Greetings and welcome to the Take 2 Interactive Software First Quarter Fiscal Year 2019 Earnings Conference Call. At this time, all participants are in a listen only mode. A question and answer session will follow As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Hank Diamond, Senior Vice President, Investor Relations And Corporate Communications.
Good afternoon. Welcome and thank you for joining Takeu's conference call to discuss its results for the first quarter of fiscal Today's call will be led by Strauss Thelnick Take 2's Chairman and Chief Executive Officer Alsledo, our President and Lainie Goldstein, our Chief Financial Officer. We will be available to answer your questions during the Q And A 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 are considered forward looking statements under federal securities laws. These forward looking statements are based on the beliefs 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 and quarterly report on Form Ten Q, including the risks summarized in the section entitled Risk Factors. I'd also like to note that Additional details regarding our actual results and financial 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. In addition, we have posted to our website a slide deck that visually presents our results and financial out Our press release and filings with the SEC may be obtained from our website at www.kick2games.com.
Note that our fiscal first quarter results reflect our adoption of ASC 606. This does not materially impact our net bookings operational metric, but does affect our GAAP results in a number of ways. Prior periods have not been restated. Additional information will be included in the company's quarterly report on Form 10 Q for the period ended June 30, two 2018. And now, I'll turn the call over to Strauss.
Thanks, Hank. Good afternoon, and thank you for joining us today. I'm pleased to report that fiscal 2019 is off to a solid start with our business delivering first quarter operating results that exceeded our outlook. This performance was driven Rantuff.05. During the quarter, we returned $154,000,000 in capital to our shareholder through the repurchase of 1,600,000 shares of our stock at an average price of and we ended Grant Theft Auto Online continued to exceed our expectations in the first quarter as it has in every period since its release.
Since April 1, Rockstar Games has released a number of free content updates for Grand Theft Auto Online, following in the Southern San Andreas Super Sports series as well as adding the Medrazo dispatch services mission series and most recently GTA Online after hours. After hours had a bigger week one audience than last December's doomsday heist, which went on to be a record breaking update. Rockstar Games plans to bring much more innovative new content to Grand Theft Auto Online in order to drive engagement and to keep its constantly evolving world thriving. Sales of Grand Theft Auto V also outperformed our expectations with sell in of the title now approaching 100,000,000 units. Remarkably, nearly 5 years after its initial release, Grand Theft Auto5 remains the standard bearer for the current console generation.
In April, Rockstar Games released the Grand Theft 5 premium online edition, which includes the game's complete story experience, the world of Grand Theft Auto Online, all existing gameplay upgrades and content, and the criminal enterprise starter pack. We fully expect that the October 26th launch of Red Dead Redemption 2 will mark yet another creative milestone and will further illustrate their ability to deliver entertainment experiences that redefine our industry and captivate audiences throughout the world. NDA 2K18 continues to attract new fans and the title is now sold in more than 10,000,000 units. Up 17% over last year's release. NDA 2K18 is our highest selling sports title ever and a testament the tireless hard work and innovation of the team at visual concepts.
In addition, our MBA 2K series continues to benefit from strong engagement and recurrent consumer pending, which exceeded our expectations in the quarter. We believe there remains a substantial opportunity to build on our industry leading basketball series tremendous success and continue to grow Our first quarter results were also enhanced by a number of other recent releases and catalog titles, including Social Point's mobile games, WWE SuperCard, WW 2K18, Xcom 2 and Myers civilization 6. Finding new and innovative ways drive ongoing engagement with our titles remains a key strategic priority for 63% of total net bookings, up from 59% last year. In addition, in addition to virtual currency for Grand Theft Auto Online and MDA 2K, recurring consumer spending was enhanced by a variety of other offerings. In the free to play category, Social Point's 2 biggest mobile titles Dragon City legends continue to be positive contributors to our results.
The studio's hard of work on their strong pipeline of new titles and we view Social Point as an important long term growth opportunity for Take 2. Recurrent consumer spending at WWE SuperCard grew 18% and the game has now been downloaded over 17,000,000 times. During the quarter, 2K released a number of updates to the title, which helped drive engagement. An NBA 2K Online remains the number one PC online sports game in China with over 37,000,000 registered users. In addition, add on content contributed significantly led by offerings for Sid Meier's Civilization and XCOM 2.
