Greetings, and welcome to the Take 2 Interactive Software Fourth Quarter Fiscal Year 2015 earnings conference call. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. Hank Diamond, Senior Vice President of Investor Relations And Corporate Communications for Take 2 are active. Thank you, Mr.
Diamond. You may now begin.
Good afternoon. Welcome and thank you for joining Take 2's conference call discuss its results for the fourth quarter fiscal year 2015 ended March 31, 2015. 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 Before we begin, I'd like 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 annual report on Form 10 K for the fiscal year ended March 31, 2014, including the risks summarized in the section entitled Risk Factors, and the company quarter we report on Form 10 Q for the fiscal quarter ended December 31, 2014. I'd also like to note that, unless otherwise stated, all numbers we will be discussing today are non GAAP. Please refer to our earnings release for a GAAP to non GAAP reconciliation and further explanation.
Our earnings release and filings with the SEC may be obtained from our website at www take2games.com. And now, I'll turn the call over to Strauss.
Thanks, Hank. Good afternoon, and thanks for joining us today. I'm exceedingly pleased to report that Take 2 delivered better than expected non GAAP earnings in the 4th quarter, marking an outstanding close to one of our best years ever. These extraordinary results were driven by the unparalleled creative excellence of our worldwide teams holiday lineups in Take Two's history added an important new franchise with the successful release of Evolve and achieved record digitally delivered revenue including our highest ever recurrent consumer spending. As a result of the significant cash flow generated by our business, At fiscal year end, we had approximately $1,100,000,000 in cash and short term investments.
Grant Theft Auto5 has continued to enjoy positive momentum, which began with the title's record breaking launch on PlayStation 3 and Xbox 360 in September 2013. Rockstar Games built on this unprecedented success with the release of the title on PlayStation 4 and Xbox 1 in November 2014, delivering the game the debated consumers and critics alike with major updates and new features, such as a series of view of a first person mode. And just last month, the title had another seller launch on the PC, which Carl will discuss. Grand Theft Auto5 was one of the most critically claimed in commercially successful video games ever, with sound of nearly 52,000,000 units. Moreover, Rockstar Games continues to drive ongoing consumer the each of our 4 other holiday releases outperformed initial expectations.
NBA 2K15 was the highest rated sports title of 2014 across console and PC based on average metacritic score. The title is sold in nearly 7,000,000 units to date and overall revenue was up substantially versus the same period for NBA 2K14, driven by both higher sales and growth in recurrent consumer spending. WW-two K-fifteen has sold in approximately 3 million units to date, up more than 40% versus the same period for WWE-two K-fourteen. Going forward, we believe there's a long term opportunity to grow this franchise substantially by further leveraging visual concepts development expertise.
Rounding out
our holiday lineup for Borderlands of Pre Sequel and Civilization Beyond Earth. Both of these titles were financial and profitable contributors to our results and their success demonstrates the enduring popularity of these key 2K franchises. In February, 2K And Turbo Rock Studios released our highly anticipated new intellectual property evolve. The title launched a positive reviews from influential critics such as IBM and game informer and has performed above our expectations with sell in to date of approximately 2,500,000 nearly 20% of which were digitally delivered. Consumers remain highly engaged with food evolved, playing more than 27,000,000 game sessions since launch.
Moreover, revenues have benefited from We expect Evolve to be a key long term franchise for 2K. In March, 2K and gearbox saw or launched Borderlands, the Hansom Collection, bringing the series to new gen consoles for the first time. The Hansom Collection launched positive reviews and sales have exceeded our expectations with more than 20% of units delivered through digital download. The Borderlands franchise has now sold in nearly 25,000,000 units, including over 8,000,000 units in fiscal 2015 alone. We continue to capitalize on delivered revenue increased by 42 percent to a new record of $616,000,000 or 37 percent of total non GAAP net revenue.
