Greetings, and welcome to the Take 2 4th quarter fiscal year 2013 earnings call. At this time, all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Hank Diamond, Senior Vice President of Investor Relations And Corporate Communication for Take 2 Interactive.
Thank you, Mr. Diamond. You may begin.
Good afternoon. Welcome, and thank you for joining Take 2's conference call to discuss its results for the quarter fiscal year 2013 ended March 31, 2013. Today's call will be led by Strauss Zelnick, Tateau's Chairman and Chief Executive Officer Carl Sladoff, 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 the statements made during this call that are not historical facts are considered forward looking statements under federal securities laws, These forward looking statements are based on the beliefs of our management as well as assumptions made by information currently available to us.
We have no obligation to update these forward looking statements. Actual operating results based on a variety 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, 2012. These documents may be obtained from our website at www.take2games.com. 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
www.take2games.com for a GAAP to non GAAP reconciliation and further explanation. And now, I'll turn the call over to Strauss. Thanks, Hank. Good afternoon, and thanks for joining us today. I'm pleased to report that Take 2 delivered strong revenue growth and solid non GAAP earnings for the fourth quarter fiscal 2013.
These results were driven by robust demand for our new releases, catalog titles, and expanding portfolio of digitally delivered offerings. While many in our sector have faced serious challenges, we continue to benefit from a focus on our core strategic values. Creativity, innovation, and efficiency. During the past year, our world class creative teams released some of the industry's most captivating and groundbreaking entertainment experiences. Our unwavering commitment to quality enables our titles to attract and delight audiences, time and time This results in near term hits and sustainable catalog value, which create ongoing profits and long term returns for our shareholders.
Fiscal 2013 began with the release of Rockstar Games Max Payne III. This gritty action packed 3rd person shooter received excellent reviews and introduced multiplayer gameplay for the first time to this popular franchise. The title delivered Rockstar's signature cinematic style of action and storytelling, while redefining the genre, with revolutionary advances in targeting and animation. Max Payne 3 is sold in over 4 million units to date and continues to attract new fans. Order lens 2 remains on track to become the highest selling release in the history of two k with approximately 6,000,000 units sold into date and counting.
Title received fantastic reviews, yielding a 90 average metacritic score, and won more than 55 editorial awards. Borderlands 2 was the largest contributor to our digitally delivered revenue last year based on high demand for the game's innovative downloadable add on content as well as full game downloads. NBA 2k13 won more than 38 editorial honors, including numerous sports game of the year awards, and quickly became the most profitable sports title in the history of 2K. This is the 12th consecutive year in which we delivered the top ranked NBA simulation game. And the 3rd consecutive release of the franchise to sell in more than 5 million units.
The performance of NBA 2k13 has been enhanced by record digital sales for the franchise including virtual goods. The team of visual concepts continues to raise the bar for excellence with each annual release of the series. X Tom, enemy unknown, reimagines 1 of the industry's most beloved franchises as a unique turn based strategy game. Developed by 2 Ks for Access Game Studio, Xcom enemy unknown was one of the highest rated releases of 2012, achieving a near 90 average metacritic score and winning an impressive 18 game of the year awards. The title has generated particularly strong digitally delivered sales, and it's opened the door for future brand extensions, which Carl will discuss.
We wound up the fiscal year with the eagerly anticipated launch of BioShock Infinite, the highest rated with the associated press calling it, quote, a new standard for video game storytelling and NBC News declaring it a masterpiece. The title is already a commercial success with over 3,700,000 units sold into date and record 1st month sell through for the franchise. BioShock Infinite will be supported by an array of downloadable add on content, and we're already seeing solid attach rates for its season S. I'd like to congratulate Ken Levine and the team at irrational games as well as the team at 2K. For turning this launch into a major tentpole event for our company and the industry.
I'd like to take a moment to commend everyone at 2 K consecutively launching 4 of the past year's most critically acclaimed titles. That's simply an outstanding achievement. It bears noting that since its founding in 2005, 2 K has flourished to become a home for some of our industry's top talent and most important franchises. Moreover, 2 K's success has played an integral role in our diversification, growth, and ability to deliver consistent profits. Our fiscal 2013 results also benefited from robust sales of catalog titles, particularly Rockstar Games iconic Grand Theft Auto Four, and Red Dead Redemption, as well as the profitable release of Major League Baseball 2k13.