Fiscal 2019 is poised to be one of our best years yet and we expect to deliver record operating results. We're incredibly excited about the launch of Rockstar Games Red Dead Redemption 2 as well as the upcoming releases of NBA 2k19, which marks the 20th anniversary of the series, and WWE 2K19. We'll continue to support our titles with offerings designed to drive engagement and recurrent consumer spending. As we celebrate strategically and financially to capitalize on our industry's many opportunities. Our development team's unmatched ability to deliver the highest quality entertainment experiences and drive ongoing engagement through connected play is the key ingredient to our ongoing success.
As a result, take to is poised to deliver growth and returns for our shareholders over the long term. I'll now turn the call over to Carl.
Thanks Russ. Today, I'll focus on our development pipeline. September 11, 2K will launch NBA 2K19, which will deliver the series trademark style and NBA authenticity. The standard edition will feature Milwaukee Bus standout and 2 time NBA All Star, Jan Nas Adetokumbo, on the cover. To mark the franchise's 20th anniversary, TUK will also release a special NBA 2k1920th anniversary edition featuring 3 time NBA champion 4 time NBA MVP and avid NBA 2k gamer, LeBron James, on the cover.
This iconic cover will feature Akron's favorite song alongside artistic composition of words personally chosen by LeBron, including strive for greatness, driven and equality. In addition, through exclusive James Team content and items, fans who purchased the NBA 2k1920th anniversary edition, will receive access to the game 4 days early on September 7th. Our NBA 2K brand continues to expand its audience throughout the world across both traditional and emerging platforms, providing fans with numerous ways to engage with our industry's most popular and successful basketball series. Just today, NBA 2K Online 2 entered Open Beta in China co developed by Visual Concepts And Tencent, the sequel to the highly successful NBA 2k online is based on the console edition of NBA 2k and features 2k's legendary gameplay, 20 customizable position types, new player trading systems, esports optimized features, localized commentary, and more. NBA 2K Online 2 is planned for full commercial release this fall.
We believe that China represents a significant growth opportunity. Both for NBA 2K and for our business in general. In addition, 2K recently announced that they will be the exclusive publisher of Sabre Interactive's upcoming arcade action sports game NBA 2K playgrounds too. This over the top 212 basketball experience will complement our top selling NBA 2K series and expand 2K's footprint in the basketball video game space. The original NBA playgrounds was a fantastic throwback to the glory days of arcade action sports.
NBA 2K playgrounds too will give fans in both franchises an exciting new way to game with friends around the world. The title will be released this fall for Xbox 1, PlayStation 4, Nintendo Switch and PC. The inaugural season of the NBA 2 K league, our joint venture with the NBA, is in full swing and heading into postseason play, and we've been very pleased with the league's progress and growing viewership. In addition, fan engagement on Twitch, the league's streaming partner, and its social channels has been strong. Beginning on August 17, the league will hold its first playoffs that will include 8 of its 17 teams and culminate with the finals on August 25th.
The NBA 2 Kately championship team will receive $300,000 from the playoff prize pool as part of the $1,000,000 in total prize money that will be awarded during the season. This 1st season has been a greatly experience for our organization and has provided a sound approach to expanding our presence in the rapidly growing world of esports. We look forward to watching the continued progress and growth of the league, which has a long term potential to enhance engagement and to be a meaningful driver of profits for our company. On October 9th, 2 cable bring gamers back into the virtual squared circle with WWE 2K19, which will include their favorite sports entertainment superstars, gameplay modes and hard hitting in ring action. A.
J. Styles, the phenomenal one, will be the cover superstar of the standard and deluxe editions of the title. In addition, 2K will feature 16 time WWE World Champion Global Pop Ultra icon and WWE Hall of Famer, Rick Flare, and the WWE 2K19 WU edition. This edition will be limited to 30,000 copies worldwide and offer an impressive assortment of exclusive and collectible memorabilia, as well as robust digital content. Players who pre ordered WWE 2K19 at participating retailers will receive 2 playable characters as a bonus, including former WWE champion Ray Misterio and UFC Hall of Fame, Roudy, Rhonda Rousey.
