Benzinga - by Franca Quarneti, Benzinga Staff Writer.
During Take-Two Interactive Software Inc's (NASDAQ: TTWO) earnings call, CEO Strauss Zelnick addressed concerns about a potential strike by SAG-AFTRA video game actors impacting the upcoming Grand Theft Auto (GTA) 6 release.
Negotiations will turn out "just fine," Zelnick predicts, according to IGN "We're optimistic. We value all of our talent greatly. We value excellent labor relations, and we're looking forward to reaching an agreement that serves everyone well."
Take-Two is "completely protected" in case the negotiations, which are expected to resume next week, do not result in a favorable agreement, he added.
A potential strike by SAG-AFTRA video game actors could impact major gaming companies, including Take-Two, Activision Blizzard Inc (NASDAQ: ATVI), Electronic Arts Inc (NASDAQ: EA), Sony Group Corp.'s (NYSE: SONY) Insomniac, and Warner Bros. Discovery Inc's (NASDAQ: WBD) WB Games.
Negotiations with the union involve concerns such as protections against artificial intelligence (AI) replacement, pay increases to match inflation, and mandatory breaks and set medics for on-camera performers.
Zelnick's confidence that a strike wouldn't affect GTA 6 hints that voice performances may already be recorded and that the game could be nearing completion.
The long-anticipated sequel to GTA 5 is expected to release next year, with the first trailer scheduled for early December. Take-Two's financial outlook further suggests a potential release date in the coming year.
Financials And Strategic Positioning Cost-cutting measures implemented earlier in the year exceeded targets, Zelnick noted. The company now feels good about its current structure.
"We've already gotten through the right-sizing we felt we needed to do, and we expect to be in growth mode going forward," he said, citing the company's financial performance and total net bookings of $1.44 billion in the last quarter.
"Grand Theft Auto 5" and "Red Dead Redemption 2" continue to be strong performers.
In addition, the anticipation for GTA 6 is a key factor in the company's positive outlook, with Take-Two teasing a "highly anticipated year" in fiscal 2025.
Zelnick acknowledged the industry-wide layoffs but explained that Take-Two anticipated the post-pandemic demand shift and is well-positioned with its current headcount.
"I do think people got a little fat and happy during the pandemic. I think there was a perception on the part of many that the music would never stop. That wasn't our perception," he added.
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