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Max Payne 3

Platform(s): PC, PlayStation 3, Xbox 360
Genre: Action
Publisher: Take-Two
Developer: Rockstar Games
Release Date: May 29, 2012 (US), June 1, 2012 (EU)

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'Max Payne 3' (ALL) Delayed Until Late 2010

by Rainier on Dec. 3, 2009 @ 2:55 p.m. PST

Max Payne 3 tells the story of a retired police detective embroiled in a world of corruption, turmoil and intense violence.

Take-Two anticipates that its results for the fourth quarter and fiscal year 2009 will be below its prior guidance due to several factors, the largest being the performance of its Major League Baseball® titles in the fourth quarter, which reduced earnings by approximately $0.09 per share, along with an impairment of capitalized software based on sales estimates for its MLB titles in fiscal 2010, representing approximately $0.05 per share. The Company also incurred inventory write downs in its distribution business primarily related to prior generation software, representing approximately $0.07 per share, and realized lower than expected initial performance of several of its key holiday releases.

Additionally, on a GAAP basis, Take-Two expects to record non-cash impairment charges of up to approximately $15 million on its distribution segment (equivalent to $0.19 per share in the fourth quarter and $0.20 per share for the full fiscal year 2009), in connection with the Company’s annual assessment of goodwill. These amounts are excluded from the estimated fourth quarter and fiscal year non-GAAP EPS provided in the chart below.

Based on preliminary estimates, the Company is providing revised guidance as follows:


Fourth quarter ended


Fiscal year ended


 $325 to $350 million $950 to $975 million
Non-GAAP EPS (a) 

$0.05 to $0.10

 $(1.10) to $(1.15)

Stock-based compensation
expense per share (a)(b)

 $0.13 $0.34

Expenses related to unusual
legal matters per share (a)

 $0.00 $0.09

Goodwill impairment charge
on distribution segment
per share (a)






(a) Non-GAAP earnings (loss) per share excludes certain non-recurring or non-cash items and should be considered in addition to results prepared in accordance with GAAP. Stock-based compensation expense, expenses related to unusual legal matters, and goodwill impairment charge are not included in the non-GAAP EPS provided above. GAAP EPS can be calculated by reducing non-GAAP EPS provided above by these expenses. Non-GAAP EPS is not intended to be considered in isolation from, as a substitute for, or superior to, GAAP EPS, and may be different from similarly titled measures used by other companies. The Company believes that non-GAAP financial measures, when taken into consideration with the corresponding GAAP financial measures, are important in gaining an understanding of the Company's ongoing business. Non-GAAP financial measures also provide for comparative results from period to period.

(b) The Company's stock-based compensation expense for the fourth quarter and fiscal year 2009 includes the cost of approximately 2 million stock options and 1.5 million shares previously issued to ZelnickMedia that are subject to variable accounting. Actual expense to be recorded in connection with these options and shares is dependent upon several factors, including future changes in Take-Two's stock price.

First Quarter and Fiscal Year 2010

Take-Two is also providing an initial outlook into its fiscal first quarter ending January 31, 2010 and fiscal year ending October 31, 2010. The Company expects to report a non-GAAP net loss per share for fiscal 2010 in the range of $0.40 to $0.60 on $1.0 billion to $1.2 billion in revenue. Take-Two’s preliminary forecast for the fiscal first quarter is for a non-GAAP net loss per share in the range of $0.40 to $0.50 on $210 million to $260 million in revenue.

The Company’s expected fiscal 2010 results primarily reflect the movement of one triple-A title out of the fiscal year; a non-GAAP net loss from the Company’s Major League Baseball business in the range of $30 million to $35 million, or $0.38 to $0.44 per share; higher development costs for certain titles; as well as the impact of the continued difficult retail environment.

Take-Two noted that it has a strong pipeline of titles that remain on plan for launch in 2010, including BioShock 2, Mafia II, Max Payne 3 and Red Dead Redemption. BioShock 2 is on target for a global release on February 9, 2010, and Red Dead Redemption is planned for April 27, 2010. Mafia II is scheduled to follow during the first half of calendar 2010, and Max Payne 3 is now planned for release during the fourth quarter of fiscal 2010.

Management Comments

Strauss Zelnick, Chairman of Take-Two, stated, “Our anticipated results for the balance of fiscal 2009 primarily reflect the challenges related to our Major League Baseball business, inventory write downs in our distribution business, and retail conditions that have proven to be more difficult than the assumptions built into our prior outlook. These factors were partially offset by the performance of our catalog business and a number of our holiday titles, as shown by the successful launch of Borderlands and the leading ratings and market share of NBA 2K10. Looking ahead, we remain committed to our goal of operating profitably on a non-GAAP basis; however, we do not currently expect to achieve that goal in fiscal 2010. We have an outstanding product portfolio, exceptional creative talent and a solid balance sheet, and are confident that these strengths will provide a sound foundation for improved performance.”

Ben Feder, Chief Executive Officer of Take-Two, commented, “We continue to pursue a strategy of building a select, diverse portfolio of top quality titles and to invest our resources in the most promising products and most compelling market opportunities. The industry is a hits-driven business, and our creative and financial resources are dedicated to making great games. Our focus going forward will be on executing better on this strategy in order to drive improved results. Toward that end, we are continuing to work on maximizing the efficiency of our development process and exploring additional ways to reduce costs throughout our organization while maintaining the investment required for future growth.”

Key assumptions and dependencies underlying the Company’s guidance include continued consumer acceptance of the Xbox 360® video game and entertainment system from Microsoft, PlayStation®3 computer entertainment system and Wii™ home video game system from Nintendo; the ability to develop and publish products that capture market share for these current generation systems while continuing to leverage opportunities on certain prior generation platforms; as well as the timely delivery of titles.

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