Take Two suspends release of new "Grand Theft Auto"

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The video game publisher Take Two Interactive Software, Inc. on Thursday officially announced that it is postponing the release of "Grand Theft Auto IV" video game until next year, giving shock to gaming enthusiasts who were eagerly awaiting the arrival of the game's latest installment.

Besides deciding to temporarily suspend the release of the game, the New York-based game publisher also lowered its forecast sharply for its fiscal fourth quarter.

"Grand Theft Auto IV", the next installment of the "Grand Theft Auto” franchise, will be available for Microsoft's Xbox 360 video game console as well as Sony's PlayStation 3.

This newest addition to Take-Two's blockbuster franchise, which was originally slated for release in the company's fiscal fourth quarter ending in October, will now hit the market shelves in fiscal 2008's second quarter, which ends in April 2008.

It was originally slated for release this October, ahead of the crucial holiday shopping season where video game publishers make much of their money. The company said it needs more time to develop the game.

Take Two was intended to release the game ahead of the Christmas selling season, but technical glitches in completing the game forced it to postpone the release of the title. On a conference call with analysts to discuss the delay, Take-Two Chairman Strauss Zelnick said "certain elements of development proved to be more time-intensive than expected, especially given the commitment for a simultaneous release on two very different platforms."

The Take Two executives stressed that the reason behind the delay is just due to the technological challenges in finishing the game.

The company also pushed back its outlook for the third quarter, which ended July 31, as well as for the fourth quarters, which ends Oct. 31, thus sending the full-year forecast down.

Take-Two sharply lowered the outlook for its fiscal fourth quarter, now expecting to post a loss of 20 cents to 25 cents a share, with revenue in a range of $275 million to $300 million, much lower than predicted sales of $520 million to $550 million. Opposite to analysts’ estimates of $1.33 a share profit on $535 million in revenue, the company predicted that it will lose between 5 cents and 10 cents a share, excluding one-time items and charges.

For its full 2007 fiscal year, Take Two predicts sales of $950 million to $1 billion, down from $1.2 billion to $1.25 billion it had forecast in June. The company expects a loss of $1.25 to $1.35 per share, excluding stock-based compensation and other one-time costs for the full fiscal year, while including the costs it forecast a loss of $2.10 to $2.20 a share.

"Obviously, we are very disappointed to reduce guidance after having previously reaffirmed it," said Take-Two Chief Executive Ben Feder in a statement. "Other than a matter of timing, the movement of 'Grand Theft Auto IV' does not compromise Take-Two in any way."

Take Two expects loss of 85 cents to 90 cents a share in its third quarter ended July 31, and revenue in a range of $195 million to $205 million. The game publisher said that it believes it lost between 65 cents and 70 cents a share, excluding charges and one-time items in the last ended quarter.

Take Two’s yesterday’s decision to suspend the game distribution comes nearly one and half moths after it dropped the plans to release the violent video game Manhunt 2, a sequel to its 2003 title Manhunt.

Developed by Rockstar Games, the premium content development division of Take Two, Manhunt 2 was originally slated for a July 10 release in the United States on both Nintendo Co.'s Wii and the PlayStation 2 (PS2) by Sony Corp.

Due to its violent content, the US Entertainment Software Rating Board, the video game industry's self-regulated ratings board, gave a preliminary version of "Manhunt 2" an "adults only" rating, the most stringent rating that would likely ruin its sales in the country. The game also faced bans in Britain and Ireland.

Take-Two shares slipped $3.16 to $13.75 in extended trading. In regular NASDAQ Stock Market trading they rose 15 cents to $16.91.