And this year, for the first time ever, fans will have the opportunity to compete in the WWE 2K19 $1,000,000 challenge. In which the winner of the tournament will face off 1 on 1 against A. J. Styles in WWE 2K19 for the chance to win a $1,000,000 Grand Prize. On October 26, Rockstar Gans will launch Red Dead Redemption 2, the eagerly awaited sequel to one of the label's most critically acclaimed and beloved titles.
Created by the team behind Grand Theft Auto V and Red Dead Redemption Red Dead Redemption 2 is Rockstar Games first title developed from the ground up for current console generation, an epic tale of life in America's unforgiving heartland, Red Dead Redemption Two's vast and atmospheric world will also provide the foundation for an entirely new online multiplayer experience. In June, Rockstar Games announced details for the special edition and ultimate edition of the title, along with extra pre order bonuses for all three versions, the unique assemblage of real world collectibles inspired by the game. We could not be more excited about the upcoming launch of Debt Redemption 2, which is poised to be another massive entertainment event. On November 6th, 2K will broaden our offerings for the Nintendo switch, with the release of carnival games. The next entry in our popular franchise that has sold in over 9,500,000 units worldwide.
Developed specifically for the switch, Carnival games is fun for the entire family and can be played alone or with up to 4 players simultaneously leveraging the unique accessibility of the console's Joy Con controllers. The game features 20 exciting reimagined games in 4 unique allies, that can be placed at home or on the go alone or with family and friends. Throughout the year, we will continue to support our titles including updates for Grand Theft Auto Online, WWE SuperCard and Lauren. In addition, Social Point and 2K will continue to broaden our offerings for mobile devices. Looking ahead, we have a strong development pipeline across our labels, which includes new releases from our renowned franchises, along with groundbreaking new intellectual property, coupled with our substantial growth opportunity from recurrent customer spending.
Well as the many opportunities presented long term. I'll now turn the call over to Lynn.
Thanks Carl, and good afternoon, everyone. Today, I'll discuss our first quarter results and then review our financial outlook second quarter fiscal year 2019. Please note that additional details regarding our actual results, financial outlook contained in our press release. As Strauss mentioned, our business delivered better than expected operating results in the first quarter of fiscal 2019. Total net bookings were $288,000,000, which exceeded our outlook range of $215,000,000 to $265,000,000.
Due primarily to the outperformance of Grand Theft Auto Online and Grand Theft Auto V as well as recurrent consumer spending on NBA 2k 18. Digitally delivered net bookings were $253,000,000 and accounted for 88% of the total, up from 81% last year. Turning to some details from our first quarter income statement. GAAP net revenue decreased by 7% to $388,000,000 cost of goods sold decreased 33 percent to $131,000,000. Operating expenses increased by 7% to $86,000,000 due primarily to higher personnel expense.
And GAAP net income was $72,000,000 or $0.62 per share, are from $60,000,000 or $0.56 per share in the prior year period. As a result of favorable market conditions during the first quarter, we were able to buy back 1,600,000 shares of our stock at an average price of approximately $96 and we ended the period with $1,100,000,000 in cash and short term investments. Now I will review the highlights of our fiscal 2019 financial outlook. Starting with the fiscal second quarter, We expect net bookings to range from $500,000,000 to $550,000,000. We expect high single digit growth in recurrent consumer spending and we expect digitally delivered net bookings to approximately flat.
The largest contributors to net bookings are expected to be NBA 2K, Grand Theft Auto Online and Grand Theft Auto Five and Social Point's mobile offerings. We expect GAAP net revenue to range from $480,000,000 to $530,000,000 and cost goods sold to range from $191,000,000 to $270,000,000. Operating expenses are expected to range from 2.35 $245,000,000. At the midpoint, this represents a 15% increase over last year, driven primarily by higher marketing expense. And we expect GAAP net income to range from $50,000,000 to $62,000,000 or $0.43 to $0.53 per share.