This growth was driven by full game downloads of our new releases and catalog along with the successful execution of our strategy to drive ongoing engagement with our titles. Recurring consumer spending increased 45% year over year and accounted for nearly half of our non GAAP digitally delivered revenue or 18% of our total non GAAP net revenue in fiscal 2015. Grand Theft Auto Online generated highest ever revenue in the fiscal fourth quarter and has both exceeded our expectations in the most single largest contributor to recurrent consumer spending in every period since launch. Sales of the game's virtual currency have been supported by Rockstar Games ongoing release of numerous free content updates, including heists, which launched in March. 18 sales grew nearly 85% year over year, benefiting from both increased online gameplay for NBA 2k15 and significant engagement than my MBA 2K15 companion on.
That notable add on content is an important contributor to ongoing engagement for many of our titles. This past year, we released successful offerings for Borderlands 2 and Borderlands the pre sequel, evolved, and WWE 2K15. Current consumer spending was also enhanced by NBA 2k Online, our free to play basketball game launched in partnership with Tencent in China. The title continues to generate growing revenues and high profit margins and currently is the number one PC online sports game in China with over 25,000,000 registered and we benefited from strong engagement with WWE SuperCard, which has been downloaded nearly 7,000,000 times Dave and it takes who's most financially successful free to play mobile offering. Driving ongoing engagement with our titles is a key strategic focus for our organization station.
We're only in the early stages and recurrent consumer spending remains a significant high margin growth opportunity for our business over the long term. During fiscal 2015, we released 10 offerings for tablets and smartphones across a variety of young These include a catalog title such as Bireshock, new releases such as NBA 2K15, and Sid Meier's Starship, and companion apps such as my NDA 2K15 and Evolve Hunter's Quest. As mobile devices, particularly tablets become more powerful and increasingly ubiquitous there will be even greater opportunities to leverage our portfolio and deliver AAA Entertainment experiences to an even wider audience. In addition to our creative and operational excellence, Take 2's results have benefited from the better than expected performance of the new console cycle, According to IDG estimates, the global installed base of NewGen consoles currently exceeds 34,000,000 units and is projected to reach 50,000,000 units by the end of this year, 110,000,000 units by 2019. This robust growth is a win at our backs and represents a significant long term opportunity for our business.
As a result of our strong cash flow, we have ample capital to pursue a variety of investment opportunities. I'm pleased in the company's financial outlook and commitment to return additional cash to shareholders through opportunistic share repurchases. Fiscal 2016 is off to an excellent start and our outlook reflects another year of substantial non GAAP profits and positive cash flow. We expect to deliver these results with fewer new releases than in fiscal 2015, anchored by proven franchises launch of an exciting new intellectual property, Battleborne, and an array of innovative, digitally delivered offerings designed to delight audiences and drive recurrent consumer spending. We'll also continue to invest aggressively in our long term development pipeline in order to broaden our portfolio and deliver growth and margin expansion in future years.
Our strong earnings and positive outlook underscore the Take 2 is a very different organization today than in early years of the last console cycle. Company has been transformed into a global interactive entertainment enterprise with the industry's top creative talent, a diverse portfolio of industry leading franchise and a solid financial foundation. We're better positioned than ever to deliver non GAAP profits every year for the foreseeable future and returns for our shareholders over the long term. I'll now turn the call over to Carl.
Thanks, Travis. I'd like to begin by congratulating our teams for delivering an incredibly strong year. Successful execution of our strategy, the results of which will continue to benefit our company on the long term. As Trusted earlier, fiscal year 2006 team is off to an excellent start. On April 14, Rockstar Games successfully brought its record shattering kit Grand Theft Auto5 to the PC The title has outperformed our expectations.
With more than 75% of units delivered through digital downloads and have had the highest number of concurrent users for a non valve title in the history of Steam. At launch, PC gamers were able to access the vast open world of Grand Theft Auto Online, including all of its previously released content and the widely bought at Hyatt. We are experiencing strong consumer engagement with Grand Theft Auto Online across Console and the PC and Rockstar Games plans to continue to support the title with the ongoing release of free additional content. Also on April, 2K brought WWE video gaming to the PC and mobile platforms for the first time ever, with the release of WWE 2K15 for PC and WWE 2K for iOS and Android. WWE's 2k15 for BC enabled gamers to experience all of the in ring actions of the new gen console games on their computers.
