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Wonka's World of Candy. Words With Friends 2-Word Game. Spades Plus - Card Game. Words With Friends — Word Game. Our next question comes from Brian Fitzgerald of Jefferies.

Brian Fitzgerald -- Jefferies -- Analyst. Got a couple of questions. Strauss, it's one of the most competitive holiday seasons in years with big games kind of coming every week in October.

How do you think about the market this holiday? And then, when you were wondering and when you think about what kind of dynamics you're seeing around early access programs, around things like Anniversary and Deluxe Editions, has it changed from what you've seen in previous years, maybe from last year with Tip-Off?

Any comments around early access. Thanks for your questions, Brian. We're always worried about the competition. We never take anything for granted and we don't claim success early.

We do our best to create phenomenal entertainment and market it effectively, and then we explain what happened. And we have enormously high expectations for October with the launch of Red Dead Redemption 2.

We take the competition seriously. We're really excited about the release. I would just note, you don't have to go back too many years when holiday season was just inundated, when people basically only released frontline products in holiday season, and this company performed well at that time as well.

So, I think it all comes down to quality. In terms of the benefits of early access and other programs, we do have all those kind of programs. We do believe in them as long as you have something great that consumers want.

So, it's worked well for us. Good afternoon and thanks for the question. Just curious about the NBA. I wonder if you could give us some metrics around that?

So, you're right, obviously, as we sell incremental units and have more success, we also have more engagement. Therefore, we typically have incremental recurrent consumer spending.

So, success breeds success. And we don't actually describe the linear relationship but we are aware of it.

But is it safe to assume that the percentage growth that you're getting in units and revenue from the core game, you're seeing faster growth on the digital side?

So, the digital growth is outpacing the growth of the game itself, or recurrent revenue part of digital is outpacing the game itself?

I want to make sure I understand, are you talking about the percentage of full game units that are digitally distributed or are you talking about recurrent consumer spending, or are you talking about both?

I'm talking about the recurring consumer spending relative to the core game [Inaudible]? As we do a better job with both the game and with opportunities for ongoing engagement, recurrent consumer spending continues to rise.

And we expect in Q2, recurrent consumer spending on NBA to grow and for it to be up for the full year.

I'm sorry, Lainie, could you say that again? You're expecting the game to grow? And then just one quick question.

Have you been buying back any stocks since the end of the quarter? Are you willing to comment on that? We make those announcements after the end of the quarter.

Thank you very much. Our next question comes from Chris Merwin of Goldman Sachs. Chris Merwin -- Goldman Sachs -- Analyst. Can you guys hear me OK?

We hear you just fine. So, it seems like there is a strategy there to cross-promote between those two titles.

I was wondering if you could talk about that strategy a bit more and how you plan to grow both, the GTA and Red Dead online community? And then, just along those lines, maybe if you could comment on the digital mix of Red Dead preorders and what that looks like so far relative to the overall digital download mix that you reported for fiscal ?

I realized you've guided to digital downloads being down in fiscal from the impact of, I guess, a higher physical SKU of Red Dead units but has that guidance been consistent with what you've seen so far in the preorder data?

In reverse order, thanks for your question, we don't really talk about how preorders are stacking up, digital versus physical. And with regard to potential cross-promotion between Grand Theft Auto and Red Dead Redemption 2, Rockstar Games has employed some creative techniques in cross-promotion.

I think they're pretty exciting. And so, I think it's great that there's some cross-promotion going on but as you know, we always prefer that our labels get more detail on their development and on their promotion and their marketing.

And I'm quite certain that Rockstar will do that in the coming months. Hey, Strauss, Karl, Lainie, Hank. Congratulations on an awesome quarter. Thanks for taking my questions.

First, a clarification maybe, Karl, on what you said about an entirely new online multi-player experience for Red Dead 2, did I hear that correctly?

Is that new to the franchise? Is that new Rockstar? Or if you can you just clarify that or add to that comment, I'd appreciate it.

There is nothing really more to add to that. We just simply said that there is an all-new online experience coming with Red Dead Redemption. There haven't been any other details given other than that.

Well, we'll be excited to find out when they announce it. So, I'm guessing you're working hard on RDR 2. And then thinking back, I think it was , you had Red Dead Redemption.

In , you had L. So four big games, four releases in four years. So, I guess, the question is what does this increase in resources within Rockstar provide you in terms of increasing the pace of future releases from Rockstar, where historically it seems they've [Inaudible] been agreeable to releasing content on an annual basis?

