Take-Two (TTWO.US) Q2 Conference Call: CEO says GTA VI pre-orders are "unprecedented" but refuses to raise guidance, expects a "historic year"

According to Zhitong Finance APP, after releasing its Q2 FY2027 results (as of September 30) on November 9 (US Eastern Time), the American game publisher Take-Two Interactive Software (TTWO.US) held its earnings call. With only 10 days until the November 19 release of Grand Theft Auto VI (GTA VI), management repeatedly emphasized that pre-order demand for the game is "unprecedented" and "far exceeding initial expectations." However, Chairman and CEO Strauss Zelnick made it clear that guidance would not be raised at this time, stating, "We prefer not to declare success before it happens." CFO Lainie Goldstein added that the launch of GTA VI is "just the beginning," with the company poised to embark on "years of growth" on the back of this release.

This quarter's net bookings reached $1.6 billion, an 18% year-on-year decline, slightly below the previously guided range of $1.62–$1.67 billion. GAAP net revenue was $1.5 billion, a decrease of approximately 15.4% year-on-year, also missing the consensus estimate of about $1.66 billion. GAAP net loss was $54 million, or diluted loss per share of $0.29, a significant improvement from a loss of $0.73 per share for the same period last year. Management reiterated their full-year net bookings guidance of $8–8.2 billion and gave, for the first time, Q3 net bookings guidance of $3.35–3.5 billion, implying that GAAP net revenue will "more than double" compared to this quarter; however, the range is below the LSEG consensus estimate of $3.51 billion. After earnings release, TTWO rose over 4% in after-hours trading, having closed the regular session down 3.48% at $207.40.

Focus & Response: Why Not Raise Guidance Despite “Unprecedented” Pre-sales?

The key controversy at this call was management's repeated emphasis on GTA VI’s “unprecedented" and "far above expectations" pre-sales while refusing to factor this upside into financial guidance. In response to a follow-up from UBS analyst, Zelnick explained: "With only a few days before launch, we prefer not to declare success before it happens; as soon as we have actual experience post-launch, we’ll be happy to describe the progress." He stressed that “right now, there’s truly no need to update the numbers.” Consequently, the company's Q3 net bookings guidance of $3.35–3.5 billion is lower than the $3.51 billion consensus, which some in the market interpreted as management hedging conservatively around the launch window rather than committing to an upside volume. International outlets such as GamesBeat and PC Gamer noticed this gap, viewing it as a sign of management’s prudence, avoiding the pitfall of overpromising.

Q2 Performance: Net Bookings Slightly Below Guidance, Impacted by NBA 2K27

Zelnick admitted at the outset that Q2 net bookings of $1.6 billion were “slightly below the $1.62–$1.67 billion guidance range.” He explained that while NBA 2K27 “launched successfully and recorded the series’ second-highest net bookings ever,” this still fell “below our forecast for the period”; mobile performed as planned, while the Grand Theft Auto series “exceeded our expectations.” Goldstein added that recurrent consumer spending (RCS) declined 9% year-on-year, worse than the "down 5%" guidance, mainly due to NBA 2K.

NBA 2K27: Over 4 Million Units Sold But Missed Expectations

Zelnick disclosed that NBA 2K27 has sold over 4 million copies to date, but the launch window was "unusually crowded," with many entertainment products vying for players’ attention. President Karl Slatoff called it "our second-best launch ever" and expects NBA 2K’s net bookings and engagement to accelerate in the second half as they roll out the largest post-launch content updates in the series' history, expressing confidence in the "rebound" they have seen in the past.

GTA Series: GTA V Nears 235 Million Units Sold

Zelnick stated that as of quarter end, Grand Theft Auto V has sold nearly 235 million units globally. The GTA series’ recurrent consumer spending and average GTA+ monthly subscribers both saw double-digit growth. In September, Rockstar Games launched the NoPixel V, an upgraded RPG community edition. He also previewed that the GTA VI marketing campaign is in full swing, with a long-form video debuting on Netflix attracting 31 million viewers within its first four days.

