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TakeTwo Interactive Software Inc. Reports Operating Results (10-KT)

December 20, 2010 | About:

TakeTwo Interactive Software Inc. (NASDAQ:TTWO) filed for the period ended 2010-03-31.

Taketwo Interactive Software Inc. has a market cap of $1.1 billion; its shares were traded at around $12.93 with a P/E ratio of 22.29 and P/S ratio of 0.95. TTWO is in the portfolios of Carl Icahn of Icahn Capital Management LP, Arnold Schneider of Schneider Capital Management, Larry Robbins of Glenview Capital, Mario Gabelli of GAMCO Investors, Jim Simons of Renaissance Technologies LLC, Louis Moore Bacon of Moore Capital Management, LP, Pioneer Investments, Paul Tudor Jones of The Tudor Group, Steven Cohen of SAC Capital Advisors, Bruce Kovner of Caxton Associates.

Highlight of Business Operations:

environment. The "Global Video Game Market Update" published by International Development Group ("IDG") in February 2010 forecasts that the annual sales of video game software in North America, Europe, and Japan will decline from $25.0 billion in 2009 to an estimated $18.4 billion in 2014. In addition, IDG forecasts that the number of video game software units sold annually will also decline from 586.0 million in 2009 to an estimated 442.9 million in 2014. Details on the estimated global sales value and unit sales of console, handheld and PC software from 2009 through 2014 are as follows:

In February 2010, we completed the sale to SYNNEX Corporation ("Synnex") of our Jack of all Games third party distribution business, which primarily distributed third party interactive entertainment software, hardware and accessories in North America for approximately $44.0 million, including $37.3 million in cash, subject to purchase price adjustments, and up to an additional $6.7 million, subject to the achievement of certain items. The financial results of this business, which were previously reported as our distribution business, have been classified as discontinued operations in our Consolidated Statements of Operations for all periods presented. The assets and liabilities of this business are reflected as assets and liabilities of discontinued operations in the Consolidated Balance Sheets for all periods presented. See Note 3 to our Consolidated Financial Statements for additional information regarding discontinued operations.

The development cycle for our titles generally ranges from 12 to more than 24 months and our top-selling titles could take up to three years or longer to develop. Although we often simultaneously develop our software for multiple platforms, in certain cases it can take 9 to 12 months to adapt a product for additional hardware platforms after initial development for one platform is completed. The cost to develop a frontline software product generally ranges from $10 million to $40 million, with our top titles exceeding these amounts. We expect that development costs and time will continue to increase for current generation platforms.

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About the author:

Charlie Tian, Ph.D. - Founder of GuruFocus. You can now order his book Invest Like a Guru on Amazon.

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GuruFocus has detected 5 Warning Signs with Take-Two Interactive Software Inc $TTWO.
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