Greetings, and welcome to Take 2 First Quarter Fiscal Year 2021 Earnings Conference Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr.
Hank Diamond. Thank you. You may begin.
Good afternoon. Welcome and thank you for joining Take 2's conference call to discuss its results for the first quarter of fiscal year 2021 ended June 30 2020. Today's call will be led by Strauss Zelnick, Take 2's Chairman and Chief Executive Officer, Carl Sladoff, our President and Lainie Goldstein, our Chief Financial Officer. We will be available to answer your question session following our prepared remarks. Before we begin, I'd like to remind everyone that statements made during this call that are not historical facts 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 internally to adjust our GAAP financial results in order to evaluate our operating performance.
Our press release also contains comparable GAAP measure. In addition, we have posted to our website a slide deck that visually presents Our press release and filings with the SEC may be obtained from our website at www.take2guines.com. And now, I'll turn the call over to Strauss.
Thanks, Hank. Good afternoon, and thank you for joining us today. I'd like to start by expressing on behalf of our entire management team, Our deepest sympathies for those who've been and continue to be affected by this pandemic. We're immensely grateful to everyone who serves on the frontline caring for people in need and helping the world navigate this crisis. First quarter operating results that significantly exceeded our expectations, including fiscal first quarter records for GAAP net revenue and net bookings.
Our outstanding results were driven by the Red Dead Redemption 2 and Red Dead Online and Social Point's mobile games. I remain incredibly proud of our entire organization, which exemplifies our core during these challenging times. In the first quarter, NBA 2k20 significantly outperformed expectations. And recently achieved a franchise milestone of $1,000,000,000 in net bookings since launch. Consumer engagement with NBA 2k continues to increase.
With daily active users growing 82%, my career users growing 78% and my team users up a remarkable 108% as compared to the first quarter last year. Recurrent consumer spending in NBA 2K grew 120 6 percent to a new record, and remained the largest contributor to that part of our business. To date, NBA 2k20 has sold in over 14,000,000 units, up over 18% compared with MBA 2k19 in the same time frame. We expect that lifetime units, recurrent consumer spending, and net bookings for NBA 2k20, will be the highest ever expectations. The title is now sold in nearly 135,000,000 units and remains the standard bearer of the current console generation.
In addition, recurrent consumer spending on Grand Theft Auto Online outperformed our forecast, growing 155 percent to a new record. In April, Rockstar Games released Gerald Last Play, a series of 6 new contact missions for Grand Theft Auto Online. The first quarter was the 2nd best period ever for new player acquisitions since the title's launch in 2013. The unprecedented player volume trends that started with the superlative performance of the Diamond Casino And Resort update in July 2 2019 and drove record average multiplayer MAUs through August 2019. Pursistent with sequential records, in average multi player MAUs from December 2019 through May 2020.
We now expect Grand Theft Auto Online to establish a new net bookings record in fiscal 2021. In addition, the partnership with Epic Game Store, where Grand Theft Auto 5 was offered free for a week in mid May, was a contributing factor to the strong performance of Grand Theft Auto Online and did not come at the expense of paid sales of the title. In fact, Grand Theft Auto5 sold through more units in the period than any first quarter since the title's launch in 2013. And in the 6 weeks following the Epic Store promotion, Gran Theft Auto5 sold more units than in the same period in any previous year. Red Dead Redemption II also outperformed and to date has sold in more than 32,000,000 units worldwide.
The title sold through twice as many units compared to last year. Engagement with and recurrent consumer spending on Red Dead Online continues to increase. The title acquired nearly twice as many users year over year, and average multi player MAUs grew 50%. Net bookings from Red Dead Online surpassed expectations growing 118% excluding digital content bundled with the Red Dead Redemption 2 premium additions. During the first quarter, Rockstar Games added new content to Red Dead Online, including 6 new maps a showdown mode.
Through the coming year, Rockstar Games will continue to support both Red Dead Online and Grand Theft Auto Online with more content updates keep new and returning players excited and engaged. Borderlands 3 continues to expand its audience since to date has sold in over 10,500,000 units worldwide, up 69% over border lands to in the same period. During the first quarter, 2K and gearbox launch bounty of Blood, the 3rd of 4 announced paid campaigns are included in the Borderlands 3 Super deluxe edition and the season pass. Or are available for purchase separately upon release. The season pass attach rate for Borderlands 3 continues to be the highest in 2 case history, and there's more content coming.
In the period, MAUs grew as sales continued at a steady pace with the consistent release of free and pay content. We attribute this ongoing success in part to 2 Ks and Gearbox Software's continued efforts to support Borderlands 3 as a live service game should continue to benefit the title in quarter and is now sold in 2,800,000 units. On June 5, the title was released for Nintendo Switch. In addition, private division launch this integration, a new sci fi first person shooter experience that blends real time tactical elements for PlayStation 4, Xbox 1, and PC. During the first quarter, 2K released mafia 2 definitive edition and mafia 3 definitive edition as part of the mafia trilogy, which combines all 3 previously released mafia titles into a single package for PlayStation 4, Xbox 1 and PC, curated by 2 Ks Hanger13studio.
