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Take-Two Interactive Struggles to Hold On

By Alex Petraglia on Monday, December 10, 2007 at 2:30 PM EST  

Financial site The Street is reporting that Take-Two Interactive, which owns the multiple Rockstar studios and 2K Games and 2K Sports brands, is struggling to stay afloat this holiday season, due in no small part to the delay of Grand Theft Auto IV.

Originally slated for release this past October, GTA IV won’t see its release until spring 2008, at best. The game’s timely release is critical to the financial future of the publisher, claim analysts.

“Precarious is a pretty accurate word to describe their finances,” says Arvind Bhatia, an analyst with Sterne, Agee & Leach.

From January to July of 2007, Take-Two burned through about $77 million in cash to finance various projects and restructure its operations.

While analysts forecast that GTA IV could sell 7.5 million to 8.5 million copies by November 2008 and 10.5 million to 11.5 million in 12 months, Take-Two may need to seek outside financing just to finish the game’s production.

While BioShock sold much better than anticipated this past quarter and no one is questioning the sales potential of Grand Theft Auto IV, Take-Two seems to be left holding the short end of the stick at the moment, while other publishers like Activision and EA are enjoying strong holiday sales across the board.

In an effort to bolster its standing in the industry, Take-Two’s board members have been restructuring many internal positions over the past few months. Just today, it was announced that Gary Dale, Chief Operating Officer of Rockstar Games since January 2007, will be stepping up as Executive VP of Take-Two. In his new role, Dale will be tasked with optimizing the company’s “sales and distribution activities, pursuing business development opportunities, and serving as corporate liaison with all of Take-Two’s publishing labels.”

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