WWW 2K for IOS and Android provides lifelong action on the go and offers players a variety of popular superstars game modes and more in a premium mobile format. Late last quarter, 2K and TurtleRock Studios released the first add on content for Evoque, including the 4th playable Monster, The Hemet, 4 new playable hunters, Aphria driven mode and more. Building on the success, we will continue to support you all with additional content throughout fiscal 20 16, including a new monster, additional hunters, and an exciting new game mode. In addition, 2K, total rock studio and electronics sports league last month announced the Evolve proven ground tournament. Exclusively on Xbox 1, this global contest allows players to compete and qualify and rejoin them culminating with a global finality in Los Angeles during the week of June 15, where the top teams will be vying for a $100,000 prize pool.
I now like to discuss our pipelines for the remainder of fiscal 2016. Today, 2K announced Sid Meier's Civilization beyond Earth rising tide, a thrilling in-depth expense impact from a serious career for access games, which is scheduled for release this fall. Wisingpad extends beyond our new frontiers on a planet's surface and beneath its seas, adding even more to as a diplomatic option as players continue to build a new vision for the future of humanity. Also this call, we plan to release new annual versions of NBA 2K and WWE 2K, which promised to once again capture the passion of their dedicated friends and set new benchmarks for realism and authenticity. We'll also enhance our track record of launching successful new IT with the release of Battleborn.
Currently in development for PlayStation 4, Xbox 1 and the PC by Borderlands's creator's earbox software. Battlemore is a first person shooter with a deep roster of unique playable heroes. Through the game's accelerated character growth system, every hero can be fully experienced in a single story mode mission or multiplayer match. Next month, BattleForm will be E3 in a big way and we will have more news to share about the title acquired to the show. In addition, consumers can look forward to the upcoming announcement of a new AAA title from 2K, which is planned for release in fiscal 2016.
In keeping with our focus on driving ongoing engagement with our titles, we plan to support virtually all of our recent upcoming releases with value added offerings designed to drive current consumer spending. We'll also continue to execute our successful strategy of bringing online games to Asian markets, Garrett and Angel will soon get to experience civilization online. Our free to play mass multiplayer online games is being developed in partnership with renowned South Korean based studio XL games. Civilization online is planned for commercial launch in Korea during fiscal 2016. And Tuesday recently announced the publishing deal was game 1st to bring the title to Taiwan, Hong Kong and Macau.
Online games in Asia represent an enormous market opportunity and we'll continue to invest to expand our initiatives in this area. Next month, 2K will have a significant presence at E3 where many of our upcoming releases will be on play. We welcome you to stop by our booth and see firsthand how we intend to continue to deliver the most innovative, creative and engaging titles in our industry. I'll now turn the call over to Laine.
Thanks, Carl, and good afternoon, everyone. Today, I'll review our results for the fourth quarter fiscal year 2015. And then discuss our outlook for the first quarter of fiscal year 2016. All of the numbers I'll be providing today are non GAAP and all comparisons the year over year, unless otherwise stated. The press release provides reconciliation of our GAAP to non GAAP measurements.
Starting with our 4th quarter results, Net revenue grew 83 percent to $427,700,000. This result was in line with our outlook range of $1410 to $1416,000,000 as the negative impact of moving along to SSO5 for the PC was offset by stronger than expected revenues from Grand Theft Auto5, Grand Theft Auto Online, Borderlands to Hampton Collection and Evolve. Digitally delivered revenue grew 66% to $202,500,000, 54% of which was derived from recurrent consumer spending, which increased 47% year over year. The largest contributors to digitally delivered revenue for Grand Theft Auto, MEH 2K, and Evolve. Cadillac South accounted for 78.3 dollars of net revenue, led by the Grand Theft Auto And Borderlands Series.
Gross margin increased slightly to 47.8% Operating expenses were $125,000,000, up by $36,700,000 due to higher marketing expense for our fourth quarter releases and higher expense and interest and other expense was $1,600,000. Tax expense was $23,600,000 and non GAAP net income increased to $54,300,000 or $0.49 per share, up from $21,500,000 or $0.21 per share, in the prior year's fourth quarter. This result exceeded our outlook range of $0.15 to $0.25 per share due primarily to higher than expected digitally delivered revenues and the timing of marketing expense. On a GAAP basis, we reported net revenue of $300,100,000 and net loss of 242 $800,000 or $2.99 per share. Turning now to our full year results.
