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What changed in Take-Two Interactive's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Take-Two Interactive's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+380 added−393 removedSource: 10-K (2025-05-20) vs 10-K (2024-05-22)

Top changes in Take-Two Interactive's 2025 10-K

380 paragraphs added · 393 removed · 283 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeWe expect 2K to continue to develop new, successful franchises in the future. 2K's internally owned and developed franchises include the critically acclaimed, multi-million unit selling BioShock , Mafia , Sid Meier's Civilization , and XCOM franchises. 2K also has long-held publishing rights for Borderlands and Tiny Tina's Wonderlands from Gearbox.
Biggest changeWe expect 2K to continue to develop new, successful franchises in the future. 2K's internally owned and developed franchises include the critically acclaimed, multi-million unit selling BioShock , Mafia , Sid Meier's Civilization , and XCOM franchises, as well as the Borderlands and Tiny Tina's Wonderlands franchises, which we now own following our June 2024 acquisition of Gearbox Entertainment. 2K's realistic sports simulation titles include our flagship NBA 2K series, which continues to be the top-ranked NBA basketball video game, the WWE 2K professional wrestling series, PGA TOUR 2K , and TopSpin 2K . 2K also publishes mobile titles, including WWE SuperCard .
Competition in the interactive entertainment industry is based on innovation, features, playability, product quality, brand name recognition, compatibility with popular platforms, access to distribution channels, price, marketing, and customer service. Our business is driven by hit titles, which require increasing budgets for development and marketing.
Competition Competition in the interactive entertainment industry is based on innovation, features, playability, product quality, brand name recognition, compatibility with popular platforms, access to distribution channels, price, marketing, and customer service. Our business is driven by hit titles, which require increasing budgets for development and marketing.
We believe Sustainability creates value for all stakeholders, including employees and customers, while also helping to mitigate risks, reduce costs, protect brand value, and identify market opportunities. We have an organization-wide Sustainability committee, overseen by the Board of Directors, to lead our Sustainability efforts.
We believe sustainability creates value for all stakeholders, including employees and customers, while also helping to mitigate risks, reduce costs, protect brand value, and identify market opportunities. We have an organization-wide Sustainability Committee, overseen by the Board of Directors (the "Board"), to lead our sustainability efforts.
We make all of our filings with the Securities and Exchange Commission ("SEC") available free of charge on our website under the caption "Financial Information—SEC Filings." Included in these filings are our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports, which are available as soon as reasonably practicable after we electronically file or furnish such materials with the SEC pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934.
We make all of our filings with the Securities and Exchange Commission ("SEC") available free of charge on our website under the caption "Financial Information—SEC Filings." Included in these filings are our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports, which are available as soon as reasonably practicable after we electronically file or furnish such materials with the SEC pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act").
Operating margins are dependent in part upon our ability to release new, commercially successful software products and to manage effectively their development and marketing costs. We have 2 internal development studios located in Australia, Canada, China, Czech Republic, Finland, Germany, Hungary, India, Serbia, South Korea, Spain, Turkey, the United Kingdom (U.K.), and the United States (U.S.).
Operating margins are dependent in part upon our ability to release new, commercially successful software products and to manage effectively their development and marketing costs. We have internal development studios located in Australia, Canada, China, Czech Republic, Finland, Germany, Hungary, India, Serbia, South Korea, Spain, Turkey, the United Kingdom ("U.K."), and the United States ("U.S.").
Further, our compliance training program seeks to ensure that our employees recognize and report any signs of harassment, discrimination, retaliation, or other inappropriate behaviors in the workplace and that they understand and abide by our Code of Business Conduct and other internal policies.
Our compliance training program seeks to ensure that our employees recognize and report any signs of harassment, discrimination, retaliation, or other inappropriate behaviors in the workplace and that they understand and abide by our Code of Business Conduct and other internal policies.
We expect Rockstar Games, our wholly-owned publisher of the Grand Theft Auto , LA Noire , Max Payne , Midnight Club , Red Dead Redemption , and other popular franchises, to continue to be a leader in the action/adventure product category and to create groundbreaking entertainment.
