Take-Two predicts lower net bookings in Q2 due to subdued gamer spending.

(Reuters) -Take-Two Interactive ‍Software forecast​ second-quarter net bookings below Wall Street targets on Tuesday, in a⁣ sign ​that spending⁢ on games remained under pressure amid inflationary pressures.

U.S. spending on videogame content, including new‌ games‌ and ⁤character skins, was flat in the first half of the year, while⁢ console sales rose‌ 23%, according​ to data from gaming ⁢research firm Circana.

Last fiscal, ⁣Take-Two incurred $79 million in costs relating to unreleased ⁢and canceled titles. It canceled “several titles” that were a part of its fiscal ‍2026 pipeline to focus on ⁢those games with “higher levels of conviction ‌and expectations of success”.

The videogame publisher forecast net bookings for the September​ quarter between $1.4 ‍billion and $1.45 billion, the mid-point⁤ of⁣ which is ⁤below analysts’ average estimate of $1.45 billion, according to Refinitiv data.

CEO Strauss Zelnick, however, said he expects the company to be in a “reasonably good ‍position from an economic point of view” early next year, signaling that demand would improve.

The company⁣ reiterated net bookings ‌forecast for the fiscal ending March 2024. It remains confident⁣ to see a “significant inflection ‍point” in fiscal 2025, when it expects net bookings of ​over $8 billion.

Analysts and investors expect that ‌boost to come from the much-awaited game: “Grand Theft ⁣Auto 6”.

“For investors, the focus is more around them (Take-Two) maintaining their guidance,” said ‌Wedbush Securities analyst Nick McKay.

Take-Two’s shares were up 3.8% after the bell.

Net bookings for the first quarter rose 20% ⁤to $1.20 ⁣billion, driven ⁣by strong demand for its‌ proven gaming titles including “Grand Theft Auto” and “NBA 2K”. Analysts expected $1.21 billion.

Take-Two said net bookings from ⁤customers who make in-game purchases rose 38% in the quarter ended June​ 30.

Quarterly ⁢ad‍ revenue grew about 11%, driven by improvements at Zynga’s ‌mobile games business.

(Reporting by Chavi Mehta in Bengaluru; Editing by Shilpi Majumdar)

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