Turning to good first quarter results and strong outlook for the balance of the year. We now expect net bookings to range from $2,700,000 to 2,800,000 dollars, up from our prior outlook of $2,670,000,000 to $2,770,000,000. At the midpoint, this represents a 38% increase over fiscal 2018 driven primarily by the launch of Red Dead Redemption 2 and expected growth from NBA 2K, which we forecast to be partially set by lower net bookings from Grand Theft Auto5 and Grand Theft Auto Online. We expect high single digit growth in recurrent consumer spending and we expect digitally delivered net bookings to increase by approximately 20%. The largest contributors to net bookings expected to be Red Dead Redemption 2, NBA 2K, Grand Theft Auto Online and Grand Theft Auto Five, WWE 2K, and Social Point's mobile offerings.
We expect the net bookings breakdown from our labels to be roughly 55% Rockstar gains, 40% 2K, and 5% social point and other. And we expect our geographic net booking split to be about 55% United States and 45% international. Vector to generate approximately $785,000,000 in net cash provided by operating activities. Effective April 1, we adopted a new accounting standard, which requires that changes in restricted cash be included within our cash flow statement. As a result, our outlook reflects $72,000,000 increase from the change in restricted cash during the first quarter.
We plan to deploy approximately $60,000,000 for capital expenditures. We expect GAAP net revenue to range from $2,500,000,000 to $2,600,000,000 and cost of goods sold to range from $1,430,000,000 to $1,460,000,000. Total operating expenses are expected to range from $900,000,000 to $940,000,000. At the midpoint this represents a 21% increase over prior $169,000,000 to $199,000,000 or $1.45 to $1.70 per share. Management reporting purposes, we expect our tax rate to be 20%.
In closing, fiscal 2019 is off to a solid start and is poised to be one of our best years ever. With record expected operating results. Over the long term, our industry leading creative assets firm commitment to operational and strong financial foundation position our company to deliver growth and margin expansion for our shareholders. Thank you. I'll now turn the call back to Strauss.
Thanks, Carla Lainie. On behalf of our entire management team, I'd like to thank our colleagues for delivering a successful start to the year and to our shareholders, I want to express our appreciation for your continued support. We'll now take your questions.
Our first question comes from Justin Post of Merrill Lynch. Please proceed with your question.
I just wanted to revisit Grand Theft Auto after hours. You said engagements up and you're happy with that. Can you talk about how you think that can monetize the franchise. And then I think, Lainie, you guided recurrent spend up in 2Q. Could you just remind me what you guided to?
And kind of drive that from slightly down this quarter to up in the fiscal second quarter?
Thanks, Justin. In terms of after hours, it's looking very strong. And, our focus of course is on creating great entertainment and captivating and engaging consumers over a long period of time. That's really everything that we're concerned about monetization tends to follow. With the significant updates, the monetization results have typically been very strong.
And so for, Q2 for recurrent consumer spending, we do expect it to be higher in Q2. And that's due to the growth in the NBA 2K social point, and that's offset by lower GTI line for current consumer spending.
Great. Thank you.
Our next question comes from Brian Fitzgerald of Jefferies. Please proceed with your question.
Thanks, guys. A couple of questions, Strauss. It's one of the most competitive holiday seasons and years with big games kind of coming every week in October. How do you think about the market this holiday. And then, when you were wondering and when you think about what kind of dynamics you're seeing around early access programs around things like anniversary and deluxe additions?
Has it changed from what you've seen in previous years? Maybe from last year with tip-off any comments around early access? Thanks.
And we never take anything for granted and we don't claim success early. We do our best to create phenomenal entertainment and market it effectively And then we, you know, we explained what happened. And we have enormously high expectations for October with the launch Red Dead Redemption too. We take the competition seriously. We're really excited about the release.
I would just note you don't have to go back too many years, when when holiday season was just inundated when people basically only released products in holiday season and this company performed well at that time as well. So I think it all comes down to quality. In terms of the benefits of early access and other programs, we do have those kind of programs. We do believe in them as long as you have something great that consumers that consumers want. So it's worked well for us.
Our next question comes from Eric Handler of MKM Partners. Please proceed with your question.