In addition to delivering stronger financial results, we continue to execute on our strategic objectives during the past year. We further diversified our business across distribution channels, expanded our offerings for new platforms and geographies and enhanced our portfolio of industry leading franchises. We remain keenly judicious and analytical in our approach, mindfully balancing increased risk with increased reward. To that end, we expanded aggressively to our growth and profitability. Most of our new 13 AAA releases are being supported by innovative downloadable add on content.
We're also now receiving high margin revenue from in game purchases of virtual goods, both in frontline titles such as NBA 2k13, and in mobile and online titles, many of which are free to play. During fiscal 2013, we generated record digitally delivered revenue, which accounted for 22% of our total. We've broadened our mobile slate with core releases including Max Payne Mobile, Borderlands Legends, NDA 2K13, and Grand Theft Auto vice city. Casual releases such as heard, heard, heard, and grid block, and our first mobile social game for Japan, NBA 2k All Stars. We continue to believe that interactive entertainment for mobile platforms, especially tablets, represents an important emerging growth opportunity, and we have numerous projects in our pipeline some of which Carl will discuss later.
We've also made substantial progress developing online games for Asian markets. NDA 2K online developed in partnership with Tencent, launched commercially in China in October. Usage and player engagement with the game continue to gain momentum. And according to QQ games, it's now among the top 10 most played PC games in internet cafes in China. Pro Baseball 2K developed in partnership with Nexon Corporation, launched commercially in Korea on May 2nd.
The game offers an authentic Korean pro baseball simulation experience based on the MLB 2K engine. And finally, we revealed that the massively multiplayer online game that 2 K's developing in partnership with Excel games is based on our successful civilization franchise. Civilization online will release initially in Korea, and production is being led by online gaming luminary Jakesong. It's one of the most exciting and vicious online game development initiatives in the region. We're highly enthusiastic about the opportunity with a relatively stable exclusive worldwide rights to publish the popular WWE franchise across all major platforms and distribution channels.
We believe there is an untapped opportunity to further the performance of this profitable franchise by leveraging 2K's superb development and marketing resources, which have made our NBA 2k brand an annual hit. WW is already contributing to our results with WWE13. I'm pleased to note that 2013 marks the 20th anniversary of Take 2. And today, our company stands in a stronger position than any other time in our history. Although we've come very far, we believe that some of our most successful times are ahead.
Interactive Entertainment is a cyclical business. Our industry appears poised to enter an exciting growth period, driven by the upcoming launches of the next generation consoles, as well as the diverse portfolio of the highest quality franchises in the business, cutting edge technology, and strong balance sheet take to has all of the assets required to capitalize on these opportunities. Fiscal 2014 promises to be one of our best years ever, highlighted by the upcoming launch of Grand Theft Auto Five in September We also and releases from our proven franchises. In fiscal 2015 and for the foreseeable future. I'll now turn the call over to Carl.
Thanks, Charles I'd like to begin by giving an update on our recent releases and development pipeline for fiscal year 2014. As mentioned earlier, mobile gaming is an area of increased focus for our company. These offerings generally require much smaller development team's budgets and timelines than console uses. However, the passion and desire of rehired of our creative talent to captivate audiences remains a constant. I'd now like to highlight some of our recent upcoming mobile releases.
For Access Games, 2K's renowned studio behind our civilization and XCOM franchises has been hard at work on several new titles for the iOS enabled mobile devices. The first is haunted Hollow, a free to play strategy title, which can be enjoyed by families, strategy buffs and horror enthusiasts alike. The game launched on May 2nd and the response has been very positive with game sites such as Cataku Raving that, quote, 2K and Firaxis once their players to party. 2nd is Sid Myers Ace Patrol, an original title created by the legendary game designer himself, which immerses players in strategic World War I air combat scenarios. This free to play title released on May 9th and offers a high quality 3 d strategy experience that players expect from Sid Meier and Firaxis.
Anticipation for the title is high, with Wall Street Journal noting that Ace Petroleum marks one of Take 2's biggest steps in its effort to be common in influential player in the mobile market. And finally, we will release our critically acclaimed console and PC title, XCOM enemy unknown, for iOS Excom enemy unknown was one of the highest rated releases of 2012, and the iOS version will offer a full experience to mobile gamers. We'll have more mobile titles to discuss in the coming months. This year, we'll have several new downloadable add on content offerings for Borderlands 2 and BioShock Infinite that will further immerse players in these incredibly popular and successful titles. Consumers who took advantage of our season pass savings will be amongst the first to expand their experiences in Pandora and Columbia with even more gameplay content.