We expect Rockstar Games, our wholly-owned publisher of the Grand Theft Auto , L.A. Noire , Max Payne , Midnight Club , Red Dead Redemption , and other popular franchises, to continue to be a leader in the action/adventure product category and to create groundbreaking entertainment.
We believe that Rockstar Games has established a uniquely original, popular, cultural phenomenon with its Grand Theft Auto series, which is the interactive entertainment industry's most iconic and critically acclaimed brand and has sold-in over 420 million units worldwide.
We believe that Rockstar Games has established a uniquely original, popular, cultural phenomenon with its Grand Theft Auto series, which is the interactive entertainment industry's most iconic and critically acclaimed brand and has sold-in over 445 million units worldwide.
We engage in evolving business models such as online gaming, virtual currency, add-on content, and in-game purchases, and we expect to continue to generate incremental revenue from these opportunities. We also generate revenue from advertising within our software products. Rockstar Games.
We engage in evolving business models such as online gaming, virtual currency, add-on content, and in-game purchases, and we expect to continue to generate incremental revenue from these opportunities. We also generate revenue from advertising primarily within our mobile software products. Rockstar Games.
The term of the agreement, as amended, expires on March 31, 2025, with automatic one-year renewal terms thereafter (unless one party gives the other notice of termination). Sony may terminate the agreement for any or no reason upon 30 days’ notice.
The term of the agreement, as amended, expires on March 31, 2026, with automatic one-year renewal terms thereafter (unless one party gives the other notice of termination). Sony may terminate the agreement for any or no reason upon 30 days’ notice.
The competition for shelf space, whether physical or virtual, and promotional support is intense among an increasing number of newly introduced entertainment software titles and hardware. • Other forms of entertainment such as motion pictures, television, social networking, online applications, and other forms of entertainment, which may be less expensive or provide other advantages to consumers.
The competition for shelf space, whether physical or virtual, and promotional support is intense among an increasing number of newly introduced entertainment software titles and hardware. • Other forms of entertainment such as motion pictures, television, social networking, online applications, short-form video, and other forms of entertainment, which may be less expensive or provide other advantages to consumers.
We also provide a comprehensive benefits package that includes traditional offerings, such as medical, dental vision, retirement, disability, accident and life insurance, prescription drugs, and leaves, and also includes programs such as well-being, fitness reimbursement, mental health benefits, mental health awareness training for Human Resources personnel and managers throughout the Company, and charitable giving with a company match. 7
We also provide a comprehensive benefits package that includes traditional offerings, such as medical, dental vision, retirement, disability, accident and life insurance, prescription drugs, and leaves, and also includes programs such as fitness reimbursement, mental health benefits, mental health awareness training for Human Resources personnel and managers throughout the Company, and charitable giving with a company match.
The terms of both Xbox Agreements expire on March 31, 2025, each with automatic one-year renewal terms thereafter (unless one party gives the other advance notice of non-renewal).
The terms of both Xbox Agreements expire on March 31, 2026, each with automatic one-year renewal terms thereafter (unless one party gives the other advance notice of non-renewal).
We also sell advertising within a number of our games. Our advertising offerings provide creative ways for marketers and advertisers to reach and engage with our players and are generally essential for our free-to-play titles.
We also sell advertising within a number of our games, primarily in mobile. Our advertising offerings provide creative ways for marketers and advertisers to reach and engage with our players and are generally essential for our free-to-play titles.
To that end, our global Learning & Development team curates a wide variety of training materials and programs targeting both hard skills development and career progression as well as programs in leadership development and employee round tables.
Our global Learning & Development team curates a wide variety of training materials and programs targeting both hard skills development and career progression as well as programs in leadership development and employee round tables.
Examples of our competitors include Activision Blizzard, Electronic Arts Inc., Embracer Group AB, Playrix, Playtika, Roblox, Scopely, Tencent, and Ubisoft Entertainment S.A. We also expect new competitors to enter the market and existing competitors to allocate more resources to develop and market competing games and applications. • Sony, Microsoft, and Nintendo for the sale of interactive entertainment software.
Examples of our competitors include Electronic Arts Inc., Embracer Group AB, Playrix, Playtika, Roblox, Savvy Games, Tencent, and Ubisoft Entertainment S.A. We also expect new competitors to enter the market and existing competitors to allocate more resources to develop and market competing games and applications. 5 • Sony, Microsoft, and Nintendo for the sale of interactive entertainment software.