Just curious about NBA. I'm wondering if you're seeing any type of parallel with every 1% incremental units sold in a year or 2% or whatever you want to whatever number you put into it. How much extra digital revenue does that help drive? I wonder if you could give us some metrics around that.
Yeah. So, you're right. Obviously, as we sell incremental units and have more success. We also have more engagement. Therefore, we typically have incremental recurrent consumer spending.
So, success breeds success and, We don't actually describe the linear relationship, but we are aware of it.
But is it safe to assume that the percentage growth that you're getting in units, and revenue from the core game, you're seeing faster growth on the digital size. So, the digital growth is outpacing the growth of the game itself, or the recurrent revenue part of digital is outpacing the game itself.
I want to make sure I understand. Are you talking about the percentage of full game units that are digitally distributed, or are you talking about recurrent consumer spending?
Are
you talking about both?
Talking about the recurrent consumer spending?
Yes. As we do a better job with both the game and with opportunities for ongoing engagement recurrent consumer spending continues to rise.
And we expect in Q2 recurrent consumer spending on MBA to grow and also for it to be up for
the full year. I'm sorry, Lenny. Could you say
that again? You're expecting the gains to grow?
We're expecting growth in recurrent consumer spending for MBA. 2K in Q2 and for the full year.
Okay, great. And then just one quick question. Have you been buying back any stock since the end of the quarter? Are you willing to comment on that?
We make those announcements after the end of the quarter.
Our next question comes from Chris Merwin of Goldman Sachs. Please proceed with your question.
Can you guys hear me okay? Hello?
Yes, we hear you just fine.
Okay. Sorry about that. Yeah, just a couple of questions if I could. For Red Dead Digital preorders, I noticed that you all are giving away GTA online cash for free. And also it looks like there's a revolver that can be used in Red Dead, that should have in GTA online.
So it seems like there's a strategy there to cross promote between those two titles was wondering if you could talk about that strategy a bit more and how you plan to grow both the GTA and Red Dead on online community. And then just along those lines, maybe if you could comment on the digital mix of Red Dead preorders and what that's looked like so far relative to the overall digital download mix that you reported for fiscal 2018, I realize you've guided to digital downloads being down in fiscal 2019 from the impact of, I guess, a higher physical SKU of Red Dead units, but has that guidance been consistent with what you've seen so far and the pre order data?
Yeah. In reverse order, thanks for your question. We don't really talk about how preorders are stacking up digital versus physical And with regard to potential cross promotion between Grand Theft Auto And Red Dead Redemption 2, Rockstar Games is employed some creative techniques in cross promotion. I think they're pretty exciting. And you know, social club has an awful lot of members and there are a lot of avid fans, not just of Grand Theft Auto, not just of Red Dead Redemption, but also fans of Rockstar Games.
And, so I think it's great that there's some cross promotion going on But as you know, we always we always prefer that our labels give more detail on their development and on their promotion and their marketing. And I'm quite certain that Rockstar will do that in the coming months.
Our next question comes from Mike Hickey of the Benchmark Company.
Carl Amy Hink. Congratulations on an awesome quarter. Thanks for taking my questions. The, just to the first, clarification, maybe Carl, on what you said about an entirely new, online multiplayer experience for Red Dead 2. Did I hear that correctly?
Is that new to the franchise? Is that new to Rockstar, or can you just clarify that or add to that comment? I appreciate it.
Yeah, there's nothing I'd like, there's something really more to add about that, which is, I'll simply said that there's an all new, there's an all new online experience coming with Red Dead Redemption. There's been any other details given other than that.
Okay. All right. Well, I guess we'll be excited to find out when they announce it. 2nd question on R and D headcount, it looks like ending 2017, you're close to $3200,000,000, which is up pretty dramatically costs from $13,000,000 plus 70%. And then thinking about maybe headcount within Rockstar, I'm guessing you're about 1800 maybe higher R and D professionals, which I'm guessing is maybe up 100% from when you release Grand Theft Auto, 5.
And so I'm guessing they're working hard on RDR2. And then thinking back, I think it was 2010, you you had Red Dead Redemption. In 2011, you had LA in the war. And of course, that was a co effort with team Bondi 2012 Max Payne13. You had Grand Theft Auto, 5.