Mobile Business: Toon Blast, Words With Friends Grow, D2C Driven

Zelnick said the mobile business “met expectations.” Color Block Jam net bookings declined double digits from last year’s peak; Toon Blast net bookings rose 4% year-on-year; Words With Friends saw a 6% increase in net bookings due to the TV show Wheel of Fortune crossover. He emphasized that direct-to-consumer (D2C) remains "an important driver of revenue and margins." The company did not disclose the specific D2C share in mobile, only stating that its scale is “significant and growing.”

Full-Year & Q3 Guidance: Reaffirming $8.0–8.2 Billion, Q3 Net Bookings $3.35–3.5 Billion

The company reiterated its FY2027 net bookings guidance of $8–8.2 billion, with expected GAAP net revenue of $7.98–8.18 billion, GAAP net income of $109–142 million, diluted EPS of $0.57–0.75, non-GAAP EBITDA of $1.024–1.082 billion, operating cash flow above $1 billion, and capex around $290 million. The first-ever Q3 guidance: net bookings $3.35–3.5 billion (vs. $1.76 billion a year earlier), GAAP net revenue of $3.27–3.42 billion, and recurrent consumer spending up about 12% YoY. Management expects label contributions to net bookings to be roughly Rockstar Games 37%, Zynga 34%, and 2K 29%.

Capital Allocation & M&A: Net Cash by Year-End, Selective Value-Adding Acquisitions

Zelnick said the company’s current leverage ratio is under 1x LTM EBITDA, with the expectation to return to a net cash position by fiscal year-end. He noted a “disciplined” approach to M&A, with all deals being “value-accretive and successful,” and sees “selective opportunities” ahead. He also mentioned progressing several “large to huge” strategic initiatives, without sharing details.

Full Conference Transcript

Conference Time: November 9, 2026, 4:30 PM US Eastern Time

Company Speakers:

Nicole Shevins — SVP, Investor Relations & Corporate Communications

Strauss Zelnick — Chairman & CEO

Karl Slatoff — President

Lainie Goldstein — Chief Financial Officer

Attending Analysts: Andrew Marok (Raymond James), Doug Creutz (TD Cowen), Eric Handler (ROTH Capital Partners), Christopher Schoell (UBS), Bryan Smilek (JPMorgan), Michael Hickey (StoneX), James Heaney (Jefferies), Omar Dessouky (BofA), Jason Bazinet (Citi), William Lampen (BTIG), Andrew Crum (B. Riley), Taebin Song (Wolfe Research), Martin Yang (Oppenheimer), James Callahan (Piper Sandler).

Operator (Operator)

Welcome to the Take-Two Interactive Software Q2 FY2027 Earnings Conference Call. I’ll now turn the call over to Nicole Shevins, SVP, Investor Relations & Corporate Communications.

Nicole Shevins (SVP, Investor Relations & Corporate Communications)

Good afternoon. Thank you for joining our call to discuss Take-Two’s second quarter results for the fiscal year ending September 30, 2026. Today’s call is hosted by Chairman & CEO Strauss Zelnick, President Karl Slatoff, and CFO Lainie Goldstein. After prepared remarks, we’ll open the call for Q&A.

Before we begin, reminder: statements made during this call which are not historical facts are forward-looking within the meaning of federal securities law. Such statements are based on management’s beliefs and current information and assumptions, and we undertake no duty to update them. Actual results may differ materially from forward-looking statements due to various factors, outlined in our SEC filings, including the Risk Factors section of our most recent 10-K and 10-Q.

Also note, unless otherwise stated, all numbers discussed today are GAAP and all comparisons are year-over-year. More detail on our results and outlook can be found in our press release, which includes items used by management to adjust GAAP financial results for operating performance. The release also reconciles non-GAAP metrics to their closest GAAP equivalents. Slides showing our results and outlook are posted on our website at taketwogames.com along with the SEC filings.

I’ll now turn the call over to Strauss.

Strauss Zelnick (Chairman & CEO)

Thank you, Nicole. Good afternoon, and thank you all for joining us. We delivered $1.6 billion in net bookings for the second quarter, slightly below our $1.62–$1.67 billion guidance. While NBA 2K27 launched successfully and delivered the franchise’s second-highest net bookings ever, it came in below our period expectations. Mobile performed to plan, and the Grand Theft Auto series outperformed as we look ahead to the launch of Grand Theft Auto VI. We are reaffirming net bookings outlook for FY2027 at $8–8.2 billion. Pre-sales for Grand Theft Auto VI are already far exceeding our initial expectations, and we know that soon the numbers will speak for themselves.

