Take-Two Struggles to Stay in the Game
While most video-game makers are enjoying strong holiday sales, the maker of the blockbuster Grand Theft Auto game franchise, Take-Two Interactive (TTWO), is on the sidelines, struggling to stay afloat.
Take-Two's fate hinges on its much anticipated upcoming game, Grand Theft Auto IV, which had been slated for release in October but now is scheduled to come out early next year. The company said it needs more development time to finish the game.
Grand Theft Auto IV is expected to take the action-adventure theme of the series to the next level and has gathered tremendous buzz among gaming enthusiasts.
But the delay in the mega game's release has hurt Take-Two financially as it burns through cash and attempts to cut costs by restructuring its operations.Take-Two had $61.62 million in cash at the end of July, down from $138.15 million at the end of January. Last month in a filing with the U.S. Securities and Exchange Commission, the company disclosed it had increased its five-year revolving credit facility to $140 million from $100 million and secured it using the company's assets in both the U.S. and Europe. With its current burn rate, it could be drawing upon its credit facility in the first quarter by January or February, analysts say. That would make the timely release of Grand Theft Auto IV critical to the company's survival.
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