To date, we have announced new content launching for Borderlands 2 tomorrow and on June 25th. Building on the success of Sid Meier's Civilization V, Godsen King's expansion pack, which was released last summer, 2 K will release Sid 2 K will release Sid Meier's Civilization V brave new world on July 9th. This second expansion pack for the award winning civilization 5 will provide new depth and replayability through the introduction of international trade as well as a focus on culture and diplomacy. On August 20th, 2K Marin, the studio behind BioShock 2 We'll expand our successful XCOM franchise with the release of the Bureau XCOM declassified. Set in 1962 at the height of the Cold War This third person tactical shooter tells the story of the founding of the top secret XCOM organization.
We're very excited about end vision for this title, the result of which is a narrative driven experience that will challenge players unlike any other third person tactical shooter. Turning to what many in our industry are predicting to be the biggest and most important launch of the current console generation. Grant Theft Auto Five is on track for its planned worldwide release launch on September 17th. Rockstar Games released 3 new character trailers to an overwhelmingly positive response from both fans and media. In addition, 2 weeks ago, the game was demoed for press and resulting coverage has been exponential I'm sorry, exceptional.
It's worth noting that people are funding not only to the game's vast size and scope, but also to its innovative 3 character structure and height mission design, which offer immense opportunities for gameplay and storytelling that should raise a bar, not only for this franchise, but for all interactive entertainment. Rockstar Games continues to prove that they have the passion and skill to take meaningful creative risks with one of the world's biggest entertainment brands. We're confident that the team at Rockstar North is creating something genuinely special and look forward to the game's release in September. On October 1, NBA 2K14 will return to the hardwood and visual concepts is poised to once again raise the bar in sports gaming with a number one basketball video game franchise for more than a decade. In October 29th, 2 K will put gamers in the squared circle some of the biggest names in sports entertainment today with the launch of WWE 2K14.
The title promises to build on the successful franchise, which we recently acquired. I'd now like to take a moment to discuss the upcoming E3 show in Los Angeles. This year, our labels will not have a booth on the show floor. Both Rockstar Games and 2K have instead decided to focus their marketing and PR efforts on a series of events throughout the spring and summer. Our team, however, will be present at the show and we look forward to seeing many of you there.
As stated earlier by Strauss, today Take 2 is better positioned for consistent profitability than at any other time in its history. Best intellectual property portfolios in our industry, including 9 franchises with individual titles that have sold in 5,000,000 units or more. Building by our existing portfolio of franchises and ongoing initiatives to develop new intellectual property, we have an extensive pipeline unannounced core titles in development for multiple platforms, including NextGen consoles. We plan to support many of these releases with downloadable and on content and other incremental revenue opportunities. In addition, we have numerous titles in development for mobile and online platforms, which range from core gaming to more casual and social experiences.
And finally, we have our online initiatives in Asia, which are expected to contribute growing revenue and profits in 2014. In closing, I'd like to join Strauss in congratulating and thanking all of our employees for delivering such fantastic titles and results this year. We are highly optimistic about our long term outlook and are confident that our best days are still yet to come. Thanks. And I'd now like to turn the call over to Lane.
Thanks, Carl, and good afternoon, everyone. Today, I'll review our results for the fourth quarter full year fiscal 2013 and then discuss our outlook for first quarter full year fiscal 2014. All of the numbers I'll be providing today are non GAAP results from continuing operations in all comparisons or year over year unless otherwise stated. Our press release provides a reconciliation of our GAAP to non GAAP measure Starting with our results for the 4th quarter, net revenue increased 105 percent to $303,100,000 This exceeded our outlook range of $235,000,000 along with strong sales of catalog titles and digitally delivered offerings. Catalog sales accounted for 25 led by Grand Theft Auto 4, Red Dead Redemption And Sid Meier Civilization V.
Revenue from digitally delivered content grew 192% year over year and accounted for 27% of net revenue. The largest contributors who are offering support of Lands 2, BioShock Infinite, the Grand Theft Auto franchise, and NBA 2K13. In addition, continuing south of NBA 2k13 and borderlands 2, along with the release of Major League Baseball 2k13, also contributed meaningfully our 4th quarter results. Gross margin increased 27.7 percentage points to 49.6 percent due primarily to lower life expense as a result of the expiration of our previous contract with Major League Baseball. Operating expenses were approximately $105,000,000 of about increased to $2,900,000 due primarily to the absence of a gain on sale recorded in the prior year's fiscal fourth quarter.
