Greetings, and welcome to the Take-Two Fourth Quarter Fiscal Year 2021 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note this conference is being recorded. I will now turn the conference over to your host, Nicole Shevins, Senior Vice President of IR and Corporate Communications. You may begin.

Good afternoon. Thank you for joining our conference call to discuss our results for the fourth quarter and fiscal year 2021 ended March 31, 2021. Today's call will be led by Strauss Zelnick, Take-Two's Chairman and Chief Executive Officer; Karl Slatoff, our President; and Lainie Goldstein, our Chief Financial Officer. We will be available to answer your questions during the Q&A session following our prepared remarks. I'd like to remind everyone that statements made during this call that are not historical facts are considered forward-looking statements under federal securities laws. These forward-looking statements are based on the beliefs of our management as well as assumptions made by and information currently available to us. We have no obligation to update these forward-looking statements. Actual operating results may vary significantly from these forward-looking statements based on a variety of factors. These important factors are described in our filings with the SEC, including the company's most recent annual report on Form 10-K and quarterly report on Form 10-Q, including the risks summarized in the section entitled Risk Factors. I'd also like to note that unless otherwise stated, all numbers we will be discussing today are GAAP and all comparisons are year-over-year. Additional details regarding our actual results and outlook are contained in our press release, including the items that our management uses internally to adjust our GAAP financial results in order to evaluate our operating performance. Our press release also contains a reconciliation of any non-GAAP financial measure to the most comparable GAAP measure. In addition, we have posted to our website a slide deck that visually presents our results and financial outlook. Our press release and filings with the SEC may be obtained from our website at take2games.com. And now I'll turn the call over to Strauss.

Thanks Nicole. Good afternoon and thank you for joining us today. Our strong fourth quarter performance concluded an exceptional year for our organization. We delivered net bookings of approximately $3.6 billion, which grew nearly 20% from fiscal 2020 and were the highest ever in our company's history. On behalf of our entire management team, I'd like to thank all of our colleagues around the world for helping us achieve these results despite such significant unforeseen and prolonged challenges. It's truly a reflection of our collective resilience and singular commitment to excellence. Our thoughts are with those who have been and continue to be affected by COVID-19. We hope that better days and comfort will come to you soon. Throughout the pandemic, our creative teams have delivered consistently superlative entertainment experiences giving players opportunities to have fun in the most difficult of times and stay connected with family and friends through shared experiences. We grew our online communities meaningfully, including new and returning players, which helped drive recurrent consumer spending growth of 48% to reach a record high and represents 63% of our total net bookings for fiscal 2021. During the year, we enhanced our organization for the long-term. We bolstered the depth of our creative teams by hiring more than 700 new developers, including through the acquisition of several talented studios, which will help us expand our capabilities and grow our business. We also broadened our portfolio of offerings capitalized on diverse business models and made significant investments in our operations and infrastructure. Nearly all of our titles outperformed during the fourth quarter, including NBA 2K21, Grand Theft Auto Online and Grand Theft Auto V, Red Dead Redemption 2 and Red Dead Online and Sid Meier's Civilization VI. The NBA 2K series is known throughout the world for being the…

Thanks, Strauss. I’d like to begin by thanking our teams around the world for delivering a record year for our organization. Since joining Take-Two in 2007, I can’t remember a year during which we were tested more greatly and performed as exceptionally as we did in this past year. Our colleagues' commitment, professionalism, and talent are among the best in our industry, and I could not be prouder of what we have achieved together. In addition, I want to thank our player communities for engaging with our experiences and making our games part of their lives. I’ll now discuss our recent releases. On April 2, 2K and Visual Concepts, once again expanded the breadth and depth of the NBA 2K franchise with the release of NBA 2K21 for Apple Arcade, our first offering for the platform. NBA 2K21 is the most advanced basketball simulation game available on Apple devices, featuring an all-new graphics engine that offers the highest possible resolution, updated rosters and a variety of exciting game modes. NBA 2K21 is currently the most popular game on Apple Arcade. On April 7, 2K and HB Studios released the TravisMathew and PUMA Golf gear update for PGA TOUR 2K21, which keeps players swinging with swag on the cutting edge of modern golf fashion. The TravisMathew Collection includes new polo shirts, hats and shoes, marking the brand's PGA TOUR 2K21 debut, while PUMA Golf introduces an all-new oversized hat and new footwear. On April 8, 2K and Gearbox Software continued to enhance the Borderlands franchise, with the release of the Director’s Cut, the sixth add-on for Borderlands 3. 2K and Gearbox will release two additional vault cards that will become available for owners of the Director’s Cut before the end of calendar 2021 and all players can look forward to returning…