Mafia 1 definitive edition will become available on September 25th, as Carl will discuss shortly. 2K also bolstered our offerings for Nintendo Switch with some of our most beloved and successful franchises, including BioShock Collection, the Borderlands's legendary collection and the Excom 2 collection. In addition, 2K and Firaxis games released Excom ChimaraSquad an all new standalone title in the award winning turn based XCOM series for PC. Our first quarter results were also enhanced by a variety of other offerings, led by Social Point, Sid Meier's Civilization VI, and the WWE series. During the first quarter, recurrent consumer spending exceeded expectations, growing 127% to a new record and accounted for 60 was enhanced by the following offerings.
In the free to play category, Social Point outperformed expectations, growing 54% to a fiscal first quarter record driven primarily by the exceptional performance of its 2 biggest games: Dragon City And Monster Legends. The studio continues to invest in its broad and innovative pipe of more than 10 new games planned for launch in the coming years. WWE SuperCard also outperformed during the first quarter, growing 54%. The title has now been downloaded more than 21,000,000 times and remains 2K's highest grossing mobile title. And NBA 2K Online in China remains a significant attributor to our results.
The title is the number one PC online sports game in China with nearly 50,000,000 registered users. Add on content grew 135 percent and outperformed expectations led by offerings for the borderlands franchise, Sid Meier's Civilization VI, PENXCOM2. As a result of our outperformance in the first quarter, along with a higher forecast for the balance of the year, we're raising our outlook for fiscal 2021 is well underway to be another great year for Take 2. Looking ahead, our company has the strongest development pipeline in its history, including sequels from our biggest franchises as well as exciting new IP. We've made great strides to increase the scale of our enterprise and our current pipeline is more than double what it was 5 years ago in terms of number of games, including 54% internally developed titles, and 46% externally developed titles.
In closing, we continue to prepare for our industry's forthcoming transition to a new console cycle which will provide our world class development teams with a better platform on which to captivate and engage our audiences. Our company remains superbly positioned. Creatively operationally and financially to capitalize on the many positive trends in our industry and to deliver returns for our shareholders over the long term. I'll now turn the call over to Carl.
Thanks, Strauss. I'd like to begin by thanking our teams for delivering an excellent start to the year. The work being accomplished across our company is a shining example of what can be achieved through our culture collaboration, which is more important than ever during these challenging times. I'll now discuss our recent and upcoming releases. On July 1, Private Division, in partnership with the European Space Agency, launched a new update for Kerbal Space Program for PC entitled Shared Horizons.
The update, which will also be available later this year on consoles, celebrates ESAs outstanding contribution to space exploration and is free for all players of the critically acclaimed physics based space simulation game. In addition, Private Division's new development studio intercept games remains hard at work on Kerbal Space Program 2, which is expected to launch in the fall of 20 21. On July 23, Proraxis Games released Ethiopia pack as part of their bimonthly release of 6 downloadable content packs for the all new Sid Meier Civilization VI new frontier pass for PlayStation 4 Xbox 1, Nintendo Switch and PC. Later this year, the new Frontier Pass will come to mobile platforms, and each pack will also be available for individual purchase. On July 28, Rockstar Games released the naturalist, a massive new update to Red Dead Online featuring a new frontier pursuit that will introduce players to the secrets of naturalism as part of an all new role, plus a new outlet that will pass tons of community requested features and fixes and much more to play and discover in months to come.
Launch day for the naturalist was Red Dead Online's best day ever outside of the holiday period and the update continues to perform very well. On August 21, 2K will release PGA Tour 2K21 for PlayStation 4, Xbox 1, Nintendo Switch, PC, and Stadia. Developed by HB Studios, PGA Tour 2K21 will feature PGA Professional, Justin Thomas, on the cover, officially licensed pro players courses and gear, realistic course scanning, play by play commentary by Luke Elby and RichBeam, a new PGA tour career mode, online and local multiplayer, course and player customization and online societies. On September 24, 2K will release the next annual offering from our flagship NBA 2K series for PlayStation 4, Xbox 1, Nintendo Switch, PC, and Stadia, with extensive improvements, best in class graphics and gameplay, competitive and community online features, and deep vary game modes, NBA 2k21 will offer a one of a kind immersion into all facets of NBA, basketball and culture. In addition, NBA 2k21 will launch this holiday season for next generation platforms, providing unparalleled graphics and loading speeds and will once again redefine the standards for sports simulations.
A 5 time NBA All Star important trailblazer standout Damien Lillard be on the cover for the current generation versions of NBA 2k21 and the 2019 first overall pick and consensus national college player of the year Zion Williamson of the New Orleans Pelican will be on the cover for the PlayStation 5 and Xbox Series X releases. NBA 2K211 went through several initiatives to bridge the 2 console generations of the game, including my team, cross progression and a shared VC wallet within the same console families. In addition, NBA legend Kobi Brian's lifetime achievement of basketball excellence will be celebrated with the NBA 2k21 Mamba forever edition, which will provide players with seamless us to both current and next generation versions of the game. On September 9, private vision will release peril on Gorgon, the first narrative expansion for the award winning RPG, the Outer Worlds from Obsidian Entertainment. In this expansion, players will discover a lawless den of Monsters and Marauders on the Gorgon asteroid and uncover a mystery that will change the Halcyon colony forever.