We work hard to ensure that development opportunities are individually tailored and that all decisions regarding hiring, career progression, and compensation are based on qualifications, work ethic, and job performance. Beyond formal performance management, we stay connected with our teams throughout the year with global town hall meetings, engagement and "pulse" surveys, culture assessments and employee round tables.
We work hard to ensure that development opportunities are individually tailored and that all decisions regarding hiring, career progression, and compensation are based on qualifications, work ethic, and job performance. Beyond formal performance management, we stay connected with our teams throughout the year with global town hall meetings and engagement and "pulse" surveys.
Zynga's diverse portfolio of popular game franchises has been downloaded more than six billion times, including CSR Racing , Dragon City , Empires & Puzzles , FarmVille , Golf Rival , Harry Potter: Puzzles & Spells , Match Factory! , Merge Dragons! , Merge Magic! , Monster Legends , Toon Blast , Top Eleven , Top Troops , Toy Blast , Two Dots , Words With Friends , Zynga Poker , and a high volume of hyper-casual mobile titles, including Fill the Fridge!, Parking Jam 3D , Power Slap , Pull the Pin, Twisted Tangle, and Tangled Snakes . 3 Recent Developments Pending Acquisition.
Zynga's diverse portfolio of popular game franchises has been downloaded more than six billion times, including CSR Racing , Dragon City , Empires & Puzzles , FarmVille , Game of Thrones: Legends, Golf Rival , Harry Potter: Puzzles & Spells , Match Factory! , Merge Dragons! , Merge Magic! , Monster Legends , Toon Blast , Top Eleven , Toy Blast , Two Dots , Words With Friends , Zynga Poker , and a high volume of hyper-casual mobile titles, including Color Block Jam, Fill the Fridge!, Parking Jam 3D , Power Slap , Pull the Pin, Screw Jam , Twisted Tangle, and Tangled Snakes .
Sales We sell software titles both digitally and physically through direct relationships with digital storefronts and platform partners, large retail customers, and third-party distributors. We sell our products globally and have sales operations in Australia, Canada, France, Germany, Japan, Singapore, South Korea, Spain, Taiwan, the United Kingdom, and the United States.
Sales We sell software titles both digitally and physically through direct relationships with digital storefronts and platform partners, large retail customers, and third-party distributors. We sell our products globally and have sales operations in Australia, Canada, France, Germany, Japan, Singapore, South Korea, Taiwan, the U.K., and the U.S.
We believe that our player-first mentality and commitment to creativity and innovation are distinguishing strengths, enabling us to differentiate our products in the marketplace by combining advanced technology with compelling storylines and characters that provide unique gameplay experiences for consumers.
We believe that our player-first approach and commitment to creativity and innovation are distinguishing strengths, enabling us to differentiate our products in the marketplace by combining advanced technology with compelling storylines and characters that provide unique, deeply engaging gameplay experiences.
We are subject to risks inherent in foreign trade, including increased credit risks, tariffs and duties, fluctuations in foreign currency exchange rates, shipping delays and international political, regulatory, and economic developments, all of which can have a significant effect on our operating results. See Notes 1 and 2 to our Consolidated Financial Statements.
We are subject to risks inherent in foreign trade, including increased credit risks, tariffs and duties, fluctuations in foreign currency exchange rates, shipping delays and international political, regulatory, and economic developments, all of which can have a significant effect on our operating results.
The label released its first trailer for the title in December 2023 and will share more details over time. Red Dead Redemption 2 , which has been a critical and commercial success that set numerous entertainment industry records, has sold-in more than 60 million units worldwide to date.
The label released its first trailer for the title in December 2023 and the second in May 2025 and will share more details in the future. Red Dead Redemption 2 , which has been a critical and commercial success that set numerous entertainment industry records, has sold-in more than 70 million units worldwide to date.
As of March 31, 2024, we had a research and development staff of 9,639 employees with the technical capabilities to develop software titles for all major consoles, PCs, and mobile platforms in multiple languages and territories.
