NFL, 2K Ink Non-Simulation Video Game Deal

The National Football League and video game publisher Take-Two Interactive (2K) March 10 announced a multiyear partnership encompassing multiple future video games. The partnership marks the return of football-themed games to 2K’s portfolio of sports titles, as well as an expansion of video game properties for the NFL. Financial terms were not disclosed.

Notably, the games will be non-simulation with specific titles, developers and release dates to be announced at a later date, 2K confirmed the projects are in early development and will launch starting in calendar year 2021, during Take-Two’s fiscal year 2022.

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Novato, Calif.-based 2K previously published the NFL 2K franchise, which ran from 1999 to 2004. Other 2K-published games include the NBA video game simulation series, NBA 2K, as well as WWE 2K, The Golf Club 2019 Featuring PGA Tour, Borderlands, BioShock, Mafia, Sid Meier’s Civilization and XCOM.

“We’re thrilled to be back in business with the NFL in a partnership that will span multiple video games centered on fun, approachable and social experiences,” David Ismailer, president of 2K, said in a statement.

Yet, simulation-themed titles have been the singular driver of sports-themed video games. A reality rival Electronic Arts (EA) was quick to point out.

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“EA SPORTS is the exclusive publisher of NFL simulation games, and our partnership with the NFL and NFLPA remains unchanged,” the company said in a statement.

EA reiterated that its near 30-year agreement with the NFL is non-exclusive when it comes to non-simulation games. Indeed, EA Sports’ Madden NFL 20 is the most successful game ever in the franchise, and new modes like Superstar KO and Madden NFL e-Sports broadcasts.

For the NFL, the 2K deal is about expanding the next-generation user base for branded games that are not directly linked to simulated on-field action.

“Expanding the NFL’s presence in the world of gaming has become a focus for the League … and reviving our partnership with 2K was a natural step in that effort,” said Joe Ruggiero, SVP of consumer products at the NFL.

Michael Pachter, media analyst with Wedbush Securities in Los Angeles, believes Take-Two’s NFL games will have “extremely low potential” to generate significant revenue, and are more analogous to a game like Glu Mobile’s Kim Kardashian: Hollywood, a lifestyle-themed title averaging under $100 million annually on mobile.

“Take-Two may craft a compelling lifestyle game based on the NFL, but we think such an effort is unlikely to challenge video game fans sufficiently to generate meaningful revenues,” Pachter wrote in a note. “Because the agreement specifically excludes football simulation games, we don’t see any of Take-Two’s games meaningfully impacting EA’s sales of its Madden NFL simulation game.”

 

‘Red Dead Redemption 2’ a Massive Hit, with 17 Million Copies Sold in Just 8 Days

Rockstar Games’ Red Dead Redemption 2 has sold 17 million copies since its Oct. 26 release, parent company Take-Two Interactive Software Inc. said in a Nov. 7 earnings release.

That surpasses the total lifetime sales tally for the original Western open-world game Red Dead Redemption, released eight years ago, in 2010.

Take-Two chairman and CEO Strauss Zelnick said in the release that the game sequel is the label’s “first game built from the ground up for the current console generation. Red Dead Redemption 2 has received outstanding reviews, with numerous critics awarding the title a perfect score. The title is now tied with Grand Theft Auto V as the highest rated title on PlayStation 4 and Xbox One, with a 97 Metacritic score.

“A massive commercial success, Red Dead Redemption 2 has set numerous records, including achieving the biggest opening weekend in the history of entertainment, with over $725 million in retail sell-through during its first three days. Red Dead Redemption 2 sold-in more units in its first eight days than the original blockbuster Red Dead Redemption sold in its first eight years….

“As a result of our strong second quarter performance and outstanding early results from Red Dead Redemption 2, we are raising our financial outlook for fiscal 2019…. Looking ahead, we have a strong development pipeline across our labels and are exceedingly well positioned for long-term growth and margin expansion.”

On a subsequent earnings call with analysts, Zelnick noted that Red Dead Redemption 2 is a “collaboration among all of Rockstar Game studios worldwide, including more than 2,000 team members.” The game, he continued, “features the deepest and most expansive Rockstar world to date.”

Take-Two reported strong results for its fiscal second quarter 2019 ended Sept. 30, 2018. Net revenue grew 11% to $492.7 million, as compared to $443.6 million in last year’s fiscal second quarter. Recurrent consumer spending (virtual currency, add-on content and in-game purchases) grew 12% and accounted for 49% of total net revenue.

The largest contributors to net revenue in fiscal second quarter 2019 were NBA 2K19 and NBA 2K18Grand Theft Auto Online and Grand Theft Auto VNBA 2K Online 2, Dragon City and Monster Legends, and WWE SuperCard.

Digitally-delivered net revenue grew 18% to $358.4 million, as compared to $302.9 million in last year’s fiscal second quarter, and accounted for 73% of total net revenue.

The largest contributors to digitally-delivered net revenue in fiscal second quarter 2019 were Grand Theft Auto Online and Grand Theft Auto VNBA 2K18 and NBA 2K19NBA 2K Online 2Monster Legends and Dragon City, and WWE SuperCard.