Payroll on Oregon is the first of 2 narrative expansions that can be purchased individually or bugled at a discount in the Outer Worlds expansion pass. On September 18th, 2 cable released WWE 2K battlegrounds, a completely new WWE gaming experience, will feature arcade style brawling action for PlayStation 4, Xbox 1, Nintendo Switch, PC, and Stadia. Featuring a roster of more than 70 WWE superstars and legends at launch with additional superstars to be released thereafter. WW 2K battlegrounds is now available for pre order and digital formats and the participating retailers. On September 25th, 2 cable released mafia 1 definitive edition for PlayStation 4, Xbox 1, and TC in the mafia trilogy collection.
Which features all three previously released mafia titles. For the trilogy, mafia 1 is being completely remade from the ground up. Including new technology, voice acting, game mechanics, and more. In the coming weeks, 2K and gearbox will have more to share on their upcoming content releases to support and further expand the audience for Borderlands 3. Rockstar also announced an upcoming summer update to Grand Theft Auto Online, and both Grand Theft Auto Online and Red Dead Online will receive major updates later this fiscal year featuring an extension to existing frontier pursuits for Red Dead Online, as well as Grand Theft Auto Online's biggest update ever featuring a new take on HEIGHTS in a new location.
Throughout fiscal 2021, we will continue to support our titles with innovative post launch content that derives engagement and recurrent consumer spending. In addition, Social Point and 2K will continue to broaden our offerings for mobile devices. Looking ahead to fiscal year 2022, Rockstar Games also announced that they will bring their beloved and iconic Rent Theft Auto V to the next generation of consoles in the second half of calendar twenty twenty The new generation versions of the game will feature a range of technical improvements, visual upgrades, and performance enhancements to take full advantage of the latest hardware, Making the generation consoles with more new updates, including additional content exclusive to the new consoles and PC. There will also be a new standalone version of Grand Theft Auto Online coming in the second half of calendar twenty twenty one, which will be available for free exclusively for PlayStation 5 players during the 1st 3 months. Rockstar Games will share more details on the new versions of Grand Theft Auto5 in the months ahead.
Last week, private division announced the signing of 3 new publishing arrangements agreements with top independent developers, Moon Studios, League of Geeks and Rule 7. These partnerships will expand the label's portfolio of titles that includes Kerple Space Program franchise, the Outer Worlds, ancestors to humankind Odyssey and disintegration. Moon Studios founded in 2010 by Thomas Mueller, and Ganati Coral as a Basa award winning studio, best known for developing the critically acclaimed Ori and the Blind Forest and Ori and the Will of the WISPs. Moon Studios is working on creating a compelling new action RPG. League of Geeks, founded in 2011 by Trent Custers, Blake Mitssey and Ty Carey, are renowned for developing the PC game Armelo, which combines deep tactical card play, rich tabletop strategy and RPG elements located in Melbourne, Lead of Geeks is looking to expand upon its initial success with an ambitious new intellectual property.
Roll 7 is a BAFTA multi award winning independent studio founded in London in 2008 by Simon Bennett, John Rivens and Tom Hagerty. Roll 7 created the Ollie Ali series, not a hero and laser league. They are working with Private Division on the next jump forward in their mission to create awesome low state games. The first of these titles is expected to launch in fiscal 2022. Also last week, 2K announced a partnership with 1 team partners and the National Football League Players Association that will allow the label to include the names, numbers, images, and likenesses for over 2000 current NFL players in multiple non simulation football games that are currently in development and set to launch starting in calendar year 2021, during fiscal 2022.
We are thrilled to be back in the business with NFL, which is one of the most successful sport brands in the world. We are confident that our forthcoming NFL offerings will be extremely fun, highly engaging and deeply social experiences Turning to Esports, we are very excited about the continued progress and growth of the NBA 2K League, which is currently in its 3rd season. Leek playoffs will run between August 19th 22nd prior to the finals on August 29th. The league has been steadily building its portfolio of high profile partner and sponsorships, including Anheuser Busch, AT and T, Champion Athletic Ware, GameStop, Hyperx, Jostens, Panera Bread, Rainer Gaming, SAP, Scuff Gaming, Snickers, Stands, and Tassow. The NBA 2K league airs live on the league's Twitch channel In addition to select matches, airing live on ESPN 2, ESPN's digital platforms and the NBA 2k league YouTube channel, as well as A multi year agreement, live streams of league games began airing on dash radio's nothing but net channel on the digital network that has more than 12,000,000 1st.
We are very excited about the continued success and growth of the NBA 2K League, which has the long term potential to enhance engagement and to be driver of profits for our company. Strauss mentioned, we have the strongest development pipeline in Take 2's history, well as significant potential to increase engagement and recurrent consumer spending. In addition, we are investing in a number of emerging opportunities that have the potential to enhance our growth rate. We remain focused on delivering Whether expanding our offerings onto new platforms, capitalizing on new business models and distribution channels or increasing our presence in emerging markets, Taytu is exceedingly well positioned to generate value to consumers as well as growth for our shareholders. I'll now turn the call over to Lainie.
Thanks, Carl, and good afternoon, everyone. Today, I'll discuss our first quarter results and then review our financial outlook for the second quarter fiscal year 2021. Please note that additional details regarding our actual results and outlook are contained in our press release. As Strauss mentioned, fiscal 2021 is off to a great start, their first quarter operating results significantly beating our expectations. Net net bookings grew 136 percent to $996,000,000 was a fiscal first quarter record.