As of March 31, 2025, we had a 2 research and development staff of 10,096 full-time employees with the technical capabilities to develop software titles for all major consoles, PCs, and mobile platforms in multiple languages and territories.
We believe that content ownership facilitates our internal product development efforts and maximizes profit potential. We attempt to protect our software and production techniques under copyright, patent, trademark, and trade secret laws as well as through contractual restrictions on disclosure, copying, and distribution.
Intellectual Property Our business is highly dependent on the creation, acquisition, licensing, and protection of intellectual property. We believe that content ownership facilitates our internal product development efforts and maximizes profit potential. We attempt to protect our software and production techniques under copyright, patent, trademark, and trade secret laws as well as through contractual restrictions on disclosure, copying, and distribution.
The agreements require us to submit products to Microsoft for approval and to make royalty payments to Microsoft based on the number of units manufactured or revenue from digitally downloaded content.
The agreements require us to submit products to Microsoft for approval and to make royalty payments to Microsoft based on the number of units manufactured or revenue from digitally downloaded content. In addition, products for the Xbox consoles are required to be manufactured by Microsoft-approved manufacturers.
However, we also acquire our players through paid advertising channels. We advertise our mobile games primarily within other mobile applications and on social networks, often through in-app and other advertising partners such as Facebook and Google.
However, we also acquire our players through paid advertising channels. We advertise our mobile games primarily within other mobile applications and on social networks, often through in-app and other advertising partners such as Facebook and Google. As of March 31, 2025, we had a sales and marketing staff of 1,418 full-time employees.
With 12,371 full-time employees as of March 31, 2024, of which 7,621 were located outside of the United States, we are constantly focused on our teams – their success, their structure, and how best to support them given their particular needs and projects. 46% of our employees are located in North America, 36% in Europe, and 18% in the Asia-Pacific region; 78% of our employees are focused on product development.
We are constantly focused on our teams – their success, their structure, and how best to support them given their particular needs and projects. 49% of our full-time employees are located in North America, 34% in Europe, and 17% in the Asia-Pacific region; 78% of our full-time employees are focused on product development.
In addition, products for the Xbox consoles are required to be manufactured by Microsoft-approved manufacturers. 4 Effective as of November 17, 2005, we entered into an Xbox 360 Publisher License Agreement with Microsoft for the Xbox 360 console (the “Xbox 360 Agreement”).
Effective as of November 17, 2005, we entered into an Xbox 360 Publisher License Agreement with Microsoft for the Xbox 360 console (the “Xbox 360 Agreement”).
Item 1. Business General We are a leading developer, publisher, and marketer of interactive entertainment for consumers around the globe. We develop, operate, and publish products principally through Rockstar Games, 2K, Private Division, and Zynga. Our products are currently designed for console gaming systems, including, but not limited to, the Sony Computer Entertainment, Inc.
Item 1. Business General We are a leading developer, publisher, and marketer of interactive entertainment for consumers around the globe. We develop, operate, and publish products principally through Rockstar Games, 2K, and Zynga. In October 2024, we sold our Private Division label, including our rights to substantially all of the label's titles.
We aim to label and market our products in accordance with the applicable principles and guidelines of the Entertainment Software Rating Board, ("ESRB"), an independent self-regulatory body that assigns ratings and enforces advertising guidelines for the interactive software industry. • Stimulating continued sales by reducing the wholesale prices of our products to retailers, digital storefronts, and platform providers at various times during the life of a product.
We aim to label and market our products in accordance with the applicable principles and guidelines of the Entertainment Software Rating Board, ("ESRB"), an independent self-regulatory body that assigns ratings and enforces advertising guidelines for the interactive software industry in the U.S.
In addition, we license and include console manufacturer technology in our products on a non-exclusive basis, which allows our games to be played on their respective hardware systems. Manufacturing Platform manufacturers, such as Sony, Microsoft, and Nintendo, either manufacture or control the selection of approved manufacturers of physical copies of software products sold for use on their respective hardware platforms.
Manufacturing Platform manufacturers, such as Sony, Microsoft, and Nintendo, either manufacture or control the selection of approved manufacturers of physical copies of software products sold for use on their respective hardware platforms.
