Everyone knew that last year's success of Grand Theft Auto IV would be a hard act to follow for Take-Two Interactive (NASDAQ:TTWO). It fishtailed into the record books as the fastest selling game of all-time last April. Only the skidmarks remain.

Last night's fiscal second-quarter report was supposed to be a dud. Last year's blowout profit of $1.29 a share for the quarter that ended in April? It's been washed away on a trailing basis, with a small loss this time around. Last year's heady net revenue of $539.8 million? Toast! It fell by 57% to $229.7 million this past quarter.

As bad as it seems, analysts actually expected the video game company to do even worse. After all, consider the company's biggest sellers during the period:

  • The Lost and Damned, the first episodic installment to Grand Theft Auto IV, but available only on Microsoft's (NASDAQ:MSFT) Xbox 360 via a digital download.
  • Major League Baseball 2K9, a worthy entry in one of the few pro sports categories not dominated by Electronic Arts (NASDAQ:ERTS).
  • Grand Theft Auto IV, proving that last year's smash still has some gas in the tank (though it's probably closer to running on fumes at this point).
  • And lastly, Grand Theft Auto: Chinatown Wars for Nintendo's (OTC BB: NTDOY.PK) DS. Really? A violent M-rated game on a kid-friendly portable platform? Of course, it only did marginally well.

The current quarter won't get any prettier. Take-Two expects a steep sequential drop in revenue and an even wider deficit. When you only have a pair of titles on the release slate -- Birthday Party Bash for Nintendo's Wii and The BIGS 2 baseball simulation -- you may as well tap the snooze bar and wake up three months later.

Thankfully, Take-Two is closing out its fiscal year strongly. The highly anticipated BioShock 2 and the second GTA4 episodic installment for Xbox Live users are leading the way. The final quarter should be so strong that Take-Two expects to earn more in the fourth quarter than it lost during the first three periods.

Take-Two's guidance calls for at least breakeven results this fiscal year, with the possibility of earning as much as $0.20 a share. Analysts are targeting a profit of $0.12 a share, so Take-Two is still in the ballpark (no MLB 2K9 pun intended). Take-Two's projections are reasonable, especially since it's bumping two releases -- Mafia II and Red Dead Redemption -- into fiscal 2010.

Was Take-Two wrong to refuse EA's buyout offer of $25.74 a share last year? You bet, given the lackluster financials we  now observe. Should growth investors who want a little more predictability consider larger rival Activision Blizzard (NASDAQ:ATVI), a company with a steadier pipeline and expectations of bottom-line growth this year? Absolutely.

However, Take-Two's stock has already been slammed into the single digits. The prospects are decent for a healthy holiday push here. And -- hey -- who's to say that an exposed EA, or even Viacom (NYSE:VIA), won't try to get in ahead of the fourth-quarter rebound with a friendly buyout bid in the mid-teens?

I guess that's the good thing about being a hard act to follow. A year from now, we'll be talking about how 2009's results make for especially easy comparisons.

Other games to play:

Electronic Arts, Nintendo, and Activision Blizzard are Motley Fool Stock Advisor recommendations. Take-Two is a Rule Breakers newsletter picks. Microsoft has been singled out in Inside Value. Play along with any of the premium newsletters for the next 30 days with a free backstage pass.

Longtime Fool contributor Rick Munarriz will admit to still playing video games, though finding time is the rub. He does not own shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.