And Mike, we don't really give out that much specificity on headcount. We've made no secret of the fact that we've grown our headcount, groupwide, that's focused on development but I think your percentages are meaningfully off.

In terms of your question, which I really think has to do with development cadence, if I heard it correctly, business has changed. Back 8 [Inaudible], 10 years ago, we had a business that involved spending a lot of resources to create a big stand-alone title, putting the title into the marketplace and moving on to the next title.

And ever since that, as you know, our company is focused on finding ways to captivate and engage consumers post-release. Now when we don't have a successful title, of course, we don't have that opportunity but with success, and we're fortunate we've had quite a bit of it at both of our core labels, we do have such an opportunity.

It's nearly half our business in the last year. So, I think we are dealing with a very, very different business and our development teams now continue to raise the bar creatively for what we do, and that was reflected in Grand Theft Auto V, which has now sold-in almost million units.

And I'm quite certain it'll be reflected in Red Dead Redemption 2. It's also reflected in the quality of work done at the 2K label, whether that's in our Borderlands franchise or in our basketball program, or in other of our programs, like Civilization.

So, I think your expectation should be that our headcount would grow more. We've made no secret of the fact that we have some wonderful intellectual property and our constraint is not financial and, certainly, isn't an appetite for growth.

Our constraint is that we are insistent on hiring only the best and the brightest, creative talent through our organization.

Those people are hard to come by. And if we can grow even more rapidly, albeit, in a disciplined way, that will allow us to develop and launch even more intellectual property based on our existing franchises and based on new franchises.

So that's a long-winded way of saying our cadence has indeed changed because the opportunity has changed. And our business now is diverse. It includes not just frontline console products, it includes numerous avenues that lead to recurrent consumer spending whether that's a free-to-play title in China, the biggest of its kind, or mobile titles headquartered in Barcelona, or mobile titles coming to you from 2K, or massively attractive record-breaking online title, Grand Theft Auto Online.

And that's without talking about what's to come because we don't know what's to come but we're pretty optimistic. Thanks so much for taking my question.

Can you talk about how you think about discounting within both for the game Grand Theft Auto V but also the in-game currency? And have you had any changes recently?

Please correct me if I'm wrong but it does seem like you are a little bit more promotional heading into the after-hours update but certainly that could be LTV driven.

We don't typically spend a whole lot of time talking about our pricing profile. The more successful our titles are, the more price leverage we have, as you'd expect, and we've enjoyed a great deal of price leverage, historically, for our hit titles.

When we need to be promotional, we are. I would say, we're exceedingly judicious about physical inventory that we put into the marketplace, which means that we're not under pressure at any given time regarding our pricing policies but beyond that, we don't give much more color.

This is Mark Kelley on for Brandon. Thanks for taking the questions. Just a couple for us. On NBA 2K, recurrent revenue was strong this quarter after a bit of a disappointment last quarter.

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But is it safe to assume that the percentage growth that you're getting in units and revenue from the core game, you're seeing faster growth on the digital side?

So, the digital growth is outpacing the growth of the game itself, or recurrent revenue part of digital is outpacing the game itself? I want to make sure I understand, are you talking about the percentage of full game units that are digitally distributed or are you talking about recurrent consumer spending, or are you talking about both?

I'm talking about the recurring consumer spending relative to the core game [Inaudible]? As we do a better job with both the game and with opportunities for ongoing engagement, recurrent consumer spending continues to rise.

And we expect in Q2, recurrent consumer spending on NBA to grow and for it to be up for the full year. I'm sorry, Lainie, could you say that again?

You're expecting the game to grow? And then just one quick question. Have you been buying back any stocks since the end of the quarter?

Are you willing to comment on that? We make those announcements after the end of the quarter. Thank you very much. Our next question comes from Chris Merwin of Goldman Sachs.

Chris Merwin -- Goldman Sachs -- Analyst. Can you guys hear me OK? We hear you just fine. So, it seems like there is a strategy there to cross-promote between those two titles.

I was wondering if you could talk about that strategy a bit more and how you plan to grow both, the GTA and Red Dead online community? And then, just along those lines, maybe if you could comment on the digital mix of Red Dead preorders and what that looks like so far relative to the overall digital download mix that you reported for fiscal ?

I realized you've guided to digital downloads being down in fiscal from the impact of, I guess, a higher physical SKU of Red Dead units but has that guidance been consistent with what you've seen so far in the preorder data?