Net revenue was 1,670,000,000 dollars versus $2,400,000,000 in fiscal 2014, which had benefited from the launch of Grand Theft Auto V on PlayStation's rate on NextOS 360. The largest contributor of Grand Theft Auto 5 and Grand Theft Auto Online, NBA 2K15, WWE 2K15, and Evolve. Digitally delivered revenue grew 42 percent to $616,000,000, 49 percent of which was derived from recurrent consumer spending, which increased 45% year over year. The largest contributors to digital sales were Grandpa Auto and the ACK, Borderlands and Sid Meier Civilization. Gross margin increased to point 9 percentage points to 48.4 percent due primarily to a higher mix of digitally delivered revenues.
Operating expenses of $498,200,000, up by $29,700,000 due to increased personnel expense from a higher headcount higher research and development expense and increased depreciation expense, which were partially offset by lower selling and marketing expense. Interest and other expense was $9,900,000, tax expense was $80,200,000 and non GAAP net income was $119,200,000 or $1.98 per share as compared to $510,700,000 $4.26 per share in fiscal 2014. On a GAAP basis, we reported revenue of $1,080,000,000 and net loss of $279,500,000 31, 2015, as compared to December 31, 2014. Our cash and short term investments balance increased to $1,100,000,000. This decrease placed to net cash of approximately $9.60 per share, which includes a potential dilution from our convertible notes.
Our accounts receivable balance decreased to 2 $17,900,000, primarily reflecting collection of receivable. Inventory decreased slightly to $20,100,000 and software development costs and license decreased modestly $287,700,000. Now I'll review our financial outlook for the first quarter fiscal year 20 teens, which is provided on a non GAAP basis. Starting with the fiscal first quarter, we expect net revenue to range from $325,000,000 as we mentioned in $2,000,000 and net income ranging from $0.25 to $0.35 per share. The majority of revenue is expected to come grant Theft Auto5 and Grand Theft Auto Online, NBA 2K15 and evolve.
We expect gross margins in the upper 40s. Total operating expenses are expected to increase by approximately 27% due primarily to higher marketing expense and higher research and development expense. Non and marketing expense is expected to be about 14% of net revenue based on the midpoint of our outlook range. Our first quarter outlook also reflects interest and other expense of approximately $2,000,000, tax expense of $11,000,000 and weighted average fully diluted shares of approximately $14,000,000. Interest on the convertible notes net of tax is $1,400,000, which should be added back to net income to calculate net component care.
Turning to the details of our full year outlook. We expect net revenue to range from $1,300,000,000 to $1,400,000,000 and net income to range from F-thirty 5 to Grand Theft Auto Online, NBA 2K-sixteen, Balaborn, WWE 2K-sixteen Evolve and assumes the announcement title from 2K. We expect the revenue breakdown from our labels to be roughly 65% from 2K and 35% from Rockstar Games. We expect the geographic revenue split be about 55% United States and 45% international. We expect gross margins in the mid to upper 40s.
Total operating expenses are expected to increase by approximately 3% driven primarily by increased personnel expense from a higher headcount at our development studios, higher research and development expense and increased depreciation expense, selling and marketing expense is expected to be about 17 percent of net revenue based in the midpoint of our outlook range. We project interest and other expense of $800,000, tax expense of $35,000,000 and weighted average fully diluted shares of approximately $114,000,000. Interest on the convertible note net of tax is $5,600,000, which should be added back to net income to calculate net income per share. We expect our operations to generate after fiscal 2016 to be approximately cash flow neutral during the first quarter. Building on the momentum of one of Casey's best year ever, fiscal 2016 is poised to be another strong period for our company.
Our ability to continue to generate meaningful non GAAP profits resulted from our consistent delivery of the highest quality interactive entertainment initiatives with our industry leading creative assets and ample capital Safe2 is well positioned to deliver growth and margin expansion over the long term. Thank you. Now I'll turn the call back.
Thanks, Carl Maney. On behalf of our entire management team, I'd like to thank our colleagues for delivering another exceptional year and enhancing further our long term potential. To our shareholders, I want to express our appreciation for your continued support. And now what we'd like to do is take your questions. Thank
you. You. Our first question is from Ben Schachter of Macquarie. Please go ahead.