And non GAAP net income was $42,900,000 or $0.38 per diluted share as compared to a net loss of $50,900,000 or $0.60 per share in fiscal fourth quarter 2012. This result significantly exceeded our outlook range of $0.10 to $0.25 per share. On a GAAP basis, we reported net income from continuing operations of $21,200,000 or $0.23 per share. Turning now to our results This significant growth was driven primarily by a robust slate of fiscal 2013 releases led by Borderlands 2, NBA 2K13, BioShock infinite and Max Payne 3, along with higher sales of catalog titles from the Grand Theft Auto franchise and record sales of digitally delivered content. Revenue from digitally delivered content grew 148 percent to a record $264,000,000, The largest contributors were offering for Borderlands 2, the Grand Theft Auto franchise and NBA 2K13.
Gross margin was 42.2 percent, up 5.6 percentage points from prior year. The increase is due to lower license expense resulting from the expiration of our previous contract with Major League Baseball, along with the strong performance of our fiscal 2013 releases. Operating expenses were approximately $467,000,000, up about $115,000,000 over the prior year. The principal driver was higher marketing expenses to support our larger slate of fiscal 2013 releases. Interest and other expense increased to $12,500,000 due to the full year impact of the convertible notes that we issued in November of 2011, and the absence of a gain on sale recorded in the prior year.
And non GAAP net income was $33,100,000 or $0.36 per diluted share as compared to net loss of $59,400,000 or $0.71 per share in fiscal 2012. On a GAAP basis, we reported a net loss from continuing operations of $31,200,000 or $0.36 per share. As previously disclosed, both our GAAP and non GAAP results actual obligation, which was recorded in the first quarter. Turning to some key items from our balance sheet, at March 31, 2013, as compared to December 31, 2012. Our increased to $189,600,000, primarily reflecting receivables associated with the release of BioShock Infinite near the end of the 4th quarter.
Inventory was relatively flat at $30,200,000 and software development costs and license is increased to $294,200,000, reflecting the development efforts around our pipeline of upcoming releases. Now I will review our financial outlook for the first quarter fiscal 2014, which is provided on a non GAAP basis. Starting with the full year, we expect to deliver significant growth in both revenue and earnings, driven by the launch of Grand Theft Auto V, which is planned for September 17, 20 team. Our initial outlook is for net revenue to range from $1,750,000,000 to $1,850,000,000 and net income to range from $2.05 to $2.30 per share. Turning to the details of our full 2014.
We expect the revenue breakdown from our labels to be roughly 65% from Rockstar and 35% from 2K. We expect our geographic revenue split to be about 50% United States and 50% international. We expect gross margins in the low 40s. Total operating expenses are expected support our release schedule. Sally and marketing expense is expected to be about 15% of net revenue based on the midpoint of our outlook range.
And we project interest and other expense of approximately $12,500,000, tax expense of about $11,000,000 and fully diluted shares of approximately 122,000,000 which includes 8,000,000 of participating shares for our unvested stock based compensation awards and 26,000,000 shares, representing the potential dilution from convertible notes under the if converted method of accounting. Turning to the first quarter, we expect non GAAP revenue to range from $100,000,000 to $125,000,000 and non GAAP net loss to range from $0.55 to $0.70 per share. The majority of our revenue in the 1st quarter expected to come from Grand Theft Auto franchise, BioShock Infinite, NBA 2K13, and Borderlands 2. We expect 1st quarter gross margins in the mid to upper 40. Total operating expenses are expected to decrease by approximately 26% from the prior year's first quarter, driven primarily by lower sales and marketing expense and the absence of the $15,000,000 one time contractual obligation recognized in the first quarter last year.
Selling and marketing expense is expected to be about 40% of net revenue based on the midpoint of our outlook range. First quarter outlook also reflects interest and other expense of approximately $3,000,000, tax expense of about $3,000,000 and a share count of approximately 87,000,000 In closing, we are pleased to have delivered 3 consecutive quarters of strong These results enable us to overcome our first quarter loss and deliver solid non GAAP earnings for the full year. I would like to join Strauss and Carl congratulating our employees on their outstanding creative and operational achievements, which make our financial results possible. We will continue to balance our creative drive with a disciplined approach to operational efficiency and capital allocation to drive long term returns for our shareholders. Thank you.