In reverse order, thanks for your question, we don't really talk about how preorders are stacking up, digital versus physical.

And with regard to potential cross-promotion between Grand Theft Auto and Red Dead Redemption 2, Rockstar Games has employed some creative techniques in cross-promotion.

I think they're pretty exciting. And so, I think it's great that there's some cross-promotion going on but as you know, we always prefer that our labels get more detail on their development and on their promotion and their marketing.

And I'm quite certain that Rockstar will do that in the coming months. Hey, Strauss, Karl, Lainie, Hank. Congratulations on an awesome quarter.

Thanks for taking my questions. First, a clarification maybe, Karl, on what you said about an entirely new online multi-player experience for Red Dead 2, did I hear that correctly?

Is that new to the franchise? Is that new Rockstar? Or if you can you just clarify that or add to that comment, I'd appreciate it.

There is nothing really more to add to that. We just simply said that there is an all-new online experience coming with Red Dead Redemption.

There haven't been any other details given other than that. Well, we'll be excited to find out when they announce it.

So, I'm guessing you're working hard on RDR 2. And then thinking back, I think it was , you had Red Dead Redemption.

In , you had L. So four big games, four releases in four years. So, I guess, the question is what does this increase in resources within Rockstar provide you in terms of increasing the pace of future releases from Rockstar, where historically it seems they've [Inaudible] been agreeable to releasing content on an annual basis?

And Mike, we don't really give out that much specificity on headcount. We've made no secret of the fact that we've grown our headcount, groupwide, that's focused on development but I think your percentages are meaningfully off.

In terms of your question, which I really think has to do with development cadence, if I heard it correctly, business has changed.

Back 8 [Inaudible], 10 years ago, we had a business that involved spending a lot of resources to create a big stand-alone title, putting the title into the marketplace and moving on to the next title.

And ever since that, as you know, our company is focused on finding ways to captivate and engage consumers post-release.

Now when we don't have a successful title, of course, we don't have that opportunity but with success, and we're fortunate we've had quite a bit of it at both of our core labels, we do have such an opportunity.

It's nearly half our business in the last year. So, I think we are dealing with a very, very different business and our development teams now continue to raise the bar creatively for what we do, and that was reflected in Grand Theft Auto V, which has now sold-in almost million units.

And I'm quite certain it'll be reflected in Red Dead Redemption 2. It's also reflected in the quality of work done at the 2K label, whether that's in our Borderlands franchise or in our basketball program, or in other of our programs, like Civilization.

So, I think your expectation should be that our headcount would grow more. We've made no secret of the fact that we have some wonderful intellectual property and our constraint is not financial and, certainly, isn't an appetite for growth.

Our constraint is that we are insistent on hiring only the best and the brightest, creative talent through our organization.

Those people are hard to come by. And if we can grow even more rapidly, albeit, in a disciplined way, that will allow us to develop and launch even more intellectual property based on our existing franchises and based on new franchises.

So that's a long-winded way of saying our cadence has indeed changed because the opportunity has changed. And our business now is diverse.

It includes not just frontline console products, it includes numerous avenues that lead to recurrent consumer spending whether that's a free-to-play title in China, the biggest of its kind, or mobile titles headquartered in Barcelona, or mobile titles coming to you from 2K, or massively attractive record-breaking online title, Grand Theft Auto Online.

And that's without talking about what's to come because we don't know what's to come but we're pretty optimistic. Thanks so much for taking my question.

Can you talk about how you think about discounting within both for the game Grand Theft Auto V but also the in-game currency?

And have you had any changes recently? Please correct me if I'm wrong but it does seem like you are a little bit more promotional heading into the after-hours update but certainly that could be LTV driven.

We don't typically spend a whole lot of time talking about our pricing profile. The more successful our titles are, the more price leverage we have, as you'd expect, and we've enjoyed a great deal of price leverage, historically, for our hit titles.

When we need to be promotional, we are. I would say, we're exceedingly judicious about physical inventory that we put into the marketplace, which means that we're not under pressure at any given time regarding our pricing policies but beyond that, we don't give much more color.

This is Mark Kelley on for Brandon. Thanks for taking the questions. Just a couple for us. On NBA 2K, recurrent revenue was strong this quarter after a bit of a disappointment last quarter.

Can you speak to the strength relative to expectations? So, just to answer your first question, which I believe was about Q1.

