How can TakeTwo justify layoffs with this revenue ?

[DanW]

https://companiesmarketcap.com/take-2-interactive/revenue

 

Seems wrong.  

Edited May 3 by DanW
url wrong

[Flush Foot]

Much as it saddens me, don't they have revenues like that because they don't "back the wrong horses" and/or "cut their losses"?

<note: I did not click the link / check the numbers>

[magnemoe]

1 minute ago, DanW said:

https://companiesmarketcap.com/take-2-interactive/revenue/https://companiesmarketcap.com/take-2-interactive/revenue/

Seems wrong.  

Your link is doubled up
https://companiesmarketcap.com/take-2-interactive/revenue/
Is the correct one.
https://companiesmarketcap.com/take-2-interactive/earnings/
The earnings who is money left after expenses is way worse. 

It looks like an overall trend with gaming companies, games getting more and more expensive while creativity is drying out probably as you want as safe an bet as possible to make the huge investment pay off. 

[Infinite Aerospace]

17 minutes ago, DanW said:

https://companiesmarketcap.com/take-2-interactive/revenue

 

Seems wrong.  

Capitalism in a nutshell, more is the only goal.

[Stevie_D]

It is not about making some money, it is not even about making most of the money. In today's business world, it is about making *all* of the money, at any cost.

[Infinite Aerospace]

1 minute ago, Stevie_D said:

It is not about making some money, it is not even about making most of the money. In today's business world, it is about making *all* of the money, at any cost.

Yup, this! That's why we get the copied and pasted Call of Duty games on an almost yearly basis, and we're getting a sixth Grand Theft Auto game, and why we'll no doubt see a four hundredth Fast and the Furious movie in cinemas. You can guarantee that all three of those will continue to bring in the dollar signs, and therefore be supported.

[DanW]

earnings also includes deductions for things like buying other companies.
so, its possible that these purchases didnt help their earnings:
https://en.wikipedia.org/wiki/List_of_acquisitions_by_Take-Two_Interactive

September 2022	Storemaven	Zynga	Israel		Storemaven	[42]
March 2023	GameClub	Take-Two Interactive	USA			[43]
March 2024	Gearbox Entertainment	2K Games	USA	460,000,000	Gearbox Software	[44]

[Fluke]

47 minutes ago, magnemoe said:

https://companiesmarketcap.com/take-2-interactive/earnings/
The earnings who is money left after expenses is way worse. 

This. I love it when people point out revenue, it's a crap metric. That's like trying to gauge a person's wealth by their salary alone. It means nothing. 

[dprostock]

1 minute ago, Fluke said:

This. I love it when people point out revenue, it's a crap metric. That's like trying to gauge a person's wealth by their salary alone. It means nothing. 

Pan American World Airways...

[RayneCloud]

Greed

[PDCWolf]

1 hour ago, DanW said:

https://companiesmarketcap.com/take-2-interactive/revenue

 

Seems wrong.  

You have a project where you invested X initially + Y costs, expecting to earn Z by a certain timeframe.  You've made your math so Z makes sense when you substract X and Y from it. KSP2s reach is dead, sales stagnated, and it's clear the community at large isn't happy and won't be happy with the game no matter what these ex-devs did, thus Z becomes unreachable, and X+Y are now losses.

Since the forecast is bad, continuing development means X and Y keep growing, whilst Z keeps slipping from reach. You simply cut your losses.

That's the point. Sure if you gave them infinite time and money they could make the best game in existence, but they have a budget and time, absolutely ran it through back in 2019, 2020, 2021, 2022, and killed their forecasts by 2023, with a smidge of a tiny recovery by 2024. For a company like T2 that has lost money for the past 7 quarterly reports, axing costs is vital, and this is 70 people that no longer need a salary, a building, heating, supplies, training and so on.

It's not greed and you'll learn that pretty fast when you try to not be an employee all your life.

[Meecrob]

How it works is it frees up resources for Cap Ex so hopefully the next thing they back takes off. This being Take Two, I severely doubt they will back something properly.

[Fluke]

5 minutes ago, PDCWolf said:

It's not greed and you'll learn that pretty fast when you try to not be an employee all your life.

Yep. The 5% reduction in workforce is costing them between 160 and 200 million. Part of that is 25 to 35 million in employee severance and related emplee costs. Nothing is free. Two sides to every story. 

[magnemoe]

6 minutes ago, Fluke said:

Yep. The 5% reduction in workforce is costing them between 160 and 200 million. Part of that is 25 to 35 million in employee severance and related emplee costs. Nothing is free. Two sides to every story. 

Worse is the loss in expertise unless you kill off projects and loose the costs so far. Unless using industry standards and the new one is good at them it takes 4-6 months to get someone fully operational. 

In short the game industry has over spend a lot and too much chasing an live service model who only works for some games but most fails. 

[Jacke]

3 hours ago, dprostock said:

Pan American World Airways...

Oh, wow.

On Tuesday, I saw "2001: A Space Odyssey".  I've loved that film ever since seeing it in 1968 on release.  Including this.

'Course, as Stephen J. Gould said, rewinding history and replaying it wouldn't give the same outcome.  Which also often applies to imagining the future and then actually seeing it.  Pan Am went bankrupt hard in 1991 and the name has only been misused for short times since.

My feelings on Tuesday, recalling all that, are now mirrored by my feelings from late Wednesday to now about KSP.  Its future is uncertain but likely poor.  And that hurts.

 

[dprostock]

11 minutes ago, Jacke said:

Oh, wow.

On Tuesday, I saw "2001: A Space Odyssey".  I've loved that film ever since seeing it in 1968 on release.  Including this.