Our outlook also includes launches of new mobile titles and previously announced sports titles, plus increased recurrent consumer spending on NBA 2K27 in the back half of the year thanks to the franchise’s largest-ever post-launch content schedule.

Turning to this quarter’s highlights. Grand Theft Auto V continues to broaden its audience, reaching nearly 235 million units sold worldwide to date. As players experience the latest major update Kortz Center Heist, plus monthly events and new races, the series’ recurrent consumer spending and GTA+ monthly subscribers both enjoyed double-digit growth. In September, Rockstar Games released NoPixel V, the next-gen evolution of the Grand Theft Auto V roleplay community, featuring overhauled experiences, new locations, and graphics upgrades focused on player immersion.

To celebrate this month’s launch, players can earn exclusive items in Grand Theft Auto Online by watching select roleplay streamers on Twitch. Rockstar Games will continue to support the expansive Grand Theft Auto Online community with new content and ongoing activities.

Launching globally on November 19, Grand Theft Auto VI is not only incredibly compelling—it will actually be the biggest and most detailed groundbreaking experience ever from Rockstar Games. As you’ve seen, our global campaign is running full-scale, including a long-form video that premiered on Netflix—that week’s #1 most-viewed content on the platform, attracting 31 million viewers in its first four days.

The campaign also includes in-depth features, magazine covers, an official soundtrack (with three tracks debuting top ten on their respective Billboard charts the first week), a special NBA collaboration event “A Night in Vice City” where the Miami Heat will play as “Vice City” against the Milwaukee Bucks, and a series of in-person pop-up events celebrating Vice City in Miami. We’re immensely proud of the Rockstar Games team’s commitment to advancing our medium and the broader entertainment industry.

With NBA 2K27, 2K and Visual Concepts once again deliver the most authentic NBA experience in interactive entertainment, selling over 4 million units to date. The launch timing was especially crowded, with many other entertainment experiences competing for player attention.

We expect net bookings and engagement for the back half of the year to accelerate as 2K and Visual Concepts unveil a strong lineup of in-game content, including exciting themed seasons, new college basketball experiences, and innovations for MyTEAM.

This quarter, Borderlands 4 launched new downloadable content and multiple promotional campaigns, boosting engagement and player retention. The Borderlands franchise has now surpassed 100 million units sold, another milestone for Gearbox and 2K.

This quarter, 2K also released additional content and updates for Mafia: The Old Country, Sid Meier’s Civilization VII, PGA TOUR 2K, and WWE 2K—further boosting gameplay and player engagement. Our mobile business performed as expected, highlighting the importance and impact of a diversified business.

As anticipated, Color Block Jam net bookings declined double digits from the record Q2 a year ago. Toon Blast net bookings rose 4% year-over-year, powered by the new Beam in-game feature that assists puzzle completion and boosts both engagement and level progression. Words With Friends benefited from a multipronged collaboration with popular TV show Wheel of Fortune, including exclusive themed weeks and in-game puzzles and events, driving a 6% increase in net bookings. Our advertising business improved sequentially, as we attracted new partners and increased ad yields. 2K’s mobile titles also continued to perform well, with key games seeing healthy downloads and engagement.

NBA 2K All-Star, our China mobile game partnership with Tencent, surpassed 11 million registered users since launch last year, with robust margins. Our mobile and direct-to-consumer (D2C) channels maintained strong performance, remaining major drivers for revenue and margins as we add new games, nurture direct player relationships, and streamline payment friction for better user experience and repeat purchase. These efforts continue to make our D2C platform a durable and growing engine of net bookings and long-term profitability.

Looking ahead, Zynga continues to develop and test many new titles, with several—like Top Goal—showing promise in soft launch. We believe FY2027 will be a milestone year for Take-Two thanks to our steadfast commitment to delivering highest-quality entertainment experiences.