So as Lainie said, recurrent consumer spending on NBA 2K18 exceeded our expectations for Q1 and was down [Inaudible] less than we had forecasted to be.

And we believe that it has been affected by a couple of potential things, could be some market competition out there, also other games that are in the market.

Visual Concepts certainly has plans to address continuing to keep people be engaged in a meaningful way longer into the season. So, I've got no specific to share with you right now but rest assured, Visual Concepts is always working on improving that experience to drive engagement and, ultimately, which helps our economic situation.

What was the second question? Our next question comes from Ryan Gee of Barclays. Ryan Gee -- Barclays -- Analyst. Thanks for taking my questions; two, if I may.

There was an announcement this morning from Tencent about one of their studios developing a new mobile game based on popular Western IP. And so, with the announcement today of NBA 2K Online 2 launching for PC this fall over there, I don't believe I heard anything on mobile or that that extends to mobile.

So, can you maybe talk about the opportunity for your NBA franchise on mobile with Tencent, whether that's something you guys have considered?

Or just maybe any observations around sports on mobile over there. And then, I have a follow-up. We haven't announced anything.

I think the notion of a mobile title for NBA 2K in China or, broadly, in the rest of the world, is always interesting.

We, obviously, have a title here. So, I think it's an interesting opportunity but we haven't anything, yet to announce.

And then maybe thinking longer term, I know end of last year, you guys announced the Private Division and then several projects to go along with those at that time.

So, I'm curious if there's any sort of update on any of those projects, and ideally what's the realistic timeline that we might be able to see one or two of those come out?

And then, kind of along those lines, if you guys have any plans to add additional studios under that umbrella? Well, we've mentioned a number of the projects that are pending at Private Division.

There are four of them pending. Right now what we have in the marketplace is Kerbal Space Program, which we acquired and which is doing really well.

We don't have any releases from Private Division in fiscal And more to come on Private Division but we do have four titles about which we're incredibly excited in development.

Thanks for taking my question, guys. If you could play Monday-morning quarterback for a second and look at the success of GTA Online seems like it continually surprises you.

Could you dig down a little bit and share what surprises you? Is it the number of people who continue to buy the game? Is it the number of hours they're playing, or the amount they're spending?

And then, as a follow-up, what have you learned from that that you think you could apply to like Red Dead Online? So, I think we'll do the old multiple choice answer for your first question, which is D, all of the above.

The answer's yes, we attribute the long success to the fact that the title just captured the imagination of the public and set a standard not just for our company but for the industry of what a great video game ought to be.

And the online experience is so incredibly robust. It allows you to do so many different things and it keeps people engaged on an ongoing basis.

And then Rockstar Games continues to drop extraordinary unexpected content into the game. So, you're right, it defied our expectations.

We Take-Two, we Rockstar Games, had never done anything like that. We didn't know what to expect. And the cadence of its ongoing extraordinary success too is new to us.

Does it inform how we look at titles that come after? Well, naturally, it does but the nature of our approach collectively, specifically, the nature of Rockstar Games approach, is never to be derivative and always to shatter expectations.

And my belief is that Red Dead Redemption 2 will shatter expectations and that the online experience also will be extraordinary but unexpected.

And my view is that all great hits are, by their very nature, unexpected. So that's the goal. There is an expectation around the table here, of course, there's an expectation at Rockstar Games, and there's expectation on the part of consumers, but our job is to exceed those expectations.

And fingers crossed, that's we're all setting out to do. And we couldn't predict it and didn't presume to with regard to Grand Theft Auto V and we wouldn't presume to with Red Dead Redemption 2.

So, we're just hard at work, doing the very best job that we can. Ladies and gentlemen, we have reached the end of our question and answer session.

I would like to turn the call back to management for closing remarks. Well, first of all, thank you for joining us today.

Secondly, I'd like to just say thanks again to all of our colleagues here in New York and all around the world, many of whom are [Inaudible] and many of whom are listening, we have the hardest working people in the show business, and we think they're very best and we're grateful to all of our colleagues for their extraordinary work that's reflected in these results.

We're also grateful to our shareholders for your continued support. So, thank you for joining us today.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation. This article is a transcript of this conference call produced for The Motley Fool.

While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings.

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Motley Fool August 6, Logo of jester cap with thought bubble with words 'Fool Transcripts' below it. Operator Greetings and welcome to the Take-Two Interactive Software first-quarter fiscal year earnings conference call.

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