This result exceeded our outlook of $800,000,000 to $850,000,000, driven by the exceptional performance through our portfolio led by NBA 2k20, Grand Theft Auto5 and Grand Theft Auto Online, Red Dead Redemption 2 and Red Dead Online and Social Point's mobile games, partially offset by grew 139% as compared to our outlook of 100% growth and accounted for 92% of the total. This result exceeded our outlook, primarily due to the outperformance of recurrent consumer spending. During the first quarter, 77% of sales of current generation console games were delivered digitally, up from 75% last year. Recurring consumer spending grew 127 percent as compared to our outlook of 75% growth and accounted for 65% of total net bookings. This growth was driven primarily by NBA 2k20, Grand Theft Auto Online and Social Point's mobile games.
GAAP net revenue grew 54 percent to $831,000,000, which is the fiscal 1st quarter record and cost of goods sold increased to $477,000,000. Operating expenses increased by 10 percent to $272,000,000 due primarily to our COVID-nineteen charitable initiative headcount expansion and higher incentive compensation as a result of the company's performance. And GAAP net income grew to $89,000,000 or $0.77 per share, as compared to $46,000,000 or $0.41 per share in the first quarter last year. Now to our guidance, starting with the fiscal 2nd quarter. We project net bookings to range from $775,000,000 to $825,000,000 compared to $951,000,000 in the second quarter last year.
Which benefited from the launch of Borderlands 3. Gran Theft Auto Online and Grand Theft Auto V, Red Dead Redemption 2 and Red Dead Online, Borderlands 3, Social Point's mobile games, Sid Meier Civilization VI and the Outer Worlds. We expect digitally delivered net bookings to be flat. Driven by growth in recurrent consumer spending offset by lower digitally delivered sales of Borderlands 3, which launched last year. Our forecast assumes that 63% for current generation console game sales will be delivered digitally, up from 51% last year.
Project recurrent consumer spending to grow by approximately 10%. We expect GAAP net revenue to range from $750,000,000 to $800,000,000 and cost goods sold to range from $355,000,000 to $381,000,000. Operating expenses are expected to range from 2.85 $195,000,000. At the midpoint, this represents an 8% decrease over last year, driven primarily by lower marketing expense. And GAAP net income is expected to range from $98,000,000 to $110,000,000 or $0.85 to $0.95 per share.
For management reporting purposes, we expect our tax rate to be 16% throughout fiscal 2021. Turning to our outlook for the full fiscal year. We are increasing our net bookings outlook range to $2,800,000,000 to $2,900,000,000 from two 0.55 to $2,650,000,000, driven by our outperformance in the first quarter, along with an updated forecast for the balance of the year. We are continuing to see elevated engagement in sales from people sheltering at home, which we have included in the second quarter but have not yet factored into the back half of the year. We expect growth from NBA 2K, Grand Theft Auto Online and Social Point's mobile games to be offset by lower results from Borderlands 3 Red Dead Redemption 2 and Grand Theft Auto V.
Resid Online, excluding digital content bundled with the premium additions, is projected to be approximately flat versus fiscal 2020. The largest contributor to net bookings are expected to be NBA 2K Rant Theft Auto Online and Grand Theft Auto 5, Red Dead Redemption 2 and Red Dead Online, Borderlands 3, Social Point's mobile games, Sidmar civilization 6 and the Outer Worlds. We expect the net bookings breakdown from our labels to be roughly 55% 2K 35% Rockstar Games and 10% private division and social point. And we forecast our geographic net bookings split to be about 60% United States and 40% international. We now project digitally delivered net bookings increased by approximately 3% as compared to our prior outlook of an 8% decline.
This growth is being driven by recurrent consumer spending and digitally delivered sales. As a percentage of our business, digital is projected to represent 87% up from 82% last year. Our forecast assumes that 68% of current generation console game sales will be delivered digitally, up from 55% last year. We now expect recurrent consumer spending to grow by 16% as compared to our prior outlook of flat versus fiscal 2020. And to represent 61% of net bookings as compared to 51% last year.
This growth is being driven by NBA 2K, Grand Theft Auto Online, and Social Point. We are increasing our non GAAP adjusted unrestricted operating cash flow outlook to more than $500,000,000 up from our prior outlook of more than $350,000,000. We've planned to deploy approximately $75,000,000 for capital expenditures. We expect GAAP net revenue to range from $2,800,000,000 to $2,900,000,000 and cost of goods sold to range from 1.28 to 1 point $32,000,000,000. Total operating expenses are expected to range from $1,150,000,000 to $1,170,000,000.
At the midpoint, this represents a 3% increase over the prior year, driven by higher headcount, R and D expense, and charitable contributions, partially offset by lower marketing and stock compensation expenses. And we expect GAAP net income to range $350,000,000 to $380,000,000 or $3.05 to $3.30 per share. In closing, fiscal 2021 is off to a strong start and is poised to be another terrific year for our organization. Remain well positioned both to navigate the uncertainties of these times and to capitalize on the positive trends within our industry. Over the long term, our industry leading creative assets, firm commitment to operational excellence and strong financial foundation position our company to deliver significant growth and margin expansion for our shareholders.
Thank you. I'll now turn the call back to Strauss.
Thanks, Lainie and Carl. On behalf of our entire management team, I'd again like to thank our colleagues for their hard work, commitment excellence, and for delivering an exceptional start to the year. Our shareholders, I want to express our appreciation for your continued support. We'll now take your questions.