Thanks Karl and good afternoon everyone. Today I'll discuss our fourth quarter and fiscal 2021 results and then review our financial outlook for the full year and first quarter of fiscal 2022. Please note that additional details regarding our actual results and outlook are contained in our press release. As Strauss mentioned, our strong momentum continued into the fourth quarter and we significantly exceeded our net bookings guidance for the fourth quarter and the year. I'd like to thank our talented colleagues around the world for their passion and dedication which has been inspiring especially given the challenges that COVID-19 has presented us with. Starting with our fourth quarter results. Total net bookings grew 8% to $785 million as compared to our outlook of $602 million to $652 million. These outstanding results marked our highest level of fourth quarter net bookings on record. During the period, recurrent consumer spending grew 17% and accounted for 67% of total net bookings, as compared to our outlook of 5% growth. Our outperformance was primarily due to the incredible performance of NBA 2K. Digitally-delivered net bookings grew 8% and accounted for 92% of the total. This result exceeded our outlook of a 10% decline, due to the outperformance of both recurrent consumer spending and digitally-delivered full game sales. During the fourth quarter, 74% of console game sales were delivered digitally, up from 63% last year. GAAP net revenue grew 10% to $839 million, while cost of goods sold decreased to $280 million, including a reversal of expense of $65 million related to forfeitures of previously granted stock awards. Operating expenses increased by 25% to $304 million, driven by higher marketing, research and development and IT expenses, as well as the addition of Playdots. And, GAAP net income grew 78% to $219 million or $1.88…

Thank you, Lainie. We will now take your questions. Operator?

At this time, we will be conducting a question-and-answer session. [Operator Instructions] Our first question is from Mike Ng with Goldman Sachs. Please proceed with your question.

Hey. Good afternoon. Thanks for the question. I just have two. First, I was just wondering if you could offer some thoughts about opportunities you see in user-generated content, creator economies, low code and no code game development. Put simply, with the success of platforms like Roblox that pay independent developers, do you see an opportunity for some of your games to go down that avenue? And then, second, now that we have the release date for the expanded and enhanced version of GTA V and GTA Online, I was just wondering if you could talk a little bit about whether or not you'd expect this to usher in the next seven-year cycle for GTA Online content updates and RCS growth, or is the scope more narrow than that? Thank you very much.

Thanks for your questions. You're right. There's an awful lot of interesting things going on in the world of user-generated content and there have been for some time. And we're open-minded and we want to support the community. At the same time, it's terribly important that we and others protect our intellectual property. So that's the rub. The rub is to find a way to engage consumers on the one hand and enable them to express their interest and even their creative desires in the context of our properties. And there are numerous ways to go about that. And I believe we will explore many of those ways, again, in the context of protecting our intellectual property. With regards to Grand Theft Auto, it may shock you to learn that I'm probably not going to comment much on content to come from Rockstar Games. We're so grateful for the extraordinary results that we've had with all Rockstar titles. And in fact, all titles coming from throughout the organization. Grand Theft Auto Online set another record past fiscal year. We sold in over 145 million. So we're very optimistic about what there is to come, including more content. And stay tuned, because Rockstar Games will be talking more about that in the future.

Great. Thank you for the thoughts, Strauss.

And our next question is from Mario Lu with Barclays. Please proceed with your question.

Great. Thanks for taking the questions. I have one on the full year guide and one on GTA. So the first one on the full year guide, the bookings number when I compare it to fiscal 2019 and 2020 is much higher than what you reported, but non-GAAP EPS guidance is well below those at less than $4. So just hoping if you could help provide any additional color to kind of bridge the booking strength to the EPS guidance. I know you mentioned investments in creative talent and IT, but any additional commentary would be helpful?

It's really what I said in my prepared remarks, it's really coming from the operating expense increases, and those are really being driven by our investment in marketing personnel and IT. Specifically about 55% of the increase in the expenses is coming from increases in direct marketing for our titles. So we're really investing in marketing our new titles this year and also marketing for our fiscal 2023 titles as well.

Okay. That's helpful. Thanks, Lainie. And then just a clarification question on GTA. Excited to play the enhanced version on November 11. So just curious if the exclusion of the PC version simply means there's no additional purchase to play that version, or is it just coming at a later date? Thanks.

We haven't announced anything about a changed PC version.

Okay. Thanks.