Now I'll turn the call back to Strauss.
Thanks, Carl and Lainie. On behalf of our entire management team, I'd like to thank our employees for their stellar work in delivering outstanding results this past year. And for setting the stage for what I believe will be one of the most exciting chapters in our history. And to our shareholders, I want to express our gratitude for your continued support and belief in our vision.
Thank you. Our first question comes from the line of Eric Handler with MKM Partners. Please proceed with your question.
Yes. For taking my question. I'm just I know you don't like to talk about specific gains, but if you could look in the aggregate, what type of uplift or the overall percentage of revenue that you are getting, from digital components of games like for Borderlands and BioShock. And all your other top games, the contributions you're getting from those, from the digital side there, or maybe also the the mobile uplift as well too.
You know, we don't disclose the breakout. We do talk about the fact that digitally delivered revenue in the quarter was 27% of our net revenue it's quite meaningful. But the reason that it's not, something we cover is it's really not relevant. Our view is that we should make our products available to consumers wherever they are however they want to receive it without regard to platforms. And whether something's delivered on a disk or femoral is really a detail and should be a detail for us.
We want to be
comes from the line of Ben Schachter with Macquarie. Please proceed with your question.
Hey guys, congratulations on the quarter and the year. Three quick questions for you. 1, thank you for the guidance post to FY14 and talking about FY15 and beyond. I think that's very helpful. Was wondering if you could just walk through what gives you the confidence to be able to give that guidance now?
And the second question is something I don't think we've talked about a lot publicly, but that's your cash balance. Historically it's never been that big. I was wondering if you could talk about what that cash balance may look like by the end of FY 2014 and any potential plans for that cash And then finally, the 1Q guidance, relatively low, especially given that BioShock had a great relief, wondering why the 1Q guidance might not be a little higher given potential orders on BioShock? Thanks.
So, Ben, in terms of the foreseeable future, our outlook is on a multi year plan, which currently projects ongoing profitability for the company. And then in addition, our development pipeline, which extends out even further, gives us confidence in our ability to be consistently profitable over the long term. So that's really what, you know, that that's, the backset number up. In terms of our cash balance, we don't, we don't share our projections for our cash going forward, but we do plan to be cash positive this year as you can see by our earnings. In terms of the use of the cash, it's really in line with how we look at our cash balance now.
And we look for opportunities for acquisitions, investing in our current pipeline or other titles that make sense for us as well as, in Asia, some of our online titles there. And then we also, we would look to do, you know, we we announced a share repurchase. And if that makes sense for us, we definitely would do that as well. Is there a question for me?
Just the Q1 guide, it just seems a little bit low relative to how strong the quarter ended, particularly with BioShock. Wondering why Q1 guidance couldn't be higher given potential for bioshock reorders and some other things that are going on in the quarter?
We definitely do have bioshock reorders scheduled for the quarter and the lifetime units, for that title, we definitely have increased our expectations for that. But we also have no major new titles releasing during the quarter. So a lot of the revenue was from our catalog, which has lower margins. And we also have some significant marketing costs for some future releases as well as for some already released titles in the quarter. Great.
Well, thank you and good luck.
Our next question comes from the line of Justin Post with Merrill Lynch. Please proceed with your question.
Great. I believe you said 65 percent of revenues in fiscal team from Rockstar, which equates to somewhere around $1,100,000,000 to $1,500,000,000. Can you, 1,100,000,000 to $1,150,000,000? Can you tell us what else besides GTA will be supporting that number? Do you expect a lot of catalog for Rockstar?
And then maybe, Strauss, could you tell us just kind of kind of presence you might have at E3, if any? Thank you.
On the 65% from Rockstar, it would be for the GTA release as well as strong catalog. And then for, for E3, he asked I'm
sorry. I missed that question. Justin, sorry. Can you repeat
that question regarding E3? Sure. Just kind of what kind of presence you expect to have this year and what's kind of your just overall philosophy towards that show of having a big presence? Thanks.
It's Justin, it's Carl. We do, we, as I said in my remarks, we don't plan to have a booth on the floor this year, but we will be there. 2K is Rockstar have other events, marketing PR events planned over the summer. So but our philosophy on the show is that we like the show. We participate in a meaningful way in the show.