So four big games, 4 releases, in 4 years, And now since you take a 5 headcount, maybe up 100% within Rockstar. So I guess the question is, what does this increase in resources within Rockstar provides you in terms of increasing the pace of future releases from Rockstar where historically, it seems they've been agreeable to releasing content on an annual basis?
Yeah. I'm Mike, we don't really give out that much specificity on headcount. We've made no secret of the fact that we've grown our headcount group wide that's focused on development. But I think your percentages are meaningfully off. In terms of your question, which I really think has to do with development cadence, if I heard it correctly, the business has changed.
You know, back when, back 8, 10 years ago, we had a business that involved spending a lot of resources to create a big standalone title, putting the title into the marketplace and moving on to the next title. And Rockstar Games with the release of Grand Theft Auto Four Pined downloadable add on content. And ever since that, as you know, our company is focused on finding ways to captivate and engage consumers post release. Now we don't have a successful title, of course, we don't have that opportunity. But with success and we were fortunate, we've had quite a bit of it at at both of our core labels.
We do have such an opportunity. And that's, you know, the revenues that come from add on content, we call recurrent consumer spending, as you know, and transformed our business. So it's up to 63 percent of our net bookings in the first quarter. Nearly half our business in the last year. So I think we are dealing with a very, very different business and our development teams now continue to raise the bar, create for what we do.
And that was reflected in Grand Theft Auto V, which is now sold in almost 100,000,000 units. And I'm quite certain it'll reflected in Red Dead Redemption 2. It's also reflected in the quality of work done at the 2K label, whether that's in our border lands franchise or in our basketball program or in other of our programs like Civilizations. So I think your expectation should be that our headcount would grow more. We've made no secret of the fact that, we have some wonderful intellectual property and our constraint is not financial and certainly isn't an appetite for growth.
Our constraint is that we are insistent on hiring only the best and the brightest creative talent throughout our organization. Those people are hard to come by. And, if we can grow even more rapidly, albeit in a disciplined way, that will allow us to develop and launch even more property based on our existing franchises and based on new franchises. So that's a long winded way of saying, our cadences indeed change because the opportunity has changed. And our business now is diverse.
It includes not just frontline console products, it includes, numerous avenues of to recurrent consumer spending, whether that's a free to play title in China. The biggest of its kind were, mobile titles, headquartered in Barcelona or mobile titles, coming to you from 2K or massively attractive record breaking online title Grand Theft Auto Online. And that's without talking about what's to come because we don't know what's to come, but we're pretty optimistic.
Thanks, Strauss. Good luck guys.
Our next question comes from Raymond Stochel of Consumer Edge Research.
Can you talk about how you think about discounting within both for the game, Grand Theft Auto V, but also the in game currency. And have you had any changes recently? Please correct me if I'm wrong, but does seem like you were a little bit more promotional heading into the after hours update, but certainly that could be LTV driven. Thanks.
We don't typically spend a whole lot of time talking about our pricing profile. We the more successful our titles are, the more price leverage we have as you'd expect. And we've enjoyed a great deal of price leverage historically for his titles, when we need to be promotional, we are, I would say, you know, we're exceedingly judicious about physical inventory that we put into the marketplace. Which means that, you know, we're not under pressured any given time regarding our pricing policies. But beyond that, we probably we don't give much more color.
Our next question comes from Brandon Ross of BTIG. Please proceed with your question.
Hi guys. This is Mark Kelly on for Brandon. Thanks for taking the questions. Just a couple for us. On NBA 2K recurrent revenue was strong this quarter after a bit of a disappointment last quarter.
Can you just speak to the strength relative to expectations? And is there anything new visual concepts is doing in 2K 2019 to keep players interested throughout the NBA season?
Hi, this is Carl. So just to answer your first question, which I believe was about Q1. So we, as Lainie said, recurrences for spending on NBA 218 exceeded our expectations for Q1 and was down less than we had forecasted to be. And we believe that it has been affected by a couple of potential things. There could be some market competition out there also, other games that are in the market.
