Take-Two, parent company of 2K Games and Rockstar Games, is planning to initiate layoffs within the coming weeks, in an effort to reduce costs and ‘drive efficiency’ at the company. Based on Strauss Zelnick, CEO, these layoffs won't be sweeping – but they will impact a variety of departments, including ‘corporate and publishing functions’.
‘We continue to support and build our development teams, and where we have overhead, we must be very diligent about exploring the overhead,’ Zelnick told GamesIndustry.biz. ‘We do not expect any type of broad-based decrease in force. We're 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, along with other unspecified areas. The human cost of these decisions wasn't dwelt upon, as is typical for investor-facing financial reports.
While an exact reason for these cost-cutting measures wasn't 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 (when compared with US $903.3 million in the prior year), it 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, including Marvel’s Midnight Suns, New Tales from the Borderlands, and PGA Tour 2K23.
Marvel’s Midnight Suns was particularly noted like a commercial flop, according to Bloomberg‘s Jason Schreier. Zelnick reportedly told Schreier the timing of the release might have been to blame, but regardless, they 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, unhealthy, and the Undead.’ Future packs starring Marvel heroes Morbius, Venom, and Storm could 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 video game universe, it exceeded every expectation placed upon it, and it adapts the very best of Firaxis’ strategy mechanics into an enthralling supernatural tale. It certainly deserves a lot more than as being a footnote in Take-Two’s latest financials.
We’ll likely learn more concerning the company’s plans within the coming weeks, as it turns its focus on cost reduction measures and people coveted ‘efficiencies’. Our thoughts are with those who may be influenced by the upcoming round of employee lay-offs.
