In the wake of purchasing Gearbox from Embracer Group, a new report details that Take-Two Interactive shut down two developers.
A screenshot from Red Dead Redemption 2 (2019), Rockstar Games
At the end of March, Take-Two Interactive announced it would purchase Gearbox for $460 million according with the company’s Chairman and CEO Strauss Zelnick stating, “Our acquisition of Gearbox is an exciting moment for Take-Two and will strengthen our industry-leading creative talent and portfolio of owned intellectual property, including the iconic Borderlands franchise.”
He added, “This combination enhances the financial profile of our existing projects with Gearbox and unlocks the opportunity for us to drive increased long-term growth by leveraging the full resources of Take-Two across all of Gearbox’s exciting initiatives.”
A screenshot from Borderlands 3 (2020), Gearbox Software
Along with purchasing Gearbox in March, Take-Two also merged with Zynga in May 2022 with Zelnick stating at the time of the merger, “We are thrilled to complete our combination with Zynga, which is a pivotal step to increase exponentially our Net Bookings from mobile, the fastest-growing segment in interactive entertainment, while also providing us with substantial cost synergies and revenue opportunities.”
He added, “As we bring together our exceptional talent, exciting pipelines of games, and industry-leading technologies and capabilities, we believe that we can take our portfolio to another level of creativity, innovation, and quality. Each of our teams has a strong history of operational execution, and together, we expect that we will enhance our financial profile through greater scale and profitability, paving the way for us to deliver strong shareholder value.”
According to Tech Crunch the merger cost $12.7 billion.
Key art for Empires & Puzzles (2017), Zynga
About three weeks later a report from Bloomberg’s Cecilia D’Anastasio claimed the company would be cutting around 5% of its workforce.
D’Anastasio reported, “Take-Two Interactive Software Inc., the company behind the Grand Theft Auto video games, plans to fire 5% [of] its workforce and drop several projects as part of a cost-savings drive.”
She notes the company plans to cut costs by around $200 million. $140 million is being cut by the scrapping of numerous projects while $35 million will be done by firing its workforce.
A screenshot from Red Dead Redemption 2 (2019), Rockstar Games
Now, Washington State’s Employment Security Department reports that Take-Two Interactive permanently shut down a game studio in Seattle and laid off 70 employees as of April 29th.
Bloomberg’s Jason Schreier reports this was Take-Two Interactive’s Intercept Games, who made the Kerbal Space Program 2 game, a space flight simulator.
Not only did Take-Two Interactive shut down Intercept Games, but Schreier reported the company also shut down Rollerdome developer Roll7, which was based out of London. Schreier detailed, “Take-Two plans to close the studio and will offer severance agreements to its staff.”
A screenshot from Kerbal Space Program 2 (2023), Intercept Games
These latest closings come in the wake of the company’s most recent earnings report that revealed it had $1.34 billion net bookings “with outperformance in Grand Theft Auto V and Grand Theft Auto Online, Red Dead Redemption series, and Toon Blast.” However, this was down 3% compared to last year’s third quarter.
The company also updated its fiscal 2024 outlook by decreasing projected net bookings from a range of $5.45 to $5.55 billion to a range of $5.25 to $5.3 billion.
Nevertheless, Zelnick touted the earnings stating, “We achieved solid third quarter results, including Net Bookings of $1.3 billion. Grand Theft Auto V and Grand Theft Auto Online, the Red Dead Redemption series, and Zynga’s in-app purchases, led by Toon Blast, exceeded our expectations, as we launched engaging new content, partnerships, and activations. This was partially offset by some softness in mobile advertising and sales for NBA 2K24.”
A screenshot from Grand Theft Auto V (2015), Rockstar Games
The company also reported a $91.6 million net loss for the quarter. For the nine months ending December 31st, it reported it had a net loss of $841.2 million.
A screenshot of Take-Two Interactive’s FY 20234 Third Quarter
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