Take-Two's revenue forecast is missing as "Fortnite" competition intensifies

(Reuters) – Take-Two Interactive Software Inc. has announced a quarterly sales figure lower than expected and a forecast of first-quarter revenue lower than analysts' expectations, due to the fierce competition of games free "Royal Battle" "Fortnite" and "PUBG".

Shares of the company fell 2% in prolonged trading

The Battle Royale format, which allows dozens of players to fight until the death of the last survivor, became very popular in 2018 thanks to "PUBG" and "Fortnite" from Epic Games, two games who also helped introduce new audiences to the games.

The game publisher, however, has achieved its fourth quarter revenue forecast of between $ 450 million and $ 500 million. Its adjusted earnings of 78 cents per share exceeded expectations by 75 cents, boosted by its "NBA 2K19," "Red Dead Redemption 2" and "Grand Theft Auto V" titles.

Red Dead Redemption 2 has sold more than 24 million units worldwide so far, the company announced.

The gaming publisher's adjusted business figure, which the company calls net bookings, is set at $ 488.4 million in the quarter ended March 31, with no net profit. Estimated at $ 506.5 million by analysts.

Take-Two, based in New York, expects a turnover of $ 310 to $ 360 million in the first quarter and an annual business figure of $ 2.5 to $ 2.6 billion. Analysts were expecting a turnover of $ 418.3 million for the quarter and $ 2.78 billion for the year, according to Refinitiv's IBES data.

Rivals Electronic Arts and Activision Blizzard also forecast lower-than-expected quarterly and annual revenues, adding to fears that competition from royal battle games will continue to weigh on the sales of major game publishers.

US video game producers are known to give prospects lower than market expectations, but almost always beat them.

"We anticipate that fiscal year 2020 will be a solid new year for Take-Two, with operating results currently lower than those of fiscal 2019, due to the extraordinary success of Red Dead Redemption 2. Said President and CEO Strauss Zelnick.

Take-Two's net income fell to $ 56.8 million, or 50 cents a share, from $ 90.9 million, or 77 cents a share, a year earlier.