Guided by our pillars of creativity, innovation, and efficiency, we’re confident in building on this extraordinary year and setting new benchmarks as we execute our long-term success plan. My thanks to our 13,000 colleagues worldwide for their dedication to our shared mission and to the present and future of our company.

Karl Slatoff (President)

Thank you, Strauss. I’d also like to thank our team for bringing their best to our creative, financial, and operational goals every day. Here’s an overview of our recently launched and upcoming titles.

On October 8, 2K and Gearbox released Risk of Rain 2: Hallowed Concepts, introducing two new survivors, a new zone for exploration, and expanded gameplay mechanics for deeper player experiences.

2K continues to advance mobile innovation for the NBA 2K franchise. On October 20, NBA 2K Mobile Season 9 launched, bringing new modes that tie in-game action to the real NBA schedule, a “Rewind” feature revisiting classic NBA moments, and real-time PvP matches. Last week, NBA 2K27 Arcade Edition debuted, offering WNBA Play Now, new expansion teams, deeper career progression, a new 5v5 experience, and unique GOAT skills and rewards.

On October 28, 2K and Visual Concepts continued to support WWE 2K26 with post-launch content, releasing Season 6 of the Ringside Pass plus the standalone Street Fighter Elite Pack—our first collaboration with Capcom—featuring signature moves and themed visual items. 2K also launched Season 13 for WWE SuperCard last week, now nearing 40 million downloads since its debut.

Firaxis announced new content for Sid Meier’s Civilization VII in 2027, including the free Arc of Tomorrow update extending gameplay into the atomic age, and Earthrise, the franchise’s first major paid expansion, introducing expanded core mechanics and progression into the space age. These additions will give players even more reasons to enjoy “one more turn” in this legendary strategy series.

In the coming months, 2K will share updates on PGA TOUR 2K27 and WWE 2K27, both planned for release later this fiscal year. Zynga remains focused on strengthening its existing mobile portfolio through major updates and launches, including Top Goal, now in soft launch. With only days until Rockstar Games releases Grand Theft Auto VI, global preloads are rolling out, which is incredibly exciting. This is a defining moment for our company and the entire entertainment industry, and our teams are proud to support this worldwide phenomenon. With our robust and diversified long-term pipeline, we’re well-positioned to seize numerous opportunities and reach players globally.

Lainie Goldstein (Chief Financial Officer)

Our Q2 net bookings came in at $1.6 billion, slightly below the $1.62–$1.67 billion guidance. Recurrent consumer spending declined 9% year-on-year, worse than our “down 5%” guidance, mainly due to NBA 2K, which accounted for 81% of net bookings. Compared to last year, NBA 2K and mobile declined, while Grand Theft Auto rose. GAAP net revenue was down 16% to $1.5 billion. Cost of revenue fell 20% to $637 million, and operating expenses declined 9% to $978 million. On a management basis, operating expenses were down 9%, better than expected, driven by lower personnel and user acquisition costs.

On outlook, we’re very optimistic about the rest of the year and reiterate our FY2027 net bookings guidance of $8–8.2 billion. With only 10 days to the Grand Theft Auto VI launch, pre-sale levels are extraordinary. Plus, 2K and Visual Concepts are set to deliver the most innovative in-game content schedule ever for NBA 2K, building our confidence that the franchise’s recurrent consumer spending will accelerate in the second half. The largest net bookings contributors are expected to be Grand Theft Auto, NBA 2K, Toon Blast, Match Factory, Empires & Puzzles, Words With Friends, Red Dead, Color Block Jam, WWE 2K, and Zynga Poker. We expect recurrent consumer spending to be flat year-on-year, accounting for 65% of net bookings.

This assumes strong growth in the Grand Theft Auto series—mainly from our strong outlook for Grand Theft Auto VI Ultimate Edition sales (which include add-on content)—as well as high-single-digit growth for NBA 2K. We continue to expect mobile to decline due to last year’s Color Block Jam success and our assumption of slowing trends for several mature Zynga mobile titles. We anticipate net bookings breakdown by label: Rockstar Games 37%, Zynga 34%, and 2K 29%. We’re still on track for over $1 billion of operating cash flow and to be net cash at fiscal year-end. Our capex forecast remains around $290 million.