And our next question is from Brian Fitzgerald with Wells Fargo. Please proceed with your question.

Thanks guys. Maybe two quick ones. On the Private Division, Outer World's Peril on Gorgon came in February on Switch and then Murder on Eridanos released in the middle of March on the consoles and PCs. It's coming later on Switch. How are you feeling about -- and it released in Steam I think in October. So wondering how you're thinking of that particular franchise and in general, how you feel about the breadth and progress with all the studios you have in private label?

Obviously we're incredibly pleased with Outer Worlds and everything that it's brought. It was -- I can't say that it was a complete surprise out of the gate, but it was certainly was something pleasant for us and a little bit unexpected. The downloadable content has been really very well received and we think the franchise is in outstanding shape at this point. And we will be participating in the franchise and whatever the future holds for that franchise. So we feel really good about it. And we think that it's still building audience and this game itself has a lot of life left in it. And in the future -- we'll see what the future holds for it. But we do think it's a long-term franchise and it is certainly something that we're pleased with the results. In terms of Private Division, we really couldn't be more pleased with the way Private Division is going. As Strauss said, we've already had three titles that have sold in excess of one million units each, which is unusual for independent releases. We have a lot of titles in process. We've got one coming up this year with OlliOlli World. There are a lot of other deals in the pipeline. We've talked about some of them most of them we have not talked about yet and they're varied. There are different scales, different sizes, different shapes, different kinds of experiences which make makes them very exciting. That team is growing, not only from a creative talent perspective in support of Kerbal Space Program, but also from a marketing and publishing perspective. So we expect the best is yet to come from Private Division and we love how we're positioned right now.

Awesome. Thanks, Karl.

And our next question is from Matthew Thornton with Truist Securities. Please proceed with your question.

Hey, good afternoon, Strauss, Karl and Lainie. The comment around sequential growth in fiscal 2023 and the next few years and establishing new records I thought was pretty interesting and sounded very confident for a team that I usually think of as being pretty conservative. So I thought that was very interesting. In that context, can you talk a little bit about how you're thinking about the pipeline given kind of the prolonged stay-at-home COVID impact, tight labor market. Curious just to see how you think you're kind of progressing against those headwinds? Secondly, and somewhat related also just curious your appetite around M&A at this point and just $2.7 billion on the balance sheet at this point, just how that opportunity landscape maybe looks now versus three or six or nine months ago? And then just finally, a quick one on console shortages or tightness this year. I'm just kind of thinking about how impactful that was to your outlook for fiscal 2022 or not. Any color there would be great. Thanks guys.

So thanks for your three questions. In terms of how we're doing despite the pandemic, look the team has just performed so well. We were very fortunate. Our IT group had us fully prepared for a disaster and we could never predict the pandemic, but a week after we had to start working from home, we were all set up remotely and we were highly productive and we stayed highly productive ever since. We had virtually no slippage. The only title that actually moved as a result of the pandemic was Kerbal Space Program 2 which moved out of this fiscal year and we're super excited about that title and it will be coming. The rest of our production stayed on target and the quality has been amazing as you've seen in our results. We are highly confident in our pipeline going forward. As Karl said though the price that we pay for being as transparent about our future pipeline is that certain things will change. We hope that certain things will change to the good, certain things may also disappoint us. At this point in time, we feel very good about the way our production is unfolding and we don't see any concerns on the horizon. With regard to M&A our strategy remains the same. We have a very strong balance sheet. We have the ability to do everything from modest add-on acquisitions. For example, we acquired HB Studios. Two more substantial acquisitions such as the acquisition of Playdots last calendar year, and prior to that the acquisition of Social Point. There's no secret in that we wish to bulk up our mobile offerings. We're certainly trying to do that organically. We have many titles coming from mobile from Social Point and Playdots and 2K. And at the same…

And our next question is from Gerrick Johnson BMO Capital Markets. Please proceed with your question.

Hi. Good afternoon. Thank you. I just want to dig into the marketing spend in the quarter a little bit more up to 30%. It's the highest it's ever been in the fourth quarter with really no major releases coming. So what comprised that? And then a second question on the pipeline update. Just to be clear immersive core versus mid-core et cetera, can you just give us an example of what a mid-core game you have in your portfolio is now so we know how -- what that would look like in the future? Thank you.