At this time, we'll be conducting a question and Our first question comes from Mario Lu with Barclays. Please proceed with your question.
Great. Thanks for taking the questions. Amazing quarters. So the first question is on the $70 price point announced for NDA 2K21. Any color behind making that decision?
And was that decision broad based or title specific since NBA 2k21? Will span 2 NBA seasons, this time set of 1. So in other words, is the higher price point embedded in guide for all AAA NewGen titles going forward or Jeff's MDA 2K. And I have a follow-up.
Yes, we're definitely announcing pricing on a title by title basis. I would just observe there hasn't been a frontline price increase for a very long time, although costs increased significantly. But most importantly, we believe we're delivering the highest quality titles in the business and consumers are staying more engaged than ever. Games have extraordinary playability and replayability, and they offer many, many hours of entertainment. We think it's a great value.
It does rely on our continuing to deliver amazing experiences, and that's our strategy and our goal.
Got it. And then the second question is on GT Online. Anything you can share in terms of the normalized growth rate for GT Online this quarter, So excluding the Epic Store, or similarly, can you share what percentage of the bookings came from new versus existing players in fiscal 1Q? Thank you.
No, we don't, we don't give that kind of granular detail.
Okay. No
Our next question comes from Mike Ng with Goldman Sachs. Please proceed with your question.
Hey, thanks for the question. I was just wondering if you could expand on the GTA5 enhanced edition for next holiday. It feels a little inappropriate to call it an typical remaster. And I was just wondering if you could talk a little bit about, whether or not there's an opportunity for a GTA call it a replacement cycle, if you will. Thank you.
Well, it's a great question. And I appreciate the sentiment with which it's asked because we've now sold in over 135,000,000 units. And of course, GTA5 was created for the last console generation is standard barrier in this generation. And now we've announced that it'll be available for the next generation of consoles, which is just amazing. Historically, Rockstar always delivers a great new experience with new content and new opportunities to excite engage and surprise players, and that's true of everything that Rockstar Games releases.
Any more details, I think, properly come from the label in due time, but we couldn't be more excited that the title will be available for the next generation of consoles.
Great. Thank you, Strauss.
Our next question comes from Brian Fitzgerald with Wells Fargo. Please proceed with your question.
Thanks guys. At Xbox 2020, a couple of weeks ago, 2 weeks ago, we saw how the world's grounded about they look great. Are all private division titles. So our question was around this. Strauss, when you mentioned, I think you said, the Outer Worlds and the Switch was 2,800,000 units already.
How do you see private division aggregating up volumes over time? Lainie, I think you said near term it's going to hit 10% that's private division and social point. So, how should we think about that metering out? Can it be longer down the road? Can it be a bigger percentage?
And then the second part to that question was these titles seem to appeal, maybe especially to the expanding demographic of gamers that are being pulled in the ecosystem. Can you can you give us any color or, dynamics in terms of how types of players that are engaging with private label versus some of your other studios?
Well, thanks for your question. Just to clarify, Outer Worlds has sold in 2,800,000 units across all platforms so far as recently made available for So and we're very excited about it. Outer Worlds also has more content coming. And that's a very exciting opportunity. We think the opportunity for private division to be a greater percentage of our overall net bookings is strong.
And to state the obvious. It'll all depend on the quality of the releases, but they're continue to sign up and announce great publishing arrangements with 1st class independent developers. And, and, so far their track record is pretty extraordinary. Which is, which is amazing. In terms of the demographic to which they appeal, I think that's title by title.
I don't think there's anything in particular in their strategy that would, would either limit or expand the scope of their potential audience, except that their titles are created by developers opportunity to be perhaps more innovative and take more risk, possibly, although we pride ourselves on being the most innovative company across everything we do. It's a really good start. We're incredibly proud of what the team has achieved so far in private division and very optimistic about the future.
Great. Thank you, Strauss.
Our next question is from Colin Sebastian with Robert W. Baird. Please proceed with your question.
Thanks. Congrats on the quarter. Have a couple of questions as well. First off, with the start of the MBA season in Orlando, curious if you've seen any change positively or negatively with respect to NBA 2K and broadly where markets have reopened, if you've seen any interesting changes or observations with respect to usage trends, then a bigger picture question on digital distribution. Strauss, I know you guys support platforms where your users are, where they want to excess games, there are an increasing number of platforms, which seems to add some complexity to the to the industry.
And I'm curious if you have any updated thoughts on a direct to consumer offering if you think that makes more sense now, or maybe less sense, but just curious on your thoughts on distribution.
So for NBA 2K, obviously, this has been an incredible year for us and we've had a really, really nice run. Obviously, much better than our expectations. We were originally projecting that it wasn't going to be a record year. Now it's going to be a record year across the board. We obviously have some tailwind with that behind the shelter at home.
But generally speaking, the game has been improving since the day came out, and it's really generated a huge of interest across the board. And in terms of has that interest changed with the new seasons, etcetera, there's really nothing to report there at this point. It is it's certainly we're excited that basketball is back at it. It's always a good thing when people are engaged with the NBA. It's incredible brand and having players on the court is obviously a good thing for us.
But there's nothing really that we have to report about the results itself specifically related to that.
And with regard to distribution, yes, I think you captured it well. We said we want to be where the consumer is. We need to find that intersection of what great for the consumer and what makes sense for us as a producer and distributor. Supportive of new launches. We were supportive early of Google stadia.