It's a a great place for the industry to get together and we're highly supportive of it this year, just it makes sense for us in the same at the same level.
Our next question comes from the line of Mike Olson Junior with Piper Jaffray. Please proceed with your question.
Hey, good afternoon. One of the assumptions that many people make about transitioning a new console platforms is there'll be related uptick in a little bit more color on what's going on in terms of what's going on in terms of the expense for next gen consoles. And then another one related to marketing around GTA5 just any thoughts around kind of how you're going to be marketing it? And then maybe talking high level about the role that you think marketing plays in the industry today, given the sort of, concentration of big budget titles that we're gonna see arriving this fall and holiday. Thanks.
Thanks. We haven't talked specifically about development expense. You're right that historically as new platforms that enable new work or launch, development expenses have happened to you gone up. We're fortunate that we are also able to take our top quality titles and deliver strong revenues from those titles and therefore deliver profitability. So, one of our 1 of the 3 tenets of our strategic approach here is efficiency.
And we aim to be the most efficient company in the business, and that includes development spending. So it's a major area of focus for us. Our goal is to deliver the highest quality titles, and so the mark market them as effectively, if not more effectively than anyone else, which leads me to answer your question about marketing, Grand Theft Auto and other titles. And look, I'm really proud of our worldwide marketing and sales operation. I think over and over again, we've proven that that's major strategic asset, and there are only fewer than a handful of companies in the industry who have it.
Every time we release a a major title, we have to innovate, from because basically, when we market something in an innovative way, industry takes notice. And frankly, when our competitors do, we take notice. So, we have some tricks up our sleeve going forward. I'm not going to discuss them today. You'll see them as they unfold.
But, marketing is obviously a crucial part of what may us as successful as we have been and intend to continue to be.
Our next question comes from the line of Daniel Ernst with Hudson Square Research. Please proceed with your question.
Yes, good evening. Thanks for taking my call. Two questions, if I might. First, an observation, in your press release, you noted that Grand Theft Auto 4 continues to be a primary driver of catalog sales, which suggests to me that the the title of the franchise has a a lot longer legs than maybe one might expect. So My question on my grand theft auto is if you look at the suite of titles coming out after GTA, what is your can you just give us a sense of how you're thinking about DLC or add on content?
I mean, obviously, I'm not going to give a specific plan here, but sort of how you're thinking about keeping a business relationship with the customers that love your game after the the core game is launched. And then Second question on development expense. Also, if you look back 6 years ago, at this time, we didn't have an opportunity to put on titles like you guys produce a foot phone. And today there's a lot of platforms that maybe address what you do. What is the distribution of your R and D spend look like for next gen consoles versus supporting old gen consoles and versus mobile and how that kind of development budget if you have incremental dollar, you know, where does it go?
Does it go to mobile, or does it go to, you know, supporting, you know, kind of the core business? Thanks.
Yes. Thanks, Daniel. For our AAA releases of late, we've offered downloadable content for all of those release So clearly trying to keep customers engaged, trying to keep the, the games in their hands, and most important trying to delight our customers remains our primary focus. And the reason we've done as well as we have is that despite the up downs in the marketplace, you know, our scores remain high and we keep giving customers what they want. So whether that means, downloadable content, whether that means companion apps, on other devices, whether that means in game goods, whether that means free to play opportunities we're ecumenical.
We want to be where the customer is and, whatever device he or she uses, wherever he or she is, all over the world. That's our stated strategy, and we intend to keep on doing it. So, you know, we haven't made any specific announcements with regard to downloadable content for future releases. But historically, we have been there. In terms of development expense, we do not break it out among platforms.
As you'd imagine, our big console, tentpole releases are very costly compared to some of our other releases. But we have not broken out those line items.
Thanks.
Our next question comes from the line of Doug Cruz with Cowen and Company. Please proceed with your question.
Yes, thanks. I just wonder if
you could verify that the guidance you've given for fiscal 'fourteen is just predicated on the titles that you announced to date for before seeing that there's not anything, that's critical to that guide so you haven't announced yet. Thanks.
There are some unannounced titles in fiscal 'fourteen's guidance. However, they're not very material to the overall outlook for the year.
Our next question comes from the line of Mike Hickey with National Alliance Securities. Please proceed with your question.
Hey guys, congrats on the quarter. Thanks for taking my question. Just curious on rockstar, I didn't pay anything about one big game per year. We continue to think that's how they're going to perform here fiscal 'fifteen and beyond?
