Fiscal '25 and '26 Guidance Update
Q: Any update to fiscal '25 or '26 forecast?
A: Lainie Goldstein mentioned that net bookings for fiscal '25 are currently tracking a little above $7 billion, representing huge growth over this year. The teams are making excellent progress on game development, and the pipeline remains groundbreaking for next year and beyond. Nothing material has changed regarding the lifetime value of the portfolio. They will provide their initial outlook for fiscal '25 when they report Q4 and full-year fiscal '24 results in May. -

Grand Theft Auto VI Anticipation
Q: How does anticipation for GTA VI compare to GTA V?
A: Strauss Zelnick noted that anticipation for GTA VI is running much, much higher than it was for GTA V. While avoiding specific predictions, they recognize that anticipation is very high. -

Factors Affecting Guidance Cut
Q: What caused the guidance cut for the fiscal year?
A: Lainie Goldstein outlined that the biggest drivers for changes in the fourth-quarter forecast were: first, user acquisition spend and marketing for Match Factory; second, lower mobile advertising revenues; third, updated expectations for NBA 2K24; and fourth, the shift of an unnamed title out of the year. These factors impacted both the top line and operating income. -

Cost-Cutting Programs and Savings
Q: How much savings have been generated from cost-cutting?
A: Lainie Goldstein reported realizing over $100 million in savings from synergies with Zynga and over $50 million from the original cost-cutting program. The new plan is expected to enhance margins by reducing existing costs and avoiding future costs. It will be incremental and more robust than the prior cost reduction program. More details will be provided next quarter. -

NBA 2K24 Performance
Q: How is NBA 2K24 performing?
A: Karl Slatoff indicated that engagement with NBA 2K24 has been incredible. The Gen 9 SKU is performing exceptionally well, showing double-digit growth over 2023. Momentum around recurrent consumer spending is strong, driven by the season pass. However, Gen 8 is underperforming expectations as players transition to Gen 9. Any softness observed is attributed to the Gen 8 product. -

Zynga Revenue Synergies
Q: What progress on revenue synergies from the Zynga deal?
A: Strauss Zelnick stated they have made great progress, with the biggest synergy being their direct-to-consumer initiative allowing consumers to purchase in-app currency directly. This initiative has been exceedingly successful, rolled out quickly, and quite profitable, with more upside to come. They are also making progress in numerous other areas. -

Hypercasual to Hybrid Casual Transition
Q: Is there a shift in hypercasual games allowing in-app purchases?
A: Strauss Zelnick explained that Rollic is focusing on making more robust, durable, and long-lasting titles that offer more value to consumers. As these games become more durable, there's an opportunity for in-app purchases. They are moving from hypercasual to hybrid casual, meeting consumer demand for deeper, more compelling, and longer-lasting games. -

Netflix Partnership
Q: Why partner with Netflix on GTA Trilogy for mobile?
A: Strauss Zelnick said they balance various elements in choosing distribution channels. They tend to support emerging platforms that serve consumers and make sense economically. While not viewing it as a blueprint for mobile distribution, they are open to doing more with Netflix if consumers are happy and the economics are favorable. - -

Microsoft's Strategy and Costs
Q: Thoughts on Microsoft making titles more widely available?
A: Strauss Zelnick noted that big console titles are expensive and time-consuming to create. While not speaking for Microsoft's strategy, he acknowledged the significant costs and time involved in developing top-quality games. He expressed confidence in Microsoft's management team and their decisions. -

Marketing Strategies
Q: Has the philosophy for marketing new games changed?
A: Strauss Zelnick stated that marketing is driven by their labels and studios, without a fixed schedule tied to marketing needs. They don't have a standard approach and prefer to let the studios decide on marketing strategies for new game releases. -

GTA as a Transmedia Property
Q: Could GTA become a transmedia property with external IP?
A: Strauss Zelnick prefers to let their labels discuss creative content. While not providing specifics, he deferred to Rockstar to talk about future developments in due time. -

Disney and Epic Partnership Impact
Q: How might the Disney and Epic deal affect IP access?
A: Strauss Zelnick views any consumer excitement as positive for Take-Two. He noted they have the best collection of owned IP and are the number two player in the space. He sees the deal as a net positive for the industry and isn't betting against Epic or Disney. -

Decision Process for Launching GTA VI
Q: How is the launch timing for GTA VI decided?
A: Strauss Zelnick emphasized they seek perfection and will release when they feel they have optimized creatively. Financial incentives align with shareholder interests, and while recognizing potential tension between time to market and perfection, they err on the side of perfection. -

iOS Fee Changes Impact
Q: Any learnings from iOS fee changes in Europe?
A: Strauss Zelnick noted that there are many moving parts, with contradictory decisions in different regions. He remains of the view that distribution costs will come down meaningfully and they already are. The impact on mobile strategy will depend on how these factors play out. -