We certainly support what Microsoft and Sony Nintendo do when they bring out new platforms. And I think that will continue. In terms of direct to consumer opportunities, naturally, we have the ability go direct to consumer. Rockstar goes direct to consumer through their launcher. 2K goes direct to consumer.
We have the ability for consumers to buy goods directly from our company. And I expect that to continue. It's still a relatively small portion of our business. I think our expectation over time is that our goal is not to drive consumers to any particular destination, including one of our own, Our goal is to be where the consumer is.
Okay. Thank you.
Our next question is from Eric Handler with MKM Partners. Please proceed with your question.
Yes. Good afternoon. Thanks for the question. Wondered if you could talk a little bit about, how you're balancing concerns in the back half of the year about how the economy is going to fare, versus what you're seeing in engagement in July? Are you seeing much of a falloff versus the months in in the first quarter.
How how is that shaping up? Yeah. Shit.
So we in our Q2 guidance, we have included the stacks that we're seeing some benefits continue, on our business, some of the similar tailwinds that we've had since since starting in the first quarter, actually the end of the fourth quarter as well. So we do see some of that in our Q2 guidance. In terms of the back half we really haven't factored anything in related to that or even or to take into account any sort of recessionary possibilities.
Right. So you're feeling good about the consumer right now, but, basically, you don't have a crystal ball for the back half of the year, so too challenging to predict at this point.
That's right.
Our next question is from Drew Crum with Stifel. Please proceed with your question.
Okay, thanks. Hey guys, good afternoon. Carl, I think you and I have talked about this in the past, but want to revisit the software development cost balance, and reconcile the total against your commentary around the game pipeline. It's considerably lower versus recent years. And with more than 90 games in development, does that suggest These are smaller titles or you're just not as far along.
And hence, the pipeline is very back end loaded. Thanks.
Can you just clarify what you mean? What's considerably lower? Well, if you look at balance sheet?
Yes. Correct. Yes. Current plus non
current? Yes, I think, look, as we said, our pipeline is twice as high as it was more than double the size it was 5 years ago and we're really excited about what it about what that is. Some of these titles are early on in development. Some of those titles are much further along in development. Some of these titles are very, very big titles and some of these titles are very, very, very small titles.
So there is a big there is a big mix there. And in terms of so you can't really say, well, there's just more titles or they're less expensive because there is such a play between those two elements. But you identified those 2 elements. That will those 2 things will certainly play into how large that capitalized balance sheet moves going forward. It's relative to the scale and where we are in development.
Okay, okay. Thanks.
Our next question is from Matthew Thornton with SunTrust. Please proceed with your question.
Hey, good afternoon, everyone. Thanks for taking the question. Maybe first, Strauss, be interested to get your thoughts 3 months later since the last call, given the COVID environment, just be interested to hear your thoughts the lasting impact of all this, whether it's take to kind of operation specific, whether it's consumer and kind of what you think you can kind of hold on to one thing kind of normalize. I'd just be very interested to hear your latest thinking about the the lasting impact of, of this environment longer term. And then just secondly, quickly, you talked about, obviously, GTA moving to next gen consoles.
Curious if there's any other non recurring franchises that could also see a similar upgrade path.
Yes. In terms of the lasting impact of this period of time, it's so hard to predict because most humans tend to believe that whatever is going on right now is what will always continue. And of course, that's not the case. Everything in fact generally changes. So we've seen certain companies announce that from their point of view, everyone should just always work from home.
And I know there are people I know who believe they'll never go to the movies again or they'll never fly in an airplane again or stay in a hotel again or eat inside a restaurant again. And I don't see the world that way. So from our point of view, this tragedy will pass and the world will go back to looking at an awful lot like it did before. However, it does feel like this has been a period of time where previously existing trends have been accelerated. And I do think that we appreciate the possibility of remote work as needed where we understand, in a disaster scenario, how we can continue to be productive.
I think frankly, it's created a great benefit in our morale as an organization. As any tragedy does, I think strategy will either pull people together or push them apart. I think we had a strong enough culture that it pulled people even more together. It's just my point of view, but I think it's borne out in productivity and the quality of our games and the quality of our operations. I'm hopeful that that continues.
In terms of the consumer, I do think that this has, intensified a shift from both analog entertainment to new interactive entertainment. And I do think that people have come back to video games and tried video games when they hadn't tried them previously. And I think you're going to see a long lasting increase in demand. Again, that's not reflected in our numbers because we don't, we don't build our guidance based on my opinion about things, luckily. But I do believe that's the case.
And, I think you're seeing a systemic shift in favor of interactive entertainment. And there are only a handful of companies on earth who aim to do what we do, never mind are able to do what we do. So it puts us in a very good position indeed. In terms of your question about other, older titles being brought to next gen consoles, we always leave those announcements to our labels, but I'm sure there'll be more in the future.
Our next question comes from Brian Nowak with Morgan Stanley. Please proceed with your question.
Hi guys, it's Matt on for Brian. Thanks for taking the question. 2, if I could. So on GTA on the next gen, Can you walk us through the decision, to split it into, in the back half of next year, split it into a separate online mode and then like the upgraded version of GTA5? Obviously, you had tremendous success kind of just packaging those 2 together when you went from the last generation to the current generation.