We expect GAAP net revenue of $7.98–$8.18 billion, cost of revenue of $3.68–$3.8 billion, and operating expenses of $4.08–$4.1 billion. On a management basis, we now forecast operating expense growth of about 5% year-on-year, better than prior, helped by lower user acquisition costs (partly timing-related). Compared to last year, spend growth is primarily driven by Grand Theft Auto VI marketing and higher R&D costs.

On Q3 guidance: we expect net bookings of $3.35–$3.5 billion, up from $1.76 billion a year ago. Top net bookings contributors are expected to be Grand Theft Auto, NBA 2K, Toon Blast, Match Factory, Empires & Puzzles, Words With Friends, Red Dead, Color Block Jam, Zynga Poker, and Toy Blast. We expect recurrent consumer spending to grow about 12% year-on-year, driven by significant growth in Grand Theft Auto (from Ultimate Edition sales), NBA 2K growth, and a mobile decline. We forecast GAAP net revenue of $3.27–$3.42 billion, cost of revenue of $1.65–$1.73 billion, and operating expenses of $1.16–$1.18 billion. On a management basis, opex is expected to grow ~21% year-on-year, mainly due to higher GTA VI launch marketing costs.

Finally, we’re extremely optimistic about the road ahead—next week’s Grand Theft Auto VI launch is just the beginning. We believe that by releasing compelling new content, doubling down on our long-term live services, launching new hits, expanding geographically, and pursuing value-accretive M&A, we can help our core franchises reach new heights of success. In executing this broad and diverse growth strategy, we are confident about unlocking stronger profitability and delivering long-term shareholder value. My thanks to our talented and passionate colleagues worldwide for their hard work that brings us to this pivotal moment in our multi-year growth story.

Q&A Session

Andrew Marok (Raymond James)

Q: You mentioned a major marketing campaign for GTA VI, which clearly involved a lot of innovative ideas. Generally, how has the awareness-building and hype trajectory compared against your expectations? Separately, without commenting on any particular game timing, can you discuss the implications of AI-assisted reverse engineering and game decompilation—how do these affect your approach to development and security?

Zelnick (Chairman & CEO): We are indeed tracking awareness and anticipation—they’re very positive. On the latter point, we’re highly focused on it. This industry has long been largely protected from piracy due to file sizes, complexity of cracking, and server connections. No question, technological barriers make replicating our native gaming experiences very hard. That said, as you point out, this is becoming more challenging, and we’re very aware of it. So we’re fully committed to strengthening our technical defenses and, as appropriate, stepping up legal action. At the same time, to be clear, every entertainment industry deals with some level of piracy. This may affect us more or less, but I believe it's manageable and we’re focused on it.

Doug Creutz (TD Cowen)

Q: On previous earnings calls, you said you expected company revenue and profits to grow in the year after the GTA VI launch. Is that still your view, or has anything changed?

Zelnick: As tempting as that is, Doug, I won’t be giving FY2028 guidance today. We said we’d set a new baseline for future performance, and there is indeed tremendous growth potential. There’s a lot to look forward to. We have the industry’s most diverse, formidable IP portfolio—not just one defining “next” thing. Many elements of our business plan offer opportunities for higher net bookings and profitability.

While many of our franchises—explicitly, there are 15 that have each sold over 5 million in a single release on PC and console—even with this massive scale, we believe series like Grand Theft Auto remain massively underpenetrated. We also think the world will change dramatically over the next decade—because as we stay committed to delivering the highest-quality entertainment, we see new ways to reach players, including via streaming and new geographies. Meanwhile, we will continue interacting with players post-launch—a core part of our recurrent consumer spending strategy.

We're also one of the few interactive entertainment companies willing and able to invest in new IP—our riskiest business, but one that’s paid off well over the last 19 years, though not always. In addition, we take a disciplined approach to M&A—all our deals are value-accretive and successful. We see selective opportunities going forward, especially as our balance sheet is designed to remain very conservative and strong.

By year-end, we expect to return to net cash. Our leverage ratio is currently below one times LTM EBITDA. Lastly, we’re advancing several strategic initiatives, ranging from large to huge, all being considered and developed. So yes, the future looks very bright.

