Just when people thought that the layoff wave for video game companies was over, one of the biggest publishers announced that it would conduct job cuts for hundreds of its employees, as well as cancel a few video game titles that were already in development.
Take-Two Interactive Clean Up
In a recent SEC filing, the GTA VI publisher revealed that it will be laying off 5% of its workforce. With around 11,000 employees, we're looking at approximately 550 staffers losing their jobs. On top of that, the company is also canceling titles it was already working on.
Take-Two Interactive says it could spend between $25 million to $35 million for employee severance and other employee-related costs, although it might see higher charges when it comes to the cancellation of its projects.
As mentioned by Kotaku, the filing states that title cancellations could cost the video game giant between $120 million to $140 million, and that doesn't include the $40 million to $60 million of the total charges in "future cash expenditures."
What's worse is that the job cuts were likely not anticipated by employees, considering that Take-Two CEO Strauss Zelnick said just a few weeks back that it had "no current plans" to lay off any more employees as it looks into a cost-reduction program.
The cost reduction might have something to do with Take-Two Interactive's upcoming acquisition, wherein the company plans to purchase Gearbox Entertainment. The latter is the creator of the looter shooter franchise Borderlands.
The deal will reportedly cost the GTA VI publisher $460 million, and is is expected to be finalized by the end of June. To finance the deal that almost reached half a billion dollars, Take-Two stocks are set to be sold.
On top of that, the company has seen a successful year so far with high net bookings for the 1st quarter of 2024. Take-Two Interactive saw $1.2 billion last quarter, which was an increase of 20% compared to the same quarter last year.
Expecting Bigger Revenue
The publisher is already anticipating massive success in 2025 with the release of its latest game in the series. GTA VI is already expected to make over $1 billion in just its first week, which is not far-fetched considering the hype around the trailer.
Rockstar Games' Grand Theft Auto is among the biggest of all video game franchises, with GTA V reaching $8.5 billion in revenue worldwide. It saw a billion dollars in sales in just the first three days of sale, and GTA VI could do much better.
Industry Analyst Joost Van Dreunen believes that GTA VI will shift 25 million units at launch, according to Gaming Bible, which means that it could very well beat the previous record. It's no surprise that the upcoming game is already a shoo-in for top-selling games.
The trailer's early release flooded the internet and saw 90 million views in just 24 hours. Now four months old, the trailer already has 185 million views and 11 million likes, showing just how popular it will be once it is released.