'Course, as Stephen J. Gould said, rewinding history and replaying it wouldn't give the same outcome.  Which also often applies to imagining the future and then actually seeing it.  Pan Am went bankrupt hard in 1991 and the name has only been misused for short times since.

My feelings on Tuesday, recalling all that, are now mirrored by my feelings from late Wednesday to now about KSP.  Its future is uncertain but likely poor.  And that hurts.

 

About the film: In addition to "inviting" Pan America to participate, the same was done with AT&T, but they declined, saying they doubted the company as such would exist in 2001 given the corporate advances and movements. 

[moeggz]

Click over to “earnings” and you’ll see they lost 1.6 billion last year. Revenue isn’t worth much if your company is bleeding money.

[Flush Foot]

17 minutes ago, moeggz said:

Click over to “earnings” and you’ll see they lost 1.6 billion last year. Revenue isn’t worth much if your company is bleeding money.

I wonder what project lead to the other $200M in losses...

 

/s

[Stevie_D]

1 minute ago, Flush Foot said:

I wonder what project lead to the other $200M in losses...

Maybe they're funding Disney and Marvel movies... 

[Kerbart]

Well their EBIT seems to be -1.6B.  Which might be dur to real cost or high-wire accounting, but right there is the justification.

In addition, the CEO doesn't answer to you, but rather to shareholders who generally are delighted with cost savings.

[herbal space program]

6 hours ago, magnemoe said:

Your link is doubled up
https://companiesmarketcap.com/take-2-interactive/revenue/
Is the correct one.
https://companiesmarketcap.com/take-2-interactive/earnings/
The earnings who is money left after expenses is way worse. 

Wow, those two charts together paint quite a stark picture!  Continually rising revenue against  a $2Bn + crash in net earnings over two years,  going from $600m in the black to a whopping  $1.6bn in the red! How do you even do that? IG's entire budget must be just a drop in the bucket compared to that titanic sum. They must have made a whole bunch of other really bad investments to crash their earnings so badly.

Edited May 3 by herbal space program

[Kerbart]

5 minutes ago, herbal space program said:

Wow, those two charts together paint quite a stark picture!  Continually rising revenue against  a $2Bn + crash in net earnings over two years,  going from $600m in the black to a whopping  $1.6bn in the red! How do you even do that?

Check the balance sheet. Net assets increased with 6B in 2023, I'm sure a lot of the expenses went into buying those assets, whatever they were.

[Lisias]

3 minutes ago, herbal space program said:

Wow, those two charts together paint quite a stark picture!  Continually rising revenue against  a $2Bn + crash in net earnings over two years,  going from $600m in the black to a whopping  $1.6bn in the red! How do you even do that? IG's entire budget must be just a drop in the bucket compared to that titanic sum. They must have made a whole bunch of other really bad investments to crash their earnings so badly.

The myth of the infinite demand.

With ZIRP (the pandemic relief program), suddenly borrowing money became cheaper as hell, so you could literally burn money with impunity if you wanted.

So they used the cheap money to hire people from left to right as a strategic move - if I hire this guy, he will not work on my competitor against me - it's someone else paying his salary (the Government), not me!. As well to buy anything that they laid their eyes on.

But then the ZIRP is over, and all that buyouts increased the fixed costs of the company.

It's interesting, but the budget to buy things is different from the budget from paying salaries. Not only they go on different Cost Centers, but they are classified differently too - buyouts go to the variable Cost Centers, and salaries (and maintenance, and taxes, etc) go to the fixed (recurrent?) Center Costs.

Now, fixed Cost Centers are the problem for the Accountants. Profits are calculated prioritizing fixed Costs (as variable costs are easily amortizable over long periods of time, sometimes even as loss on the taxes, while fixed costs need to amortized constantly).

Now we have a situation where the earnings are going to shrink and the taxes are going to get higher (see changes on the Section 174 of the corporate tax), so now they have a expenditure that is going to be harder to amortize.

So they get rid of the expenditure. Simple like that.

Oh, people are going to lose the jobs due this? Too bad, Corporations are not Charity Entities - you need to pull your weight now to so the money they spent on you this month is amortizable on the next. Otherwise, they will get rid of the costs of paying you.

The system does not promotes maximizing fair deals with the employees. The system is trimmed to maximize profits.

8 minutes ago, Kerbart said:

Check the balance sheet. Net assets increased with 6B in 2023, I'm sure a lot of the expenses went into buying those assets, whatever they were.

Yep.

[herbal space program]

3 minutes ago, Kerbart said:

Check the balance sheet. Net assets increased with 6B in 2023, I'm sure a lot of the expenses went into buying those assets, whatever they were.

Looks like it actually went up  over $9bn from 2022-2023, nearly tripling their total assets. That's a lot of smaller fish to gobble up in a short time!

3 minutes ago, Lisias said:

Oh, people are going to lose the jobs due this? Too bad, Corporations are not Charity Entities - you need to pull your weight now to so the money they spent on you this month is amortizable on the next. Otherwise, they will get rid of the costs of paying you.

I understand what you're saying, but that can't be quite true for a developer of entertainment products that take years to complete. There has to be a certain amount of time such operations are allowed to continue running at a loss -- but then perhaps IG has already expended all the slack  they were going to get in that regard based on projected future sales.

[Lisias]

10 minutes ago, herbal space program said:

I understand what you're saying, but that can't be quite true for a developer of entertainment products that take years to complete. There has to be a certain amount of time such operations are allowed to continue running at a loss -- but then perhaps IG has already expended all the slack  they were going to get in that regard based on projected future sales.

Operations don't run on loss. They run on expectations of profit, so it's an investment.

On the exact moment someone decide that operation is running on loss, someone else calculates the odds of reverting the trend and how much time it will tale to recover the money after the profits are back. If such money can render more profits somewhere else, the axe-man is called.