Eric Handler (ROTH Capital Partners)

Q: Given strong expected console RCS growth in Q3, you attribute this mainly to GTA VI Ultimate Edition. Can we infer that—for example, with a standard edition at $80 and the Ultimate at $100, the extra $20 is counted as RCS? Also, regarding the decline in NBA 2K for Q2, was this due to the absence of prior-gen console versions, or was something else missing the mark with players?

Goldstein (CFO): Yes. The add-on content can also be bought separately, so it’s counted as RCS.

Slatoff (President): First, this is our second-best launch ever. We’re very excited, and we do expect NBA 2K to accelerate in the second half. We’ve seen that pattern before—it’s tough to pinpoint exactly what caused a bit of softness versus our expectations. There are other things happening in and out of the market. But with the content slate ahead and Visual Concepts' efforts over the next six months, we’re very confident about a rebound, something we’ve seen before. NBA started strong, and we think it will only build as the year goes on.

Christopher Schoell (UBS)

Q: You mentioned “unprecedented” and “extraordinary” pre-orders. Now, with several months of pre-order data, can you help us understand what keeps you from including some of this upside in guidance? Also, as console prices keep rising, how are you thinking about maximizing GTA's audience beyond traditional console users? Does rising hardware cost increase the importance or timing of rolling out to PC or streaming platforms?

Zelnick: On the first point, with only days to launch, we prefer not to declare success before it happens. Once we have actual post-launch data, we’ll gladly share progress and our perspective. For now, there’s truly no need to update the numbers. As for the second point, any news about new SKUs, etc., will always come from our individual brands.

Schoell: Lainie, margin appears to decline slightly in your annual guidance—what’s driving that?

Goldstein: It’s due to a mix of business composition, partially offset by some changes in operating expense components.

Bryan Smilek (JPMorgan)

Q: Strauss, you mentioned Rockstar will keep supporting the GTA Online community with new content and activities. Can you speak to NoPixel and user-generated content (UGC) in GTA and across the broader industry? And, Lainie, you’ve mentioned user acquisition trends were better than the initial guidance—can you elaborate?

Zelnick: We’re really excited about NoPixel V—it’s the pro version of the RPG business we acquired with FiveM. It's great to see hundreds of thousands of consumers enjoying Grand Theft Auto Online this way. We see further opportunity, but it’s too early to say how it will play out. As long as our community wants to engage with our IP, we’ll do our best to support them—and this is a great example.

Goldstein: We said operating expenses were slightly lower, mainly due to lower user acquisition. This is in part timing-related, reflecting the cadence of new mobile launches.

Michael Hickey (StoneX)

Q: Regarding pre-order demand, Strauss, what do you think drove these stronger-than-expected results? Also, can you discuss Rockstar’s competitive advantages in an AI-influenced world?

Zelnick: This game is highly anticipated and consumers are very, very excited. Every report so far is glowing. Mike, even saying this is making me nervous, but it’s true—and still we’re not ready to declare victory yet. Hopefully, we’ll be able to announce that soon, and I don’t think it’ll be a long wait.

Technology has always worked to our benefit. We use it to create entertainment inside the computer. All innovation makes us better off, and I don’t see that changing—in fact, I hope it accelerates. At the end of the day, though, our reputation is for “making the best entertainment on earth”—and most of the time, we succeed. What drives that success is human creativity harnessing technology—and that’s what you’ll continue to see.

Certain recent advances make asset creation easier, no doubt. That fits the industry’s long-term story. When I entered interactive entertainment a long time ago, building an asset on a computer was really hard. Today it’s much easier. But you know what’s not easier? Creating a hit. Creating a hit was hard then, it’s hard now, and it’ll be hard in the future. Making hits is still a human endeavor.

James Heaney (Jefferies)

(Note: The call experienced technical difficulties and this question was asked again.)

Q: Regarding the “new business opportunities” referenced in your release, can you share specifics? Are there previously untapped areas that have become attractive? Also, can you update us on the progression to D2C for your mobile portfolio, and the revenue/margin benefits you’re seeing?