Our objective is to achieve greater operating expense leverage as we grow our scale with the release of our eagerly-anticipated pipeline. We use a product investment review process to evaluate potential titles for investment, to review existing titles in development, and to assess titles after release by measuring their performance in the market and the return on our investment.
We use a product investment review process to evaluate potential titles for investment, review existing titles in development, and assess titles after release by measuring their performance in the market and the return on our investment. We believe that our disciplined approach to product investment will enhance the competitiveness and profitability of our titles.
Competition for our titles is influenced by the timing of competitive product releases and the similarity of such products to our titles. International Operations International sales are a significant part of our business. For the fiscal years ended March 31, 2024, 2023 and 2022, we earned 38.7%, 37.2% and 40.1%, respectively, of our net revenue outside the United States.
International Operations International sales are a significant part of our business. For the fiscal years ended March 31, 2025, 2024, and 2023, we earned 39.5%, 38.7% and 37.2%, respectively, of our net revenue outside the U.S.
Our Zynga label publishes popular free-to-play mobile games that deliver high quality, deeply engaging entertainment experiences and generates revenue from in-game sales and in-game advertising. Zynga's strategy is to have numerous games in concept development and to determine which titles are best suited for soft launch and worldwide launch based on the achievement of various milestones and KPI thresholds.
Zynga's strategy is to have numerous games in concept development and to determine which titles are best suited for soft launch and worldwide launch based on the achievement of various milestones and key performance indicator (KPI) thresholds.
Talent Assessment & Development and Employee Experience. We strongly believe in internal growth opportunities and career development tracks. We also recognize the importance of our employees staying current in an ever-changing industry.
Our culture, grounded in compassion, collaboration, and a commitment to excellence, supports an inclusive and welcoming environment for prospective employees and the broader community. Talent Assessment & Development and Employee Experience. We are committed to internal growth opportunities and career development tracks. We recognize the importance of our employees staying current in an ever-changing industry.
We are dependent on a limited number of customers that account for a significant portion of our sales. Sales to our five largest customers during the fiscal year ended March 31, 2024, accounted for 79.8% of our net revenue, with Sony, Apple, Google, and Microsoft each accounting for more than 10.0% of our net revenue.
Sales to our five largest customers during the fiscal year ended March 31, 2025, accounted for 81.0% of our net revenue, with Apple, Sony, Google, and Microsoft each accounting for more than 10.0% of our net revenue. 4 We distribute our titles, add-on content, and in-game purchases through direct digital download to consoles, PCs, and mobile devices.
As of March 31, 2024, we had a sales and marketing staff of 1,353 people. 5 Competition In our business, we compete with: • Other interactive entertainment companies, including those offering mobile games, that range in size and cost structure from very small with limited resources to very large with greater financial, marketing, technical, and other resources than ours.
Competition for our titles is influenced by the timing of competitive product releases and the similarity of such products to our titles. In our business, we compete with: • Other interactive entertainment companies that range in size and cost structure from very small with limited resources to very large with greater financial, marketing, technical, and other resources than ours.
Our most recent installment, Grand Theft Auto V , which was released in 2013, has sold-in over 195 million units worldwide and includes access to Grand Theft Auto Online . Rockstar Games continues to invest in the franchise and plans to release Grand Theft Auto VI in the Fall of calendar 2025.
Our most recent installment, Grand Theft Auto V , which was released in 2013, has sold-in over 210 million units worldwide and includes access to Grand Theft Auto Online . Rockstar Games offers its GTA+ membership program, which engages its player community with an array of rotating benefits, including access to classic Rockstar Games titles.
Most of our intellectual property is internally owned and developed, which we believe best positions us financially and competitively. We have established a portfolio of proprietary software content for the major hardware and mobile platforms in a wide range of genres, including action, adventure, family/casual, hyper-casual, role-playing, shooter, social casino, sports, and strategy, which we distribute worldwide.
Our teams have established a portfolio of proprietary software content for the major hardware and mobile platforms, and we aim to be at the forefront of technological innovation. We have a diverse portfolio that spans all key platforms and numerous genres, including action, adventure, family, casual, hyper-casual, role-playing, shooter, social casino, sports, and strategy.
