(Corrects full-year estimate in paragraph 5 to $2.78 billion from $2.95 billion)
May 13 (Reuters) - Take-Two Interactive Software Inc reported lower-than-expected quarterly revenue and forecast first-quarter sales below analysts’ expectations, as it faces competition from “battle royale” sensations including “Fortnite”, “PUBG” and “Apex Legends”.
The company, however, met its fourth-quarter forecast of $450 million to $500 million and its adjusted earnings of 78 cents per share beat expectations of 75 cents.
On an adjusted basis, the game publisher’s revenue in the reported quarter ended March 31 stood at $488.4 million, missing the average analyst estimate of $506.5 million.
New York-based Take-Two forecast first-quarter revenue of $310 million to $360 million, compared with analysts’ estimates of $418.3 million.
For the full year, it expects adjusted revenue between $2.5 billion and $2.6 billion, below estimates of $2.78 billion, according to IBES data from Refinitiv.
U.S. videogame producers are known to typically give outlook below market expectations, but almost always beat them.
The rapid rise of online, free-to-play games with engaging formats has challenged the dominance of traditional game publishers, such as Take-Two, in the past year.
The battle royale format, which allows dozens of players to battle each other to the death until the last survivor, became wildly popular in 2018 thanks to “PUBG” and Epic Games’ “Fortnite”, two games that are also credited with introducing newer audiences to gaming.
Rivals Electronic Arts and Activision Blizzard also forecast revenue below estimates, adding to fears that competition from free-to-play battle royale games was continuing to eat into sales of big game publishers.
Take-Two’s net income fell to $56.8 million, or 50 cents per share, from $90.9 million, or 77 cents per share, a year earlier. (Reporting by Arjun Panchadar in Bengaluru; Editing by Shinjini Ganguli)