Zelnick: Thanks for the question. First, apologies for the technical glitch—if my prior answer was unclear, Alan Lewis and Nicole Shevins can follow up. I have specifics about the future I alluded to, but for obvious reasons won’t share much.

Making more and better hits for current platforms is obviously priority one, as reflected in recent performance. Second, new opportunities to reach consumers, including distribution technology like streaming—if enabled, that could dramatically grow our addressable market. Other opportunities include economically reaching new geographies we previously couldn’t serve. India, Africa, and parts of Asia outside China, Korea, and Taiwan (all limited monetization for us) have massive gaming populations. For obvious reasons, we don’t sell much in Russia or Latin America today. Our business is still mostly US, UK, Western Europe plus a handful of Asian markets—yet interactive entertainment is a global pastime, and will only become more so. If we can reach those who don’t necessarily have the latest hardware or live outside the most developed regions, our business can see substantial growth.

Similarly, we believe there’s much more to explore creatively. Interactive entertainment, already hugely exciting via PC, console, and mobile, hasn’t yet reached the creative asymptote seen in other entertainment industries—and I think that will be true for many years. That’s the “unknown unknowns” we’re chasing. There are also other initiatives I can’t discuss.

On D2C: this isn’t a transformation, but an evolution. We still work with third-party partners, value them, and don’t plan to phase them out. We haven’t disclosed D2C as a share of mobile. It’s significant and growing, and it has a meaningful impact on profitability. It also allows us to engage/market to consumers directly—a further benefit.

Omar Dessouky (BofA)

Q: The reasoning for your GTA series recurrent consumer spending YoY growth guidance seems slightly different this quarter. You’re now highlighting strong Ultimate Edition add-on sales as the main driver. When you guided RCS growth for the whole year in August, was this also mainly due to Ultimate Edition content, or were there other contributors potentially deferred to FY2028?

Goldstein: There’s no change between last quarter’s remarks and now. We mentioned Ultimate Edition last year based on our SKU plan, which includes extra content. As I said, this can be purchased separately and is thus counted in RCS, alongside GTA Online. That’s unchanged.

Q: Once initial players complete GTA VI’s content, how do you plan to retain them? For example, do you expect players to continue in San Andreas within GTA Online after finishing Vice City’s single-player campaign, or to just replay the GTA VI campaign?

Zelnick: That’s a “high-class problem.” There’s just so much you can do in GTA. I’ve never had to answer “what to do after you beat it,” because you can always keep playing. There’s so much fun to be had. I expect that will be the case again.

Jason Bazinet (Citi)

Q: About three weeks ago, Bloomberg ran an interview with Rockstar’s publishing head, saying GTA VI’s development costs are under $1.5 billion. This sparked debate—is that for single-player only, or does it include online? Any comment?

Zelnick: We never discuss budgets. Clearly, we put a lot into GTA VI, and I believe it will prove a wise investment. I’d just note that someone saying “not more than X” doesn’t mean it’s close to X, or half, a quarter, or a tenth of X. So I wouldn’t draw conclusions based on that answer.

William Lampen (BTIG)

(Note: Andrew Crum from B. Riley was called on before William Lampen but was apparently unable to connect—he later asked his question in a follow-up.)

Q: In the same interview, it was mentioned that GTA VI enables faster content creation for you. This matches your answer about making more high-quality content as a new business opportunity. Can you clarify—is this about more frequent long-term service updates versus previous GTA games, faster major franchise launches, or both?

Zelnick: Since launching recurrent consumer spending, our goal’s been continued engagement with players between big releases. That’s now how our business operates—most net bookings come from RCS, i.e., ongoing engagement with our hits. Major launches are an important additional pillar. What I’d say is that this model will continue evolving: thanks to the high quality of our franchises, our teams are increasingly able to engage players in ways they love and want more of. If your work isn’t good, no one wants more; if it’s great, they do; and if it’s the world’s best, and new releases maintain that quality, the demand is nearly limitless. Is technology our partner for accelerating engagement, development, and related marketing? Yes. But what ultimately drives success is our human creativity, leveraging technology to make the world’s best entertainment.