("Sony") PlayStation®4 ("PS4") and PlayStation5 ("PS5"), Microsoft Corporation ("Microsoft") Xbox One® ("Xbox One") and Xbox Series X|S ("Xbox Series X|S"), and Nintendo's Switch TM ("Switch"), as well as personal computers ("PC"), and mobile, including, smartphones and tablets. We deliver our products through physical retail, digital download, online platforms, and cloud streaming services. Our website address is www.take2games.com.
We deliver our products through physical retail, digital download, online platforms, and cloud streaming services. Our website address is www.take2games.com.
We have expanded our relationship with the NBA through the NBA 2K League , a competitive eSports league jointly owned by us and the NBA. Private Division. Our Private Division label is dedicated to bringing titles from the industry's leading creative talent to market and is the publisher, developer, and owner of Kerbal Space Program and OlliOlli World . Zynga.
Private Division. In October 2024, we sold our Private Division label, including our rights to substantially all of the label's titles. The label was dedicated to bringing titles from the industry's leading creative talent to market and was the publisher, developer, and owner of Kerbal Space Program .
We firmly believe that diverse teams are more valuable and effective, and that diversity is key to our success. We are committed to enhancing workforce diversity at Take-Two, and we strive to provide an inclusive workplace in which everyone feels respected, heard, and safe.
Through this committee, we developed a comprehensive, Sustainability Framework that reflects our top priority issues and stakeholder needs. 6 Community & Engagement. We firmly believe that diversity of thought drives the innovation that is integral to our success. We strive to provide an inclusive workplace in which everyone feels respected, heard, and safe.
These efforts and more contributed to Take-Two being named one of Forbes' Best Mid-Size Employers list in 2019, 2021, 2022, and 2024, and one of Newsweek's America's Greatest Workplaces for Diversity, Women, LGBTQ+, and Job Starters in 2024.
These efforts and more contributed to Take-Two being named one of Forbes' Best Mid-Size Employers list for four of the last six years and certified as a Great Place to Work by Fortune every year from 2020 through 2025 (including in the U.K. in 2025). Compensation and Benefits.
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Our strategy is to be the most creative, innovative, and efficient company in the evolving interactive entertainment industry. With our diverse portfolio that spans all key platforms and numerous genres, we strive to create the highest quality, most engaging interactive entertainment franchises and captivate our global audience.
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Our products are designed for console gaming systems, including, but not limited to, the Sony Computer Entertainment, Inc. ("Sony") PlayStation®4 ("PS4") and PlayStation5 ("PS5"), the Microsoft Corporation ("Microsoft") Xbox One® ("Xbox One") and Xbox Series X|S ("Xbox Series X|S"), and the Nintendo Switch TM ("Switch"), as well as mobile, including smartphones and tablets, and personal computers ("PC").
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We have created, acquired, or licensed a group of highly recognizable brands to match the broad consumer demographics that we serve, ranging from adults to children and game enthusiasts to casual gamers.
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Our strategy is to create hit entertainment experiences, delivered on every platform relevant to our audience through a variety of sound business models. Our pillars - creativity, innovation, and efficiency - guide us as we strive to create the highest quality, most captivating experiences for our consumers.
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Another cornerstone of our strategy is to support the success of our products in the 1 marketplace through innovative marketing programs and global distribution on platforms and through channels that are relevant to our target audience. Support World-Class Creative Teams. Creativity and innovation remain two of the core tenets of our organization and are the lifeblood of our ongoing success.
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This enables us to appeal to a wide array of consumers and demographic groups worldwide, ranging from game 1 enthusiasts to casual gamers. Most of our intellectual property is internally owned and developed, which we believe best positions us financially and competitively. In addition, we license selectively some highly recognizable renowned brands, especially in sports entertainment.
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We have 9,639 employees working in game development in studios around the world, including some of the most well-known names in the business. The creative teams at Rockstar Games, 2K, Private Division, and Zynga are renowned for their consistent ability to deliver games that set new benchmarks for excellence.
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We support our products with innovative marketing programs created by our internal global marketing teams. Attract and Retain the Best Talent in the Business. Our headcount includes 12,928 full-time employees as of March 31, 2025, including 10,096 in development studios.
