Take-Two Interactive Software on Tuesday forecast second-quarter net bookings below Wall Street targets, suggesting gaming spending remains under pressure amid inflationary pressures.

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

Take-Two incurred a charge of $79 million (Rs 6.54 crore) for unreleased and canceled titles in the last financial year. It eliminated “several games” from its fiscal 2026 schedule to focus on those with “higher levels of belief and expectations of success.”

The video game publisher expected net bookings in the September quarter to be between $1.4 billion (roughly 11,593 crore) and $1.45 billion (roughly 12,000 crore), according to Refinitiv data, the midpoint of which was lower than the analysis. Analysts on average expected data of 1.45 billion US dollars.

However, Chief Executive Strauss Zelnick said he expected the company to be in a “pretty good position from an economic point of view” early next year, suggesting that demand would improve.

The company reiterated its net bookings forecast for the fiscal year ending March 2024. It remains confident of seeing a “significant inflection point” in FY2025, with net bookings expected to exceed $8 billion (Rs 66,242 crore).

Analysts and investors expect the growth to come from the highly anticipated game “Grand Theft Auto VI.”

“For investors, the focus is more on maintaining their guidance,” said Wedbush Securities analyst Nick McKay.

Shares of Take-Two rose 3.8 percent after hours.

Net bookings rose 20% to $1.2 billion (Rs 9,936 crore) in the first quarter, boosted by strong demand for mature titles such as Grand Theft Auto and NBA 2K. Analysts expected $1.21 billion (Rs 100.18 billion).

Net bookings from customers who made in-game purchases rose 38% in the quarter ended June 30, Take-Two said.

Quarterly advertising revenue rose about 11%, driven by improvements in Zynga’s mobile gaming business.

© Thomson Reuters 2023

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