Q: We’re seeing a lot of mobile growth driven by in-app ads. Like your D2C update, I’d like to understand the adoption and outlook for advertising revenue.

Zelnick: That’s mainly about mobile for us. I do think there’s huge potential. Historically, mobile advertising’s been mostly other mobile games cross-promoting. Increasingly, brands see value in reaching consumers passionate about interactive entertainment. If we can scale into brand advertising—we’ve started already—that’s a huge opportunity. More broadly, we believe all our engagement should be monetized. Historically, mobile gaming monetized well under 20% of the userbase via in-app purchases—usually about 10%. We can now technically offer users what they want: ad-supported free play, or paid ad-free experience. But offering free play to consumers at our own cost isn’t sustainable. Ad business is a major opportunity, our numbers reflect that, and the business model is changing in our favor.

Andrew Crum (B. Riley)

Q: You referenced continuing PlayStation and Xbox install base growth as part of your Q3 outlook. With console hardware pricing rising, can you share any install base numbers implied by your guidance for GTA VI’s tie ratio? How does it compare to the GTA V launch?

Zelnick: I appreciate that clarity on this helps your modeling, but it doesn’t serve us, so we don’t focus much on it. Our job is to make the best entertainment and deliver it globally. When we provide guidance, we obviously review install bases to confirm our forecasts are rational, and we do that. But we don’t obsess over tie ratios because it won’t change what we do. Right now, Rockstar has completed GTA VI development—with ten days until launch, as expected. They made the best product possible and will deliver it to consumers soon. They're deep in the marketing campaign, and everything's ready. Now, the organization’s job is to get the game to customers at technical A+ level. Then Rockstar will focus on the next step and announce that when appropriate.

Taebin Song (Wolfe Research)

Q: Based on your guidance, Q4 operating expense seems to imply ~10% growth. With GTA VI launching next week, what’s driving that? Is it R&D, marketing, or other?

Goldstein: It’s mainly R&D growth, with moderate sales and marketing increases, and IT spend as well.

Martin Yang (Oppenheimer)

Q: Your PC and console players seem to engage with GTA differently, e.g., the RPG option. Long-term, do you want to reduce the gap in experience between console and PC, or will they remain more distinct due to tech differences?

Zelnick: I’m not sure I’d agree with your premise. Some games—like Civilization—started on PC and came to console later; others, like NBA 2K, essentially launch on all platforms simultaneously. Of course, GTA VI launches November 19 on two consoles. So, it depends on the game. Generally, however, experience is roughly the same on both now, and PC performance doesn’t really differ materially from consoles anymore.

Q: How are you thinking about post-launch marketing for GTA? Should we expect marketing expense mainly in late FY2027? It looks like there are music experiences on launch weekend. Should we expect continued strong marketing post-GTA VI release?

Goldstein: Most marketing will be concentrated around the Q3 launch, with some continued marketing into Q4, but the bulk is in Q3.

James Callahan (Piper Sandler)

Q: True piracy aside, clearly many consumers are interested in modding their game versions. I know you’re supporting RPG, but does this change your view on GTA Online, or open up new monetization?

Zelnick: Good question. Again, our FiveM acquisition reflects support for some consumers engaging with our IP as creators. We allow modding in several other games as well. We’re not dogmatic about that. The FiveM business is profitable and does create economic opportunity.

But as I wrap up—and I think this is the last question, so I’ll finish here—at the risk of repeating myself, our mission is to make the best entertainment on earth and deliver it globally. If we do that right, monetization will naturally follow. I think you’ll see that this and next fiscal year. I think we’re about to have a terrific start to the rest of this year.

Closing Remarks (Strauss Zelnick)

First, thank you all for joining and for your patience with our technical issues. I’d like to take a minute to thank our 13,000 incredibly hard-working, dedicated, and engaged colleagues worldwide. It's been a great quarter. We feel very good about the rest of this year and the years ahead. I can say that with confidence because of the A+ teams who come to work every day—our creative and leadership teams across so many offices worldwide.

I’d also like to thank our shareholders for their support, and thank you all for joining today. Wishing everyone a fun and healthy upcoming holiday season—I know you’ll enjoy playing Grand Theft Auto VI at home. Thank you all.