So the marketing in Q4 and into next year it's really to support the pipeline of titles that we talked about. It's for our recurrent consumer spending titles and also for our titles going into next year. So we're looking at our head count and the -- a need for our teams to really look at our pipeline in the future. It's become more and more important for us to have the right support around the current titles that are out and the titles -- because it's not just titles that are coming out and releasing they're being supported all throughout their life cycle now. So it's a very different type of marketing than it was in the past where we would just market on release. Now the titles are being marketed all throughout their life cycle. So you'll probably see higher marketing going forward.

Understood. That makes sense. Thank you.

And in terms of just, sort of, some examples around what immersive core versus mid-core would be. I'll start with the mid-core. The mid-core will be something like the WWE 2K Battlegrounds would be a good example of a mid-core game. In terms of immersive core that really is a little more varied, but we do look at it as games that have highly engaging gameplay. People who spend hours and hours and hours at it at a time. So these would be examples things like obviously Grand Theft Auto, Red Dead Redemption Borderlands, but also things like our strategy games from Firaxis and also of our sports simulations.

Perfect. Thanks, Karl.

Our next question is from Doug Creutz with Cowen & and Company. Please proceed with your question.

Hi. Thanks. It's been interesting if you look at Twitch viewership of Grand Theft Auto over the last several months it's really exploded. It's now the most viewed game on Twitch by I think a factor of two over League of Legends. Is this something that the Rockstar teams have been leaning into at all? Has it sort of sparked any discussions about what Grand Theft Auto Online might become or thoughts about maybe the next iteration of it? Because it is a very interesting trend. Thanks.

Yes, unfortunately to answer the question implies some information that we haven't provided and don't expect to provide any time soon. That said, we're gratified by exactly what you talked about which is how popular Grand Theft Auto is on Twitch. We think the Twitch platform is amazing and it's a reflection of the popularity of the title. And Rockstar has said they'll continue to support Grand Theft Online with more content to come.

Okay. Thanks.

Our next question is from Drew Crum with Stifel. Please proceed with your question.

Okay, sir. Thanks. Hey, guys. Good afternoon. Wondered if you'd be willing to discuss your expectations for the GTA 5 franchise in fiscal '22. You typically say this is going to be the year that it declines and you're also lapping looks to be about 15 million units of the full game, but you also have some new content later in the year. So a number of puts and takes here where does that net out? And then separately, Strauss you noted that you've added 700 new developers over the last year. You've turned your investment and creative talent for fiscal '22 is significant. On an organic basis should we assume an uptick in fiscal '22? And I know in the past you guys have noted the scarcity of quality developers. Has that dynamic changed, or is it changing where the labor market is more favorable and conducive to accelerating hiring, or is it more where you are in your content cycle? Thanks.

Yes. Thank you for your question. There is more content coming for Grand Theft Auto Online. And at the same time as we have said in the past, we do expect recurrent consumer spending to moderate in the year. And we'll see how that unfolds. Title has been around for a very long time. And at some time generally speaking, there is moderation. We've been so fortunate to have had another record year this past year, but it was an awfully unusual year.

And in terms of development capacity, we have been investing for years in our development capacity and both from organic hires and also through acquisition. And we fully expect that that will continue into the future. And it is our plan. We have it baked into our plan to bring on more developers. And again we have -- you're right. Labor markets do get -- they do tighten up. These folks are highly sought after. But we have a really strong track record of attracting and retaining the best talent in the industry. And part of that reason is because we provide a creative environment where these folks can flourish. And then we compensate them well in success and we align that conversation with our shareholders. And we think that's a recipe that works really, really well. And people love coming to take to across all of our labels because that culture permeates the entire organization. So it is tough to hire and retain key talent. But that is what we do. And that's the most important strategic advantage I think that we have as a company and that's where we focus.

Okay. Thank you, guys.

And our next question is from Brian Nowak with Morgan Stanley. Please proceed with your question.

Thanks for taking my question. I wanted to ask just about marketing a little bit and landing maybe go back to one of your earlier answers. So the first one is on, now that you've brought on so many new users in the ecosystem throughout shelter-in. I'd be curious to hear about learnings you've had of how you're going to have higher marketing efficiency from all the user data and ways in which you've actually exposed more people to your brands and to your great games? Then the second one just to sort of go back to that comment you made about 55% of OpEx being tied to marketing, more recurring marketing spend for the titles. So are you saying that you think the marketing intensity for your games is actually going to go up going forward, or are you more saying that you're spending ahead of new releases to kind of bring new users? And what are you sort of intimating about higher spend even with older games?