Guys, congratulations on a good year and the guidance for the coming year. Few questions here. 1, the Rockstar pipeline, how should we be thinking about that? Are you focused trying to get 1 new release per year. Is it gonna be more sporadic?
Any color there would help. And then if we can drill down a bit into the recurring revenue, I assume it's mostly coming from the console, but is it 90% console and then PC and mobile are relatively small or is it more evenly distributed between console and mobile and PC? And then finally, Lainie, can you just remind us how the revenue recognition works for the 2 drivers of recurrent on console? Is it net or gross on mobile? Is it net or gross in And how does the revenue recognition work from NBA in China?
I know a lot, but thanks.
Hey, Ben, it's Strauss. Thank you very much. And we really appreciate it. In terms of, the question about Rockstar. They're hard at work on the pipeline.
You know, they make their announcements when, when, have something coming up and, you know, this, the results of GTA 5, I hope, speak for themselves. I just want to note, there is a difference in the rock star of today and the rock star of a few, years ago because we have this ongoing entity, GTA online, and that is a living, breathing, ongoing entity that's continuing to deliver revenue and profits for the organization So that's going on as we speak and that's going on as their pipeline build through ongoing development. We're probably not distinguishing between our expectations for console and PC. I think that was your second question. And Lainie, take you for revenue recognition policies.
I think you specifically called that NBA 2K Online in China.
Yes. So for NBA 2K Online in China and most of our mobile and digital revenue, it's all booked on a net basis and our physical products are, on a gross basis.
Okay. Next question, please.
Thank you. The next question is from Mike Olson of Piper Jaffray. Please go ahead.
All right. Thanks. Good afternoon. Couple of questions. You indicated that NBA 2k was up substantially year over year.
Would you attribute that growth to a larger NextGen console installed base, but growing player base for that particular, as it continues to have strong reviews, the growth of interest in the NBA or some other factors are kind of all of the above. And then, secondly, you mentioned on Evolve, 20% full game downloads there. Is that what you, kind of anticipate you'll see for kind of all your future releases? Or is there any reason why that was an anomaly at that high above percentage?
Hey, it's Strauss. Thanks. Look, the MBA, the answer is to your question, all of the above. You know, we obviously are seeing robust growth in new gen consoles and the title continues to get better and better and the audience continues grow, and we hope that'll continue. And our virtual currency sales are also meaningfully up year over year.
So it's initial engagement and ongoing engagement, which is reflected in recurring consumer spending. And in terms of what percentage of our revenues are reflected by digital distribution, we really aren't making projections like that, but I think what you're seeing here digitally delivered revenues continue to grow in importance for our company. In the past fiscal year, it was about 37% of our non GAAP net income, sorry, non GAAP income. And, about half of that was recurrent consumer spending, a business line that didn't even exist for us. 4 years ago.
So it's pretty much good news across the board. And digitally delivered revenue is indeed higher margin for us. So our gross margins are now knocking on the door at 50% fiscal year. That's great news indeed.
All right. Thanks a lot.
Thank you. The next question is from Eric Handler MTM Partners. Please go ahead.
Yes. Thanks for taking my question. A few questions for you. First, continuing on the NBA questions, I'm just curious over the last couple of years, have you seen, a larger growth or maybe as the percentage of total revenues for international for that title increasing as the NBA continues to grow globally. Also in terms of for Lainie, with guidance in terms of phasing.
I don't know how much you're willing to provide right now, but it looks like you're going to have a good first quarter. Second quarter looks a little sparse in terms of new releases and you'd look okay for 3rd and 4th quarters. Is it reasonable to think that 4th quarter 2nd quarter is probably your low point, maybe, EPS losses for that quarter and the rest of the quarters seem that they should be profitable. And then, last, with taxes, are you guys a full taxpayer now? How do we think about your tax rate overall?
Yeah, we are this is Strauss. We are seeing nice growth in international markets for NDA and that is, something we team that 2K has really focused on, and I think you'll continue to see focus on, Rainy?
