Shares of video game maker Take-Two Interactive ( TTWO) slipped in extended trading Tuesday, after the company forecast a weaker than expected second quarter. Buoyed by Tuesday's broader advance in tech stocks, Take-Two's shares closed at $6.85 Tuesday, a hike of 13.98%, but slipped 15 cents, or 2.19% after the bell. The New York-based firm reported its first-quarter results after market close Tuesday, highlighting the challenges of selling games in a tough economy. Take-Two, which sells the popular Grand Theft Auto family of games, expects second-quarter revenue between $200 million and $220 million, well below analysts' estimate of $263.72 million. The firm also expects an adjusted loss of between 10 cents to 20 cents a share, compared to the street's anticipated earnings of 4 cents a share. "Looking to the balance of the year, the economy remains challenging and uncertain, and our industry will not be immune to this environment," said Strauss Zelnick, the Take-Two chairman, in a statement. "Consumers will continue to be highly selective in their purchases, including interactive entertainment." The company at least beat analysts' first-quarter sales projection, posting revenue of $256.8 million, up from $240.4 million in the same period last year. Analysts were expecting revenue of $210.5 million. Take-Two nonetheless saw its first-quarter losses widen as a result of higher marketing, legal and R&D expenses. The firm posted a net loss of $50.4 million, or 66 cents a share, compared to a loss of $38 million, or 52 cents a share, in the same period last year.
Excluding charges, Take-Two posted a loss of $39.3 million, or 52 cents a share, compared to $30.3 million, or 41 cents a share, in the first quarter of 2008. The Street was expecting a loss of 73 cents a share. Take-Two, which competes with Activision Blizzard ( ATVI) and Electronic Arts ( ERTS), is less vulnerable to the seasonality of the video game sector, making its first-quarter results less crucial to the company. Whereas most of Take-Two's rivals look to the holiday season for their biggest sales hike, most of the firm's revenue comes from new versions of the iconic Grand Theft Auto series. Sales of Grand Theft Auto IV helped drive first-quarter revenue, according to Take-Two, and 13 million copies of the game had been sold by the end of January. More than 4 million copies of the Carnival Games franchise, including Carnival Games for Nintendo's Wii and DS systems, have also been sold to date, the firm said.