So I'll take the first part. You're right, there are a ton more users in our ecosystem and that's just -- and not only just a number of users, but they're more engaged. So every time somebody is engaging with one of our games, we've got more data points. And the more data points that we have, the more information that we have to know what consumers want, when they want it, what kind of offers are going to make sense for them, when -- to make sure that we give the consumer exactly what they're looking for. So the bigger that database and the stronger analytics capabilities get and we've invested significantly in those kinds of resources not just tech, but also human beings. People who really -- data scientists who know how to analyze this data. And we -- in my opinion, we're just scratching the surface. We're pretty good at it, but I think there's a lot of room for us to get a lot better. And the bigger that database gets and the more information we get and the more we invest, it has just been returning our investment tenfold. So we expect that to continue this year and well into the future.

And when it comes to what I was saying about the 55% of the increase of the OpEx this year was for direct marketing that's because we have a lot of new releases in this year. So when we have new releases, we tend to have big campaigns around the newer releases. So since we have more new releases this year that's why we would have more marketing this year. And our marketing is very efficient around our titles. We also have a lot of marketing around our mobile titles. So we have a big portfolio of mobile titles as well and mobile titles coming out. So that's also been driving our marketing spend as well.

Perfect. Very clear. Thank you, this is mobile. Thank you very much for that.

Our next question is from Eric Handler with MKM Partners. Please proceed with your question.

Good afternoon. Thank you for the question. Wondering if you just could drill down on your mobile business a little bit, since it is the fastest-growing segment within -- in the community space. I'm curious is all your mobile development currently within PlayDots and Social Point, or do you have studios within Rockstar and 2K that are also working on the mobile -- on their own mobile games?

We have work going on throughout the organization. Obviously, Social Point and PlayDots are dedicated to mobile experiences both mid-core and casual. We have some mobile titles at 2K as well. In fact, one of our biggest titles is their WWE SuperCard and we have ongoing development throughout, some of which is announced, some of which is not yet.

Okay. And just as a follow-up, the term metaverse has been used a lot in the last three to five months or so. And when you think about all of the people that are playing GTA Online and GTA V, but also Red Dead Online. How are you thinking five years plus down the road in aggregating this pool of players and thinking about how you can create a bigger type of platform experience for them?

We're going to create bigger experiences by encouraging our creative folks as always to pursue their passions and to always think of that thing that no one thought of before, which is why our strategy is to be the most creative, the most innovative and the most efficient company in the entertainment business. I'm always allergic to buzzwords. The buzzword of virtual reality didn't get this industry very far. AR has not really improved matters, either 3D hasn't really done much for us. What moves the dial in our business is amazing creativity, great characters, great stories, great graphics, great gameplay, the ability to enjoy those experiences with other people all around the world. That's what really matters. I think what the metaverse implies is what we already do with Grand Theft Auto Online and with what Red Dead Online what we do with NBA 2K, and what we aim to do with some upcoming titles an opportunity to exist in that fictional world and express yourself in ways that are challenging, fun, competitive and new and find ourselves in places doing things that we can't really do usually in the real world. I think that's what it means. I think when you get into conversations around -- are people going to do conference calls in titles? Well, the answer is they can now. But who -- we're not -- like we could, I guess do this conference call inside one of our titles, but it's a bit more efficient to do it this way. So the problem I have is that if you take metaverse SPAC and cryptocurrency put them all together in five years will any of this matter? I'm not sure it will.

Thanks Strauss.

[Operator Instructions] And our next question is with Benjamin Black with Evercore ISI. Please proceed with your question.

Great. Thank you for the question. I just have one on Apple Arcade. Curious to hear your takeaway so far on NBA 2K21, has it had positive implications for game sales elsewhere on the platforms. I know you, obviously, support many platforms, but how do you frame the opportunity set for potentially publishing more gains on Arcade? Thank you.

Yeah. As I said in my remarks, we're very happy how NBA is doing on Apple Arcade. It's the most popular game on the service right now. So we can't ask for anything more than that. It's still pretty early ultimately. So is it having a huge impact on selling games across other platforms, hard to tell at this point. Do we think that that certainly is a possibility? I think absolutely because every time you get people exposed to the game through new platforms or platforms where they otherwise may not have exposure to it that's a positive thing from a marketing perspective. So stay tuned on that.

Thank you.

Our next question is with Stephen Ju with Credit Suisse. Please proceed with your question.