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In addition, Private Division is dedicated to bringing titles from top independent developers to market. Our teams balance the art and science of game making by combining creative innovation with a player-centric, data driven approach to delight players.
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We are proud of the culture we have established and believe that it enables us to attract and retain some of the most talented individuals in our industry and consistently set new benchmarks for excellence.
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We support our teams by focusing on talent acquisition and retention, and we seek to foster an environment where people build long-term careers and do their best work. Focus on Core Strength of Producing High-Quality Titles. We focus on publishing high-quality titles based on internally owned and developed intellectual properties.
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By empowering our colleagues to embrace an entrepreneurial mindset and to take calculated risks, we believe that we have created an environment where our people can thrive.
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We currently own the intellectual property rights to 48 proprietary brands. In addition, we selectively develop titles based on licensed properties, including sports leagues, and also publish externally developed titles. We take steps to optimize efficiency and effectiveness in our operations while also maintaining high standards of quality and customer satisfaction.
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We believe that we deploy best-in-class recruiting practices to attract new talent and encourage our people to pursue satisfying, long-term career opportunities with us by providing competitive compensation plans that align our people with our shareholders, extensive employee benefits and well-being programs, and numerous learning and development programs to encourage career growth and progression. Develop Robust Player Relationships.
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We apply this process to all of our products, whether internally or externally developed. Our product investment review process includes reviews of each project at various stages of development by our executive management team and the senior management of our publishing labels and also includes coordination between our sales and marketing personnel before the launch of titles.
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Many of our releases offer a steady cadence of post-launch content to drive further engagement with our franchises, including virtual currency, add-on content, and in-game purchases. This approach enables us to maintain consistent, positive relationships with our players, sustain ongoing relevance for our intellectual properties, and enhance the performance of our titles.
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This disciplined approach to product investment is expected to enhance the competitiveness and profitability of our titles. We develop our products using a combination of our internal development teams and external development resources acting under contract with us. We select external developers based on their track record and expertise in developing products in the same category or genre.
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We continue to invest in tools and infrastructure to deepen our understanding of our players and to strengthen our relationships with them. This includes our customer data platform and our customer insights and analytics, which inform our go-to-market strategy and allow us to maintain ongoing communications with our players that are tailored to their interests.
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One developer will generally produce the same game for multiple platforms and will also produce sequels to the original game. We believe that selecting and using development resources in this manner allows us to leverage the particular expertise of our internal and external development resources, which is designed to maintain our quality standards for our products.
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We also engage with emerging marketing platforms, technologies, and services to enhance our reach and capabilities, including our direct-to-consumer commerce platform, through which players can purchase in-game offerings, primarily for our mobile titles.
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Leverage Emerging Technologies, Platforms, and Distribution Channels, Including Digitally-Delivered Content. Interactive entertainment, played online and on mobile, presents significant opportunities to enhance our growth and profitability. In addition, the interactive entertainment software industry is delivering the majority of content for traditional platforms through digital download.
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The enjoyment and safety of our players is of paramount importance to us, and we are committed to providing safe, inclusive, and welcoming environments in which our communities can gather and enjoy our services free of harassment, hate speech, toxic behavior, abuse, and other offensive content and conduct. Increase Scale and Profitability.
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Virtually all of our products are available through direct digital download (from websites we own or third-party websites). We will continue to invest in emerging opportunities in mobile and online gameplay, particularly for our wholly-owned franchises, as well as downloadable content and microtransactions that enable gamers to pay to download additional content to enhance their game playing experience.
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A key component of our strategy is to build a portfolio and forward pipeline of commercially successful franchises across console, PC, and mobile platforms.
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We aim to drive ongoing engagement and incremental revenue from recurrent consumer spending on our titles through virtual currency, add-on content, and in-game purchases. Expand International Business. The global market for interactive entertainment continues to grow, and we seek to increase our presence internationally, particularly in Asia, the Middle East, and Latin America.
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We believe that we can increase our scale by launching new intellectual properties; growing our core franchises through high-quality, fresh sequels, relevant brand extensions, and robust live services; and expanding our intellectual property portfolio and talent base through strategic acquisitions and partnerships. We provide continuous recurrent consumer spending offerings to fuel player engagement and growth.