We haven't talked about how they're going to perform going forward But putting out one massive temple title a year takes an enormous amount of effort. And, it's worked very well with Rockstar so far.
Okay. And then, just curious, Strauss, what do you think on next gen software pricing? I mean, I preloaded GDA5 today at $60 pretty close to next gen consoles coming out. Do you think you're going to have a premium to where current gen is currently priced? Or how do you think that's going to impact current gen pricing, I guess, where I'm getting
The government doesn't take kindly to me talking about pricing. So we tend not to talk about our pricing. We do offer premium products.
Yes, you do. Okay. And then last question. Just curious, on WWE, obviously, it's always been from what I can tell pretty good game here. And I think it the marketing benefits a lot from the WWE.
I mean, what do you think strategically on that? Is there other drivers of ancillary products or something else you can do with it? And I'm curious kind of where the breakeven is on that game.
You know, we, we're really excited about being in business with WWE. You know, I was just at their massive event and it was extraordinary. I think there were 90,000 fans in the arena and it was raining. And, it's an amazing franchise that pleases the whole family and we're delighted to be in business with WWE. I, you know, we're working as closely as possible with the development team and with the WWE folks in Stanford.
And, our aim is to put out an A plus product and given a plus marketing that's utterly consistent with the franchise. We think the demographics are sound and growing, and we couldn't be more thrilled. As far as our financial expectations. And I think you know that generally speaking, we try not to enter into arrangements unless we're a good deal of confidence that they're going to be profitable.
Thanks guys. Good luck.
Our next question comes from the line of Brian Fitzgerald with Jefferies. Please proceed with your question.
Guys. A couple of questions on mobile platforms. Do you see any differentiation in terms of trends on Android versus iOS, maybe in emerging markets. And then as you think about marketing, around those products and around emerging markets. Is there can you give us any color on how that differentiates from your marketing programs for console based games?
Thanks.
Yes. I mean, we there are not mark by market, there obviously are trends, Android versus is IOS. IOS is a very powerful domestic platform. Android tends to be a more powerful international platform. But again, our strategy is to make our titles available for, for all these platforms, and to be ecumenical about it.
When we don't have to make a bet, we don't want to make a bet. Occasionally, we do, especially with regard to consoles, But with regard to the mobile platforms, we're pretty much able to support everything that's out there. As you'd imagine, our marketing expenses have to be tailored to the economic opportunity. The bulk of the effort economic opportunity that faces our company now is driven by our AAA console titles and the catalog related thereto. So that's where our marketing expenses go.
As mobile titles grow in importance, I'm sure we'll be competitive with our marketing spend. But we are not believers in the, if we build it, they will come strategy in business. We tend to be, a little more grounded than that. And our view is we want to make sure that there is a market and then we want to satisfy and delight the market. We do not see it as an opportunity for us to go build a market.
Great. Thanks, Krauss.
Our next question comes from the line of Steven Xu with Credit Suisse. Please proceed with your question.
Hi, Strauss. I see you mentioned that the upcoming new consoles in your release slate. Is there anything you can share in terms of the to port a game between platforms, you know, either down port or up port as you might think it's appropriate. And, do
you think it will be
a relatively straightforward process or something more time consuming based on the feedback from your development teams? Thanks.
Look, there's nothing straightforward about making what we hope will be standard bears of the inter of the industry. And there's no question that developing for what will be next gen will be complicated. And for the types of titles we do, we'll be costly. That said, we have a very strong balance sheet, and we align our business with our costs. And one of our 3 strategic objectives is to be the most efficient company in the business.
We haven't talked specifically about the cost profile of next gen releases, and we don't aim to do that now. But we are exceedingly mindful of costs And we are hopeful that over time, there will be some efficiencies as we support every platform that's out there, but it's our it's too early to say that that will be the case.
Mr. Zelnick, we have no further questions at this time. I would now like to turn the floor back over to you for additional or closing comments.
Well, thanks, everyone, for joining us. You know, we're thrilled to be able to deliver, such good news across the board, whether it's our last year, last quarter's results, last year's results, our guidance for this year or our outlook for the future. We're also pleased that our strategic initiatives are coming along. So effectively, we're grateful to our shareholders for their support. And first and foremost, to our creative teams, our marketing teams, our distribution teams, and the business teams that make it all happen.
So thanks very much.
Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.