So for the guidance of fees, we're only asked for Q1 right now. So we're not talking about the rest of the quarters. And for taxes for the full year, we're seeing a tax rate of about 27%, which is similar to what we saw last year. That can change in vary from quarter to quarter based on discrete items and reserved and also NOL usage. And we are a full taxpayer, but we do have some NOLs still in the U.
S. To use and foreign. So $70,000,000 in the U. S. Then about $22,000,000 in borrowing NOL.
Thanks a lot.
Thank you. The next question is from Drew Crum of Stifel. Please go ahead.
Okay. Thanks. Good afternoon, everyone. So, Charles, I think you mentioned the Grand Theft Auto Online a record quarterly result. What do you attribute that to and what can you do to keep that momentum going as you look ahead?
And then as far as fiscal 2016 guidance is concerned, what are you contemplating or assuming in terms of digital? Should it be up? Should it be down for the year? Any common are you there? Thanks.
Yes. In terms of GTA Online, I think you're seeing a reflection of gen growth and you're also seeing the reflection of the heists content. So I think that's probably what's driving engagement the focus is on driving consumer delight. The numbers come from that. And I'm sorry, can you clarify your second question?
What are you assuming as far as digital is concerned? I mean, that's been a growth piece for the company, the last several quarters, should it be up in fiscal 2016? Are you willing to comment on that?
We expect digitally delivered revenue to grow in fiscal 20 16, both in dollars and in percentage of total revenue. The growth will be driven by increased full game downloads, which will offset a modest decline in revenue from recurrent consumer spending. We digitally delivered content for both traditional and emerging platforms to represent an important component of our strategy to draw growth and profits. And we expect to see to look digitally deliver revenue to grow significantly over time.
Got it. Okay. Perfect. And one last question. Is there any share repurchase contemplated in the $75 to a dollar guidance you provided.
No, it's not.
Okay. Thanks guys.
Thank you. The next question is from Justin Post of Merrill Lynch. Please go ahead.
Great. Two questions. First, GTA has been phenomenal success, 52,000,000 units. Can you help us at all understand how many people are of online or playing online right now. Any any thoughts on the conversion there?
And the second, pretty big buyback here. Kind of wondering why you went ahead with that now? Was it kind of getting better visibility on this year or what kind of prompted that decision now? Thank you.
Yes, we're actually not giving out any metrics on GTA Online in terms of player engagement. Obviously, we have a lot of data but this line of business still remains relatively new for us. So we're not sharing it at this time. And in terms of the buyback authorization and is indeed only an authorization. That's a reflection of our cash position, which is better than obviously than our original guidance was.
Thank you.
Thank you. The next question is from Brian Fitzgerald with Jefferies. Please go ahead.
Thanks guys. A couple more on GTA. I think you said the digital download percentage was 75%. So just wanted to clarify that. And then with with the GTA 5 PC launching at the end of the quarter.
I'm curious what type of demand you're seeing extending beyond, June, if you will. And then in terms of the online engagement, I know you weren't talking too much about that, but did the PC launch impact trends positive or negative negatively anywhere there?
Yes, the the it's not in the quarter obviously. So, we launched GTA for PC in the first quarter of the new fiscal year. In terms of GTA, digital at 75%. Yeah, for the PC, that was PC only to clarify. Does that answer your question?
Yes, yes, it does. Thanks.
Okay.
The next question is from Arvind Bhatia of Stearn AG. Please go ahead.
Thanks for taking my question. I wanted to understand your guidance a little bit better, in the context that, last year you provided what in hindsight was very conservative guidance. And, and, I want to congratulate you because that's, you know, it's a high class problem to have. You had several products that provided upside As you look out to fiscal 'sixteen, your guidance seems similar. And, last year was GTA5 on NextGen.
As you look at this here, you have, Battle Born and you have GTA 5 and PC that you just launched to help us frame the upside potential, if you will, for this year relative to last year? And then, my second question is on GTA 5 on PC, the, the numbers on GTA 5, I think you gave last quarter or 45,000,000, now 52. Is that all primarily the PC, PC version or the the console version also continues to sell. Thanks.
