Why can't Take-Two Interactive (NASDAQ:TTWO) get things right the first time?
Why can't it stick to its original guidance? Why can't it meet the original ship dates for pivotal game releases? And why, oh why, couldn't it have accepted when Electronic Arts (NASDAQ:ERTS) made a buyout offer for $25.74 a share?
Take-Two is taking a fire hose to its fiscal year outlook, partly because it just delayed its highly anticipated BioShock 2 game until fiscal 2010.
Things have deteriorated quickly for the spunky software publisher behind the monster Grand Theft Auto series. Less than two months ago, Take-Two figured it would at least break even this year, on a non-GAAP basis. Now the serial disappointer is projecting a sharp loss, between $0.80 a share and $0.95 a share.
Release delays happen often in the industry, but they seem to happen to Take-Two more often than most. Mafia II and Red Dead Redemption also got bumped in fiscal 2010 during May's quarterly report. Delays would normally seem like a zero sum game to shareholders, since subtractions in fiscal 2009 become additions in fiscal 2010, but you know the drill by now. Take-Two will probably be delaying games next year, too.
This is a tough time for the industry. Comps finally began to fall at specialty retailer GameStop (NYSE:GME), and even shares of market leader Activision Blizzard (NASDAQ:ATVI) are showing fatigue. Despite the recent months of rallying equities, Activision Blizzard is trading closer to its 52-week low than its 52-week high.
In short, Take-Two is getting hit from both sides. Internal delays and lackluster releases are eating away at it from the inside. Penny-pinching gamers in a tough economy are gnawing away from the outside.
Pessimism, sadly enough, is about the only thing that Take-Two hasn't been able to delay these days.
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