the close of the company's fiscal second quarter, so it won't make any contribution in the upcoming earnings release.

A red sports car being pursued by police cars and a helicopter in a scene from video game "Grand Theft Auto 5."

Grand Theft Auto remains Take-Two's biggest hit. Image source: Take-Two Interactive.

A look ahead

For the fiscal second quarter, Take-Two forecast revenue in a range of $480 million to $530 million, which would reflect year-over-year growth of between 8% and 19%. GAAP diluted earnings per share are expected to be between $0.43 and $0.53, a decline of between 5% and 23% from the prior-year quarter. Net bookings are expected in a range of $500 million to $550 million.

The juggernaut that is GTA, recent releases like Red Dead Redemption 2 and the 20th-anniversary edition of the NBA 2K franchise -- NBA 2K19 -- as well as strong and continuing growth in recurrent consumer spending, all position Take-Two for a blockbuster year to come.