Visual Concepts certainly has plans to address, continuing to keep people being engaged in a meaningful way longer into the season. So I've got no specifics to share with you right now. But rest assured, visual conferences always working on improving that experience to drive engagement and ultimately which helps our economic situation. What was the second question?
Our next question comes from Ryan Guy of Barclays. Please proceed with your question.
Hi, good afternoon guys. Thanks for taking my questions. 2, if I may. First on mobile, there was an announcement this morning from Tencent about one of their studios developing a new mobile game based on a popular Western IP. And so with the announcement today of MDA 2K Online 2 launching for PC this fall over there.
I don't believe I heard anything on mobile or that that extends to mobile. So can you maybe talk about the opportunity for your MBA franchise, on mobile with Tencent, whether that's something you guys have considered or just maybe any observations around Sports on mobile over there? And then I have a follow-up.
Yes. We haven't announced anything. I think the notion of an a mobile title for NBA 2k in China or broadly in the rest of the world. Always interesting. We obviously have a title here.
So I think it's an interesting opportunity, but we haven't we haven't done anything yet to announce.
Okay. Fair enough. And then maybe thinking longer term, I know last end of last year, you guys announced the private division and then several projects to go along with those at that time. So I'm curious if there's any sort of update on any of those projects? And ideally, what's the realistic timeline that we might be able to see 1 or 2 of those come out?
And then kind of along those lines if you guys have any plans to add additional studios under that umbrella? Thanks.
Well, we've mentioned a number of the projects that are pending at Private Division. There are 4 of them pending. Right now, what we have in the marketplace is Kerbal Space Program, which we acquired which is doing really well. We don't have any releases from Private Division in fiscal 'nineteen, and more to come on Private Division, but we do have 4 titles of about which we're incredibly excited in development.
Our next question comes from Andrew Burkowitz of Oppenheimer And Company. Please proceed with your question.
Hey, thanks for taking my question, guys. If you could play Monday morning quarterback for a second and look at the success of GT Online, it seems like continually surprises you. Could you dig down a little bit and share what surprises you? Is it the number of people who continue to buy the game? Is it the number of hours they're playing or the amount they're spending?
And then as a follow-up, what have you learned from that that you think you could apply to, like Red Dead Online? Thank you guys.
So I think we'll do the old multiple choice answer for your first question, which is D, all of the above. The answer is yes. We attribute the long success to the fact that the the title just captured the imagination of the public and set a standard not just for our company, but for the industry of what a great video game ought to be. And, the online experience is so incredibly robust and allows you to do so many different things and it keeps people engaged on an ongoing basis and then Rockstar Games continues to drop extraordinary, unexpected content into the game. So, you're right.
It defied our expectations. Part of it is when we first released Grand Theft Auto5 and we had Grand Theft Auto Online on its heels, we had we had never done anything like that. We take 2. We rock start games. We've never done anything like that.
We didn't know what to expect. And the cadence of its ongoing extraordinary success too is new to us. Does it inform how we look at titles that come after? Well, naturally, it does. But the nature of our approach, collectively, specifically the nature of Rockstar Games approach, is never to be derivative and always to, shatter expectations.
And, my belief is that Red Dead Redemption 2 will shatter expectations and that the online experience also will be extraordinary, but unexpected And my view is that all great hits are by their very nature, unexpected. So that's the goal. You know, there's an expectation around the table here. Of course, there's an expectation, at Rockstar Games. And there's expectation of the part of consumers, but our job is to exceed those expectations.
And fingers crossed. That's what we're all setting out to do. And, we couldn't predict it and didn't presume to with regard to grant Theft Auto5 and we wouldn't presume too with Red Dead Redemption too. So we're just hard at work doing the very best job that we can.
Ladies and gentlemen we've reached the end of our question and answer session. I would like to turn the call back to management for closing remarks.
Well, 1st of all, thank you for joining us today. Secondly, I'd like to just say thanks again to to all of our colleagues, here in New York and all around the world. Many of them are involved and many of them are listening. We have, you know, we have the hardest working people in show business, and we think the very best and we're grateful to all of our colleagues for their extraordinary work that's reflected in these results. We're also great to our shareholders for your continued support.
So thank you for joining us today.
This concludes today's conference. You may disconnect your lines time.