And in terms of our guidance from last year, when we gave our guidance, that is where we thought that was our best estimate at the time when we gave numbers out. We had a very robust release schedule and everything seemed to lower our expectations, which was a fantastic result and shows in our full year actual. And if you, if you look at, you know, GBS DPA by NextGen in our numbers, the install base grew a lot stronger than we thought it would last year. And I think that also drove our numbers off as well as digitally delivered brings and our recurrent consumer spending. When we set our year right now, this is our best estimates based on what we know right now.
Of course, we're hopeful to see the same types of results, but there's no way for us to know that information now, which is why we're guiding to the numbers that we feel comfortable are best that one for right now and today. So for GTA5CC, in terms of that being the difference, is that as a the difference in the unit is driven by all the two consoles, NexGen, current gen as well as PC. And that's why you're seeing an uptick in the number on GPA 5 in general.
Okay. Thank you.
Thank you. The next question is from Doug Creutz of Cowen. Please go ahead.
Thank you. When you had originally launched geek gate 5, I I I believe that you had said that there was going to be some story based DLC content shipping eventually. And, obviously, we're over your past due gains launch. Is that still something that you have planned? And I I'm sure you're not gonna talk about timing, but something that's in the pipeline for you guys as well?
Thank you. No, we haven't discussed any story based, downloadable content. We did talk about the heist and they've been Malisa. But I I am correct in remembering that that you had talked about that around the launch of the game. We have we have different recollections.
Thank you. The next question is from Mike Hickey of The Benchmark Company. Please go ahead.
Hey guys, nice quarter. Thank you for taking my questions. Nice year too. The, I jumped on a little late drop. I apologize if you've answered this, specifically forgive me.
But for your your fiscal year guidance here looks pretty strong considering you don't have a rockstar game planned. It was deemed historically, we've been sort of conditioned for 1 delay released from rockstar every fiscal year. And of course, you have the PC port, but that was sort of delayed from 4. So I'm curious how you think about, the pacing, I guess, if you will, Rockstar Games and if something has changed from previous pacing expectations, follow-up?
Yes. Mike, actually, the question was posed before you joined the call. So, I'll answer it the same way, which is, you know, rockstar is hard of work on a number of upcoming titles. And remember, we now our world has changed and that we have the GTA online in the marketplace. And that's an ongoing activity of Rockstar and generates a lot of consumer engagement and it also generates revenue and profits on an ongoing basis.
So the world's a little bit different than it used to be. But make no mistake about it. Rockstar is hard at work on a lot of great stuff.
Asking something that's been asked. The, I know you haven't provided too much information on GTA online But if you would, I'm sort of curious on how you think about online sales to trending for the remainder of the year. And I believe you you did guide the recurring category lower through your fiscal year. And if we should, I know you can't give too much visibility, Strauss. I hate to ask you a question can answer, but if we should anticipate the potential of another larger content release, maybe similar to HEISS to keep player engagement for your for your online business.
We have little because GTA Online is unlike anything else, we have little visibility on how long it will continue. It's trend of growth. Therefore, for purposes of this year's outlook, we assume no growth in revenues from GTA for fiscal year 'sixteen.
And are they still engaged in driving additional content for the online strongs or is it?
Yes. Mike, we do expect to see additional content and updates for ETA online.
Okay. All right. Thanks guys. Best of luck.
Thank you. The next question is from Ben Schachter with Macquarie. Please go ahead.
Hi, thanks for the extra questions. Strauss, I just wanted to go back to something you said at the beginning of the call about the company being so different than it was at the beginning the last console cycle. Aside from the obvious success of GTA, can you just talk a bit about what has changed over this user? Because it clearly is a much different and a much better company than it was a long time So what do you think is really driving that
indication of our product lineup. So every year since 2007, the company as a whole has launched at least 1 new significant intellectual property. And today, we have 10 titles that have each sold over 5,000,000 units for an individual release and over 40 titles that have sold a million units. Pretty amazing and I think really industry leading. And of course, some of the largest titles in the industry.
One of the other changes is a significant focus on Asian and International markets. Of course, the growth in our basketball business and our sports business and the emergence and growth of recurrent consumer spending across a number of categories. So not just GTN line, which is obviously very, very meaningful, but also MBA 2K, MDA 2K Online in China and the like. So the company has been transformed from a geographical point of view, from a product point of view, from the channel point of view, and from the way in which we address the consumer. And let's not leave out the transition of the industry and ourselves.
