While the conviction that Take-Two is still in play could still be motivating some investor interest in the stock, the likelihood of any sort of deal has been dimmed by the recent drop in game software sales. The sharp decline has demonstrated that the industry is nowhere near as recession resistant as many had hoped. According to research firm NPD, total U.S. video game sales fell by 17% in March, surprising many analysts who had expected a flat year-over-year comparison.
Take-Two’s recent reported quarterly loss and sharply lower guidance for the current quarter confirm that it too has been stung by the ongoing bout of consumer belt-tightening. While the fiscal second-quarter net loss of 4 cents a share was less than the expected 13 cent a share loss, this quarter’s expected loss of between 55 to 65 cents a share would be much worse than the 2 cent a share loss analysts had predicted.
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