So what was the opportunity that you saw on NextGen to maybe separate those two games. And then just separately thinking about pipeline now that we're kind of 3 months into the work from home environment. Are you seeing more of an impact on games maybe that are a little farther out in the development cycle? Or do you feel that the pipeline is more or less kind of on track that you expected to be you would have expected it to be 3 months ago?
Yes. I mean, the decision regarding GTA for NextGen is a marketing decision and action decision by Rockstar Games. And I'm sure they'll have more to say about that in the coming months, but I'll leave it to them as I prefer to do. In terms of the pipeline, we've been very fortunate. As I just said, our workforce has been exceedingly productive.
And I think we only have announced one delay since this whole Tragedy started. That was a delay of Kerbal Space Program too, to fiscal 2022. But apart from that, everything is looking really good and is track and on target, no issues whatsoever.
Our next question comes from Mike Hickey with the Benchmark Company. Please proceed with your questions.
Thanks, Strauss, Karlini, Hank. Thanks for taking my questions guys and congrats on another solid quarter. Just two questions for me. I guess, I'm curious the response you've gotten from your player community on the naturalist experience, light latest upgrade, or update for, Red Dead Online. And also curious about future cadence of of content.
I think it was December last year when we got the Moons Center update. So it seemed like it was sort of a extended period of time before we got an update. I'm just curious if that was maybe because of the work from home or if there's something else going on that sort of led to that sort of lengthy time in between updates. And then Strauss, I know you talked on pricing, just want to just curious on how you think about, you know, the economy, with a $70 price point. Obviously, a lot of people without jobs how you think about, you know, how it could impact reoccurrence spend within the game.
And if you've done any sort of survey work or what gives you, I guess, the confidence that demand won't slip at that price point? Thanks guys. Best of luck.
Yeah, the, productivity has been strong across the board and across all of our labels. And as you know, Rockstar Games decides on the cadence of updates and it's driven by great ideas and the ability to deliver those great ideas, into superb experiences. And all of our labels wait to distribute new content until it's nearly as perfect as it can possibly be. There is more content coming for both Red Dead Online and Grand Theft Auto Online this fiscal year. So tuned.
I think it's going to be awesome. In terms of the price point, this is a very modest price increase. Pricing has been going down on a real dollar basis for the better part of 15 years. And, we're applying this price point in the case where we think the quality not only supports it, but demands it. Our production costs have gone up greatly, but importantly, the consumer experience is more robust than ever before.
And, I'm utterly convinced that NBA 2k 21 will be nothing short of extraordinary. So I don't expect that there will be any concerns.
Our next question comes from Eric Sheridan with UBS.
So much for taking the question. Maybe 2, if I can, following up on some of the themes earlier in the call based on what you've seen from player behavior through COVID-nineteen. What might some of the key learnings have been around re marketing to older content and sort of reinvigorating players desire to sort of go back and revisit content, and games from a prior generation, to continue to sort of drive out lifetime value of that content? And secondly, what have you learned about marketing efficiency as a result of the current environment and how that might, how might that carry forward? Into the next console cycle as well?
Thanks so much.
Catalog any differently than before. We're bringing at the mafia trilogy. We always bring out, legacy content. You in an enhanced format for new consoles on a regular basis or even in the absence of new distribution opportunities. And I'm sure that'll continue.
Of course, driven by the demand for our properties. And if I'm not mistaken, we still have the highest, sales per skew of catalog of any of our competitors based on the quality of what we have historically done, we aim to keep doing that. In terms of marketing efficiency, I haven't really seen a change. At any given time, we're trying to be more and more efficient with our marketing. Undoubtedly in the mobile business, there's going to be a meaningful change in marketing based on changes, that have been announced by Apple.
Other changes that are driven by privacy legislation and privacy concerns. But I don't know that that will enhance efficiency. In fact, it may go in the other direction. So it's always a challenge to create the best marketing. And I wouldn't say it's becoming more or less efficient.
Than before.
Our next question comes from Todd Juenger with Sanford Bernstein. Please proceed with your question.
Hi, thanks a ton for taking the questions. I also have 2, if you don't mind, for whoever wants to field them. The first at the risk of being shot down again and just waiting for more from Rockstar, I'd love to explore the topic of the relationship with PlayStation around GTA online. And just, at a higher level, without the specifics, what sorts of factors go into the decision to make such a partnership, with a company like Sony. And, in particular, what sorts of things would we expect you would get in return from them in order to offer them the things you've done, including the exclusivity.
That's question number 1. The second one is, it wasn't too long ago. Every night we turned on the TV, we saw NBA celebrities playing against each other on NBA 2k on television. I'm just I'm really curious What's about what that did in terms of licensing revenues or engagement in the quarter, although that's interesting. I'm more interested in whether that's opened your mind or any of your development team's mind and 2, how to keep things like that going well into the future and what that can do in terms of bringing together celebrity and culture and your games in a social and engaging way and sort of driving that whole experience to a whole new level.
Thanks.
Yes. I mean, without going into too much detail on confidential arrangements, typically, we have great relationships with all of our platform partners. And we will sometimes announce, a particular situation In many instances, it's driven by marketing support, and other benefits that both parties obtain from such an arrangement. And Carl will take the, your question on basketball.