Digitally delivered revenue, which has had a knock on effect to the good for our gross margin, which is now around 50% in this past fiscal year, which is a very high gross margin indeed. So pretty much across the board, we've been transformed. Our balance sheet has also been transformed $1,100,000,000 in cash right now and we account for our convertible debt will be satisfied with equity. So effectively that's $1,100,000,000 in net cash.
Okay. Thanks. It's good to see the progress and good luck this year.
Thank you. The next question is from Arvind Bhatia, Sternacci. Please
go ahead.
Thank you. Just a quick follow-up. I'm wondering if you could talk about your development plans for the PlayStation 3 and 360, how many SKUs you think you might have this year and then just the plans, you know, point forward And also the unannounced title from 2 k, the the I think the adjective as soon. Should we expect E3 potentially to be that timeframe? Thanks.
Hey, Arvin. It's Carl. In terms of plans for the TS3 and 360, we're currently planning through NBA and WWE again on those platforms, as well.
What was the second question? It was on an outside for a second. Are we going to learn more to do?
Yeah. We will, you'll learn more when we, when
we, we'll, we'll, we'll, you'll learn more when
we, when we, we'll, we'll take it out with it. Okay.
Thank you. The next question is from Stephen Ju of Credit Suisse. Please go ahead.
Okay. Thanks very much. So, Strauss, as you think longer term about the continued transformation. Take 2 is saying, I mean, you've chosen to engage with the APAC market consumer through distribution partners. You have no choice to do so, but with the Chinese market, but every other market globally is probably going to be fair game for you guys to establish a direct relationship with the consumer.
So where do you stand on direct versus partnership driven at this point?
Thanks, Steven. It's a great question. Look, the Asia Pacific market is a very significant area of focus for us. We done meaningful amount of development there. We've launched titles there.
We have a title MDA 2K Online, which generates monthly revenue and profits for us. Been a great piece of business for us. And as you correctly pointed out, we worked with strong partners for much of the region. Now we are a publisher in Japan, although we have distribution partners there as well. And I think in the past, what you saw was a real allergy to any kind of financial risk.
So we entered the region focused on how we could mitigate business risk and financial risk. And I think now we feel a little bit more confident about financial risk. Because we have a good deal of experience with free to play games and massive multiplayer games and a good deal of experience in the region. In fact, I just got from a trip to the region a little over a week ago with some of my colleagues here. So, which is a relatively common occurrence from So we're feeling better about how we operate there.
And as you know, we're we're a team that knows what we don't know when we like to learn things and we're very disciplined, as we enter new markets and new lines of business. So in terms of what that means going forward, It varies market by market. I think in the Chinese market, as you know, is pretty likely that we and our competitors are going to have local, strong low partners because the media business is an area of meaningful focus for the Chinese government and they really want us to work with strong local partners. I don't really see that changing, but it doesn't interfere with our activities. In fact, to the contrary, I think it promotes our activities in to be exceedingly strong partners for us.
So I think we're lucky in that way. In some other parts of the region, we absolutely do the ability and it would make sense to go direct. So that is a possibility, but we, we really don't mind sharing. We're focused on getting the very best possible result. And we're focused on delivering the highest quality content to consumers.
And in certain instances, that means it behooves us to work with strong local developers and or distributors.
Thanks, Strauss. Thank you.
At this point, I would like to turn the conference back over to management for additional or closing remarks.
Thank you very much for joining us today. We're obviously really proud of the results that we as a company generated in the last fiscal year. I just want to take a minute, to, to thank our creative teams, our creative teams generate these results and the way they do so is by following their passions. And we try to create an enterprise that makes it not only safe for them to do so, but gives them all the resources they need to follow passions. It's what we think about every day.
And, you know, the goal of this enterprise is to be the most creative, the most innovative, and the most efficient, And this past fiscal year, I think, reflects the fact that we got closer to that goal, than ever before. And we're proud of that we aim to do even better going forward So thanks for joining us. We really appreciate it.
Thank you. Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time, and thank you for your participation.