Thank you. So Strauss, I think, I heard Lainie say that I think the forward guidance parameter is baked in, I think 80% of sales of gains I think coming from download. So now that brick-and-mortar retail has completely de-indexed as a relative contributor to your business over the last console cycle. I remember when it was agreeing to have it be greater than 50% and match where the PC industry is today in terms of the mix. So do you think this opens up the possibility for you to be more experimental with your pricing, particularly for those titles outside the core Rockstar and the 2K property, especially as you think about expanding potential audience, particularly now that there is really a greater ability to monetize those users with recurrent consumer spend? Thanks.

I think it's a really excellent point, and I think you're right. There is a bit more flexibility when you can move quickly and you don't have to worry about stock that you shipped in or price protection for example, which can be costly. Undoubtedly we can move more -- with more agility in terms of promotions, so I think there's a benefit. But of course that benefit is swamped by the simple benefit that our margins are much higher with regard to digital distribution and physical. That's the big difference. And I think the other difference, which we haven't really talked about, but it was obviously something that's going on in the market right now is we expect that the cost of distribution will decline for any number of reasons and that also will go directly to the bottom line.

Thank you.

Our next question is with Andrew Marok with Raymond James. Please proceed with your question.

Hi. Thanks for taking my questions. So with another great quarter in NBA 2K in the fourth quarter and as the pandemic engagement surge starts to level out a bit, and pardon me for mixing my sports metaphors here. But what inning are we in for monetization of the existing NBA player base? And how much of the franchise's growth, comes from audience expansion? Thanks.

Thanks for the question. We get that question a lot. And it's tough to answer because every time, our perspective seems to change. My answer is, I feel like, we're in the early innings. I'm not going to give you an exact inning. We're certainly not in the seventh inning stretch. And we're not in the first inning. It's somewhere in between. But I do think like, I mentioned before, our analytics capabilities are getting much more sophisticated. And not to mention, we do have -- we have a lot of modes, in our NBA game. And we have different ways for people to engage. And therefore, we have different ways for it to monetize in those modes. And just getting people to play, people more deeply engage in the game and play across those modes, there's a lot of opportunity right there in and of itself. So we're not just stuck to one type of monetization for card packs, et cetera like that. We've got a lot of other opportunities. So that and also the fact that, we've still got a long way to go in terms of mastering our analytics capabilities, makes me believe we're pretty early.

Got it. Thank you.

And our next question is from Mike Hickey with The Benchmark Company. Please proceed with your question.

Thanks, Strauss, Karl, Lainie and Nicole thanks for taking my question guys and congratulations on a great quarter. Strauss just curious this maybe sensitive, but wondering on your view on sort of the Epic Apple Live debate on revenue share. And if you think that, this could encourage maybe structural teams into digital stores mobile and console, when you think about revenue share and competition similar to what we've seen on PC?

Yeah. I think I alluded to that, in my last remark Mike. So I think we're on the same wavelength. I do believe that, distribution costs will decline. Of course, I can't opine, specifically, on that action, because I don't have any particular insight. However, between regulatory authorities investigations and private concerns clearly take rates are being examined. But at the end of the day, it's the economy that governs. And we are in a broadly competitive distribution environment. And the goal of this organization has always been and remains be, where the consumer is, which means we'll employ, a broad array of distribution platforms including our own direct-to-consumer platform. And what that means overtime is, it's going to be hard to have a take rate for distributors that is economically too high. That leads to an unstable system. And that's what you're seeing now in my opinion. I think this will be resolved relatively soon. And it will be resolved in a favorable way. And I think that take rates will decline meaningfully. And that will of course benefit us. It's not in any of our guidance, but it is in my expectations. Of course, we don't organize the company around my expectations. But you asked my opinion. And so I shared it.

Okay. Thanks guys. Good luck.

And we have reached the end of the question-and-answer session. And I'll now turn the call over to Chairman and CEO, Strauss Zelnick, for closing remarks.

First of all, I want to thank all of our colleagues, all around the world, nearly 7,000 people for these amazing results. Imagine, if you will, the extraordinary work and commitment it has taken to deliver in these difficult times. And our team has just been stellar and has been smiling the whole time, despite the challenges and the privations. And in certain instances, tragedies as well which I know many of you have had also. So thank you, from the bottom of our collective hearts. And at the same time, we're so optimistic going forward. We're in a better place, than we've ever been in before. And we're in a pretty good place now. We're incredibly excited about the upcoming products. We work in an organization, where we love to show up every day. And we're blessed, to be able to do so, with great colleagues all around the world. So thank you, to our colleagues. Thank you, to our shareholders for your support. And thank you all for joining us today.

And this concludes today's conference. And you may disconnect your lines at this time. Thank you for your participation.