The only thing I took from this, is that Take-Two spent 2.18 billion more buying companies up last quarter than they were worth. And that they spent an additional 400 million or so to do that....
The only thing I took from this, is that Take-Two spent 2.18 billion more buying companies up last quarter than they were worth. And that they spent an additional 400 million or so to do that.
It's only wasteful if the newly acquired studios make less than one game and then are shuttered to look good on next year's budget, but that would never happen, right?
It's only wasteful if the newly acquired studios make less than one game and then are shuttered to look good on next year's budget, but that would never happen, right?
Right, I don't think Take-Two is going to pull a move like EA did with Bioware and put it through a bunch of internal drama. Take-Two owns 2K, which prints money. Gearbox Software's own IPs, like...
Right, I don't think Take-Two is going to pull a move like EA did with Bioware and put it through a bunch of internal drama. Take-Two owns 2K, which prints money. Gearbox Software's own IPs, like Borderlands and Homeworld, that have recent releases that will make them look very good as a subsidiary unit. And Gearbox also has publishing deals with smaller devs, so they're getting a cut of the indie market as well. All that trickles up to Take-Two now.
But on the pessimistic side of things, Microsoft's purchases and consolidation of so many developers hasn't manifest in the magical benefits that fans hoped to see (like getting more of Bethesda's IPs on a faster track to development, or making an Obsidian Fallout game happen again). Stuff like that just isn't in the cards in the first couple years of acquisition.
Well, Zynga was one of them and I'm (sadly) optimistic that it'll make its money back very quickly. Gearbox et al. the console studios? yeah, it'll be a while.
Well, Zynga was one of them and I'm (sadly) optimistic that it'll make its money back very quickly. Gearbox et al. the console studios? yeah, it'll be a while.
In this case I think the goodwill write-down is from choosing to take that hit now, in an otherwise worthless quarter/fiscal year, than to do it in FY2025 when they'll have some stellar results...
In this case I think the goodwill write-down is from choosing to take that hit now, in an otherwise worthless quarter/fiscal year, than to do it in FY2025 when they'll have some stellar results (from GTA 6 sales as well as a LOTR and GOT licensed games).
The goodwill hit is probably from Take-Two's purchase of Gearbox Software from Embracer. I'm guessing that Take-Two is assessing Gearbox's value as solely their physical assets (property value, IP value, etc.) and they're saying that they paid ~$2.18B for the brand-name, among other things, which is an intangible they can essentially explain to investors as having been the price of doing business (to acquire the company) or that market factors changed the inherent value (but not the future value or revenue generated). Take-Two could also be accepting that the value of the Gearbox HQ property has depreciated pretty significantly. In the end, gamers and investors will shrug this off because Gearbox Software's games (Borderlands, Homeworld) will continue to print money for the parent company, if managed properly.
There is a lot of hands on for GTA VI, and no GTA VI in sight. The cost of doing business. And that Zynga transaction wasn't cheap. That said, you have to remember that Take Two is a very large...
There is a lot of hands on for GTA VI, and no GTA VI in sight. The cost of doing business. And that Zynga transaction wasn't cheap.
That said, you have to remember that Take Two is a very large publisher, you look at their studios and you realize it's not just Rockstar but a half dozen large studios put together, then dozens more smaller studios under those publishers.
I looked up the number of employees, and this may be inaccurate, but it says Take Two employs around 11k people (before the large layoffs) That's an average of $750k cost per employee (per...
I looked up the number of employees, and this may be inaccurate, but it says Take Two employs around 11k people (before the large layoffs)
That's an average of $750k cost per employee (per quarter, averaging out to 3 million a year), I know that salaries aren't the only thing they have to spend money on, but it does have to be a large chunk right?
Yeah it's going to be a large chunk but you have to remember they're paying for buildings, top-of-the-line equipment, contractors who are doing odd jobs like photography, healthcare for the...
Yeah it's going to be a large chunk but you have to remember they're paying for buildings, top-of-the-line equipment, contractors who are doing odd jobs like photography, healthcare for the employees, legal expenses, etc. I mean, the list of things they're spending money on outside of their employees is pretty much endless.
The only thing I took from this, is that Take-Two spent 2.18 billion more buying companies up last quarter than they were worth. And that they spent an additional 400 million or so to do that.
Seems wasteful.
It's only wasteful if the newly acquired studios make less than one game and then are shuttered to look good on next year's budget, but that would never happen, right?
Right, I don't think Take-Two is going to pull a move like EA did with Bioware and put it through a bunch of internal drama. Take-Two owns 2K, which prints money. Gearbox Software's own IPs, like Borderlands and Homeworld, that have recent releases that will make them look very good as a subsidiary unit. And Gearbox also has publishing deals with smaller devs, so they're getting a cut of the indie market as well. All that trickles up to Take-Two now.
But on the pessimistic side of things, Microsoft's purchases and consolidation of so many developers hasn't manifest in the magical benefits that fans hoped to see (like getting more of Bethesda's IPs on a faster track to development, or making an Obsidian Fallout game happen again). Stuff like that just isn't in the cards in the first couple years of acquisition.
Well, Zynga was one of them and I'm (sadly) optimistic that it'll make its money back very quickly. Gearbox et al. the console studios? yeah, it'll be a while.
In this case I think the goodwill write-down is from choosing to take that hit now, in an otherwise worthless quarter/fiscal year, than to do it in FY2025 when they'll have some stellar results (from GTA 6 sales as well as a LOTR and GOT licensed games).
The goodwill hit is probably from Take-Two's purchase of Gearbox Software from Embracer. I'm guessing that Take-Two is assessing Gearbox's value as solely their physical assets (property value, IP value, etc.) and they're saying that they paid ~$2.18B for the brand-name, among other things, which is an intangible they can essentially explain to investors as having been the price of doing business (to acquire the company) or that market factors changed the inherent value (but not the future value or revenue generated). Take-Two could also be accepting that the value of the Gearbox HQ property has depreciated pretty significantly. In the end, gamers and investors will shrug this off because Gearbox Software's games (Borderlands, Homeworld) will continue to print money for the parent company, if managed properly.
That makes a lot of sense I guess. Still... Can't wait to see how many they lay off. Will be a sad day.
How on earth is a video game publisher spending 8 billion dollars a quarter?
There is a lot of hands on for GTA VI, and no GTA VI in sight. The cost of doing business. And that Zynga transaction wasn't cheap.
That said, you have to remember that Take Two is a very large publisher, you look at their studios and you realize it's not just Rockstar but a half dozen large studios put together, then dozens more smaller studios under those publishers.
I looked up the number of employees, and this may be inaccurate, but it says Take Two employs around 11k people (before the large layoffs)
That's an average of $750k cost per employee (per quarter, averaging out to 3 million a year), I know that salaries aren't the only thing they have to spend money on, but it does have to be a large chunk right?
Yeah it's going to be a large chunk but you have to remember they're paying for buildings, top-of-the-line equipment, contractors who are doing odd jobs like photography, healthcare for the employees, legal expenses, etc. I mean, the list of things they're spending money on outside of their employees is pretty much endless.
They bought Zynga and Gearbox and are taking the goodwill impairment now so that FY2025 looks even better with GTA6.