Take-Two Interactive Software, Inc. Reports First Quarter Fiscal 2006 Financial Results
Company: Take 2
New York, NY – March 7, 2006 – Take-Two Interactive Software, Inc. (NASDAQ:TTWO) today announced financial results for its first quarter ended January 31, 2006.

Net sales for the first quarter were $265.0 million compared to $502.5 million for the first quarter of fiscal 2005 which included holiday sales of the blockbuster Grand Theft Auto: San Andreas for the PlayStation®:)2 computer entertainment system. Net loss for the quarter was $29.1 million or $0.41 per share, compared to net income of $55.2 million or $0.79 per diluted share in the prior year's first quarter. The Company's loss per share for the first quarter ended January 31, 2006 includes the impact of adopting SFAS 123®:), requiring the expensing of employee stock options beginning on November 1, 2005.

In addition to the challenging comparison to the strong sales of Grand Theft Auto: San Andreas last year, Take-Two attributed the lower first quarter results to continued retail weakness for video game software and lower retail pricing during the holiday selling season in both North America and Europe, as the industry began to transition to new hardware platforms. The Company expects to return to profitability in its fourth quarter of fiscal 2006.

Take-Two generated approximately $38 million in cash flow from operations in the quarter, bringing the Company's cash position to approximately $143 million as of January 31, 2006.

First Quarter Highlights

Rockstar Games' Grand Theft Auto: Liberty City Stories for the PSPTM (PlayStation®:)Portable) system and Grand Theft Auto: San Andreas for the PlayStation®:)2 were the largest contributors to revenue during the quarter. Grand Theft Auto: Liberty City Stories was the number one selling title for the PSP in the U.S. in each month since its October 2005 launch, as estimated by NPD Funworld®:)*. Also in the first quarter Rockstar introduced the PlayStation 2 Greatest Hits and Xbox Platinum Hits versions of Grand Theft Auto: San Andreas.

2K's leading titles in the quarter were Sid Meier's Civilization IV for PC and NBA 2K6 for the Xbox 360TM video game and entertainment system from Microsoft. Other titles shipped during the first quarter from 2K included NHL 2K6 and Amped 3, both for Xbox 360; College Hoops 2K6 for PlayStation 2 and the Xbox®:) video game and entertainment system from Microsoft; and Torino 2006TM for PlayStation 2, Xbox and PC. Global Star Software's first quarter releases included Ford vs Chevy for PlayStation 2 and Xbox and Dora the Explorer: Journey to the Purple Planet for PlayStation 2 and Nintendo GameCubeTM.

At the Company's Jack of All Games distribution business, sales in the first quarter decreased year over year due primarily to reduced sales of current generation hardware and software products and a decrease in average selling prices of interactive entertainment products as the industry transitions to next-generation platforms. Additionally, the limited availability of Xbox 360 hardware resulted in lower than expected hardware and software sales for this system. Jack of All Games is continuing to focus on improving fiscal 2006 performance by strategically offering retail partners value-priced exclusive titles, hardware and software bundles, and multi-game compilations.

Upcoming Products

Fiscal 2006 second quarter products that have already shipped include the North American release of 24: The Game exclusively for PlayStation 2 from 2K Games; College Hoops 2K6 for Xbox 360 from 2K Sports; and Sudoku FeverTM for Game Boy®:) Advance from Global Star. Titles planned for the second quarter from Rockstar Games include Midnight Club 3: DUB Edition REMIX for both the PlayStation 2 Greatest Hits program and the Xbox Platinum Hits collection, shipping next week, and Grand Theft Auto: Liberty City Stories for PlayStation 2, planned for release in late April. Second quarter products from 2K include The Elder Scrolls®:) IV: OblivionTM for PC and Xbox 360; Top Spin 2 for Xbox 360, Nintendo DSTM and Game Boy Advance; Major League Baseball®:) 2K6 for PlayStation 2, Xbox, Xbox 360, PSP, and Nintendo GameCube; and World Poker Tour for PSP; and from Global Star, Hummer Badlands for PlayStation 2 and Xbox.

Additional products expected for 2006 from Rockstar Games include Table Tennis for Xbox 360, Bully for PlayStation 2 and Xbox; two new PSP titles, including an all-new Grand Theft Auto title; and a sequel of a Rockstar brand for a current generation console system. 2K Games' lineup includes The Da Vinci Code for current generation console systems and PC, to be released in conjunction with the Columbia Pictures feature film in May, and Prey on PC and Xbox 360, planned for release this summer. Fall/winter releases include Family Guy for current generation console systems, based on the hit Twentieth Century Fox television series; The Darkness for next generation systems based on the popular Top Cow Productions' comic book franchise; and Stronghold Legends for PC. 2K Sports has various sports titles planned including NBA 2K7, NHL 2K7, College Hoops 2K7, and additional products based on the Major League Baseball license, as well as several proprietary sports brands. Global Star is planning Family Feud for multiple platforms, among other titles.

For 2007, the Company anticipates a strong next generation lineup from Rockstar Games including sequels to several of Rockstar's most successful franchises. 2K Games' 2007 pipeline includes the next generation console title BioShock from 2K's Irrational Games development studio, among other titles in development. For 2007 and 2008, 2K Sports anticipates a solid lineup of sports titles based on licenses with Major League Baseball, the National Basketball Association, the National Hockey League and the National Collegiate Athletic Association; as well as proprietary unlicensed sports brands utilizing the development teams responsible for the award winning and critically acclaimed tennis, snowboarding and boxing games.

Management Comments

Paul Eibeler, President and Chief Executive Officer, stated, "We are working to manage through the console transition, while positioning Take-Two for future opportunities. We're taking a hard look at every aspect of our business and are balancing the need to manage expenses while investing in creative resources and the infrastructure needed to support our diversification efforts. Most importantly, we will continue to focus our development resources on creating great content and further leveraging our proprietary brands. Our commitment to quality products for current and next generation systems is critical to further strengthen Take-Two for the opportunities we see in 2007 and 2008."
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