GTA publisher Take-Two confirms “cost-reduction program” following lackluster sales

Take-Two Interactive has announced that it will implement a "cost-reduction program" to cut spending following a disappointing quarter despite high-profile releases.

The details:

• In a call with investors, Strauss Zelnick, the publisher's chairman and CEO, confirmed that despite positive reviews for Marvel's Midnight Suns, PGA Tour 2K23, and New Tales of the Borderlands, none of the titles met the company's internal sales targets.
• According to Zelnick, speaking with GamesIndustry.biz, titles have been "performing," but a "softness in terms of consumer demand" has contributed to lower sales. Zelnick went on to take personal responsibility for the shortcomings, saying that the teams are "delivering and over-delivering" and that he must find a way for the company to "run this business efficiently and deliver results over time."
• The program aims to reduce annual spending by more than $50 million USD in order to mitigate the impact of any potential drops in demand and sales for the publisher's games. Despite the situation, Zelnick stated that the company does not anticipate "any kind of broad-based reduction in force" and will instead go "department by department and trying to drive efficiency," confirming that layoffs are not in the publisher's immediate plans.

Other noteworthy budget and staffing cuts in the gaming industry:

• A wave of mass layoffs is currently underway, with many well-known companies letting a large number of employees walk in order to reduce spending in response to the current global economic downturn. Microsoft, Unity, and Riot Games all announced layoffs in January, with more likely to follow.
• EA has canceled multiple projects and announced the closure of Apex Legends Mobile in May 2023. Apex Mobile had a great start, bringing in over $20 million in the first two weeks of release before quickly declining, resulting in just $40 million in revenue after a year on the market. Among the projects shelved is a reported Titanfall campaign for Apex Legends and Battlefield Mobile, with employees working on the projects relocating to different positions within EA or being laid off. Due to the cancellation of Battlefield Mobile, Studio Industrial Toys has also been closed.
• Ubisoft canceled three unannounced projects and announced a "targeted restructuring" last month, including the depreciation of €500 million in capitalized R&D in an effort to save a total of €700 million after a disappointing fourth quarter.