Move expected to cut costs up to $200 million
Staff Report
Dubai: The publisher of the “Grand Theft Auto” – Take-Two Interactive Software – plans to sack five per cent of its workforce (about 600 employees) and axe several projects in a bid to save costs.
The move is expected to result in total charges of up to $200 million, including around $140 million from canceled projects and $35 million in employee-related costs, according to a filing. It declined to name the projects that have been canceled.
So far, this year, Riot Games, Electronic Arts and Sony Corp have trimmed staff due to uncertain spending from consumers after the pandemic-era boom,
Moreover, according to a recent filing, Zelnick sold a total of 90,851 shares of the company’s common stock, at prices ranging from $147.5987 to $149.5413, resulting in a total value of approximately $13.49 million. The transaction was executed on April 12, 2024.
According to research firm Newzoo, PC and console gaming revenue growth is expected to remain below pre-pandemic levels through 2026 as gamers record fewer hours of playtime.
From 2015 to 2021, PC and console revenue grew rapidly, reaching $94.3 billion, with growth exceeding 50 per cent. The market will grow by a forecasted $14.1 billion from the end of 2023 to 2026, a more conservative growth outlook than before the pandemic.
“It will be increasingly challenging to grow a game’s player base, particularly in our current landscape, where evergreen titles and robust content pipelines reign supreme,” the Newzoo report said.
Take-Two, which had 11,580 full-time employees as of March 2023, last month agreed to buy “Borderlands” maker Gearbox for $460 million in a cut-price deal at a time consolidation is driving up prices for makers of well-known titles.
Canceled projects will account for as much as $140 million of the total charges, while severance and employee-related costs are expected to be up to $35 million, it said. Take-Two will also reduce some office space as part of the move.
Take-Two has been focused on the development of the next installment in the best-selling “Grand Theft Auto” franchise, but some reports have said the title could be delayed into 2026 from 2025.