Yes. In the case of the NBA, the player tournament that we did, obviously that was an exciting event and it was an unplanned event as you could probably tell, it's like something that would probably not have happened, but we're not for the COVID situation. So in a lot of ways there are some interesting things that come out of these situations when you're dealt with them. This particular one, I wouldn't really think about it as a specific money making opportunity in the moment. But like any marketing or anything that engages an audience or even creates new audience, it has the benefit of creating interest and engagement with the game.
So we really look at that kind of thing like we would as any other marketing opportunity. You know, is there a big huge learning from it? Is something we can keep going? Perhaps, I mean, it was definitely something different than what we've done before, although we done player based things in the past and we've done tournaments in the past, this was just kind of marrying them together. So that's not to say we can do it every day or that this is that this is something that is going to set some kind of precedent for us, but it's certainly is interesting.
It was a lot of fun to do and it undoubtedly increased interest and engagement with the game and as our financial results ultimately reflect all of these things happening for us at once.
Fair enough.
Our next question comes from Doug Crudes with Cowen and Company. Please proceed with your question.
Hey, thank you. A little bit along the lines of the last question. In the last couple of years, you've really ended the lifespan of NBA 2K, very deep into the annual cycle far beyond where it used to be sort of falling off. Do you think the NBA 2k league has been an important part of that? If so, is there anything you could point to specifically where where the league has really helped engagement with the overall game?
Or do you think the 2 are incidental to each other? Thanks.
Very hard to point to it, but I think the NBA 2K league is not only an interesting opportunity as a standalone but also forms part of building the brand and building overall engagement. I think you're 100% right. It used to be a 3 month experience, then it became a 6 month experience. And now it's very close to a year long experience, and that's very much our goal. And that, that's really a reflection of NBA 2K morphing from being the highest quality SIM in the market to 1 of the highest quality interactive entertainment experiences of any kind.
And it's both a SIM and a lifestyle. In a world you can inhabit that's constantly evolving and changing. That's very much the goal of visual concepts and you're seeing that goal being realized. And I believe you'll see it be more and more realized. Does the league form a part of that unquestionably?
We also expect it to be very successful on a standalone basis.
Okay. Thank you.
Our next question comes from Alex Jama with Jefferies. Please proceed with your question.
Thanks for taking the question. Carl, a follow-up to a previous question, but the upcoming game pipeline for 93 new titles that you mentioned last quarter that were launched by, I think it was fiscal 25. Should we expect a similar cadence as we've seen in the past or maybe 1 non sports AAA title per year? And I think it's 11 franchises in your portfolio now that are sold in at least 5 million units. Is it also fair to assume that the content rate will include sequel to most of those that you're franchises?
Thanks.
It's certainly the development pipeline certainly does include sequels to the bigger franchises. And I some cases could include sequels from new franchises to the extent they actually work. So that there's no doubt that that's the case. I'm sorry, what was the first part of the question?
If, in the past, I think the goal has been 1 non sports AAA title per year.
Is
that the cadence we should still think about?
Yes. I mean, look, it's, again, if they look 1, 2, whatever it may be, that is our goal to come up with more than more than more than 1, more than what we have now. To be more consistent with the number of AAA releases that come out every year in addition to our annualized title. So, whether that number is 1 to 3, that certainly would be the goal.
Okay. Thanks, Mark.
Our next question is from Ryan Gee with Bank of America. Please proceed with your question.
Yes. Hey, good afternoon. Thanks for taking the question. So the 100% plus growth in my team players, certainly consistent with demand we're seeing for expression personalization in games right now. So does this speak to the opportunity for a non SIM gain from the NFL and why 2021 is the right time in place to deliver that game?
And then on a related matter, the doubling of the NBA players, I think it was last quarter. Can you speak to how much you've seen in growth in players brand new to the franchise, so that as you look forward, even if you lost some of these kind of fringe casual guys, you'll still be net ahead? Thanks.
Yes, I would just observe as I did previously that the game already offers numerous offer opportunities that are in addition to the SIM, the core SIM game. And We'll leave to visual concepts how that will be expressed going forward. But right now, we think MBA 2K offers something for everyone. You want the best same game. It's there.
You want an opportunity to experience great music. It's there. Great characters. It's there. Play outside of the SIEM game.
It's there. We're just experienced the world. That's a possibility too. So I'm sure there'll be much more to talk about and we'll let visual concepts in 2K talk about it. In terms of data around players, we don't tend to get to go into that much detail.
But with 14,000,000 units sold 18% greater than last year, wonderful engagement and enormous growth in recurrent consumer spending, I think you can safely assume that the audience is expanding.
And also, to answer your question about football, look, we obviously think that there's a significant opportunity for non simulation gameplay in with the NFL, the football business. Otherwise, we wouldn't have done that partnership and won't be so excited about it. The fact, the success of my team isn't a fairly a barometer for that. There are so many different kinds of non simulation play and whether the My Team phenomenon is relevant or not remains to be seen. But irrespective of that, the non SIEM market is very exciting for us and that's why we're going forward with NFL with that.
That's helpful color. Thank you guys.
Ladies and gentlemen, we've reached the end of the question and answer session. At this time, I'd like to turn the call back over to Strauss Delnick. For closing comments.
Thank you so much for joining us today. On behalf of everyone to take 2, we appreciate your interest. We appreciate your support, and we'd like to wish you all a happy, healthy and most of all safe summer. Thank you for joining us.
This concludes today's conference. You may disconnect your lines at this time and we thank you for your participation.