Take-Two, parent company of 2K Games and Rockstar Games, is planning to initiate layoffs in the coming weeks, in an effort to reduce costs and ‘drive efficiency’ at the company. According to Strauss Zelnick, CEO, these layoffs will not be sweeping – but they will impact a range of departments, including ‘corporate and publishing functions’.
‘We continue to support and build our development teams, and where we have overhead, we have to be very diligent about looking at the overhead,’ Zelnick told GamesIndustry.biz. ‘We don’t expect any kind of broad-based reduction in force. We are going department by department and trying to drive efficiency.’
In its financial earnings report, Take-Two outlined an expected ‘US $50 million of annual savings’ to result from this cost reduction program, which will extend from personnel lay-offs to infrastructure changes, and other unspecified areas. The human cost of these decisions was not dwelt upon, as is typical for investor-facing financial reports.
While an exact reason for these cost-cutting measures was not strictly detailed, the newly-released report does reveal the Q3 FY23 fiscal year was largely disappointing for Take-Two. While net revenue increased 56% to US $1.41 billion (as compared to US $903.3 million in the prior year), this was down on forecasted growth. Likewise, bookings were also below forecasts – despite growing 60% year-on-year.
According to Take-Two, this result was partially due to the underperformance of its Q3 FY23 titles, which included Marvel’s Midnight Suns, New Tales from the Borderlands, and PGA Tour 2K23.
Marvel’s Midnight Suns was particularly noted as being a commercial flop, according to Bloomberg‘s Jason Schreier. Zelnick reportedly told Schreier that the timing of the release may have been to blame, but regardless, the team maintains faith in the title and believes it may have a ‘long tail’, much like other Firaxis Games.
The game launched to critical acclaim, and has maintained a loyal player base with new content drops – including the recent launch of the Deadpool-starring DLC, ‘The Good, the Bad, and the Undead.’ Future packs starring Marvel heroes Morbius, Venom, and Storm may also attract a new audience.
Whether or not this results, it’s hard to deny Take-Two’s assessment of Marvel’s Midnight Suns is disappointing. As a strong new chapter in the Marvel
We’ll likely hear more about the company’s plans in the coming weeks, as it turns its attention to cost reduction measures and those coveted ‘efficiencies’. Our thoughts are with those who may be impacted by the upcoming round of employee lay-offs.