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We are continuing to execute on our growth initiatives in Asia, where our strategy is to build on our licensing relationships and also broaden the distribution of our existing products and expand our online gaming presence, especially in China. 2K has secured a multi-year license from the NBA to develop an online version of our NBA simulation game in China, Taiwan, Hong Kong, and Macau.
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As we grow our scale, we seek to run our business in a highly efficient manner in an effort to optimize and enhance our profitability. We regularly assess opportunities to contain or reduce costs, including leveraging shared services and technology. Identify and Lead New Paradigms and Market Trends.
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Our first such title, NBA 2K Online , a free-to-play NBA simulation game based on the console edition of NBA 2K , which was co-developed by 2K and Tencent, is the top online PC sports game in China with over 60 million registered users.
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Our teams aspire to be at the forefront of innovation in our industry. We are constantly evaluating and investing selectively in emerging platforms, technologies, business models, and geographies that we believe will help us grow and strengthen our business. In particular, we believe that there are meaningful opportunities to expand our presence in Asia, the Middle East, and Latin America.
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We have released two iterations of NBA 2K Online and continue to enhance the title with new features. We are also a direct publisher in Japan and South Korea.
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Within these regions, China is our most established market, where we offer NBA 2K Online and Civilization: Eras and Allies through our partnership with Tencent. Our NBA 2K Online business is the top online PC sports game in China.
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While we retain title to all intellectual property, in some regions, local publishers, under license agreements, are responsible for localization of software content, distribution, and marketing of the products in their respective local markets.
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We also direct our teams to anticipate and actively address changes in consumer behavior and technology so that we can evolve our business as new dynamics develop.
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Agreements with third-party developers generally give us exclusive publishing and marketing rights and require us to make development payments, pay royalties based on product sales, and satisfy other conditions. Development payments for software titles are typically recoupable against royalties otherwise due to developers based on software sales.
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Rockstar Games continues to invest in the franchise and announced that Grand Theft Auto VI , which was expected to launch in Fall of Calendar 2025, is now planned for release on May 26, 2026, during our fiscal year 2027.
Removed
Our agreements with third-party developers generally provide us with the right to monitor development efforts and to cease making development payments if specified development milestones are not satisfied. We also regularly monitor the level of development payments in light of the expected sales for the related titles.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe expect to provide for a valuation allowance until other significant positive evidence arises that suggests that the benefits associated with the deferred tax assets are more likely than not to be realized. 30 The Tax Cuts and Jobs Act of 2017 (“TCJA”) eliminated the ability to deduct research and development expenditures currently and requires taxpayers to capitalize and amortize them pursuant to IRC Section 174.
Biggest changeThe Tax Cuts and Jobs Act of 2017 (“TCJA”) eliminated the ability to deduct research and development expenditures currently and requires taxpayers to capitalize and amortize them pursuant to IRC Section 174. Although Congress is considering legislation that would modify the capitalization and amortization requirement, we have no assurance that the requirement will be deferred, repealed, or otherwise modified.
Additionally, competitors may develop content that imitates or competes with our best-selling games, potentially reducing our sales or our ability to charge the same prices we have historically charged for our products. These competing products may take a larger share of consumer spending than anticipated, which could cause product sales to fall below expectations.
Additionally, competitors may develop content that imitates or competes with our best-selling games, potentially reducing our sales or our ability to charge the same prices we have historically charged for our products. These competing products may take a larger share of consumer spending than anticipated, which could cause our product sales to fall below expectations.
In addition, the interactive entertainment industry is highly seasonal, with sales typically higher during the fourth calendar quarter, due primarily to increased demand for games during the holiday season. Demand for and sales of titles in our NBA 2K series are also seasonal in that they are typically released just prior to the start of the NBA season.
In addition, the interactive entertainment industry is highly seasonal, with sales typically higher during the fourth calendar quarter, primarily due to increased demand for games during the holiday season. Demand for and sales of titles in our NBA 2K series are also seasonal in that they are typically released just prior to the start of the NBA season.
Even if we do succeed in acquiring or investing in a business, intellectual property or other asset, such acquisitions and investments involve a number of risks, including: • retaining key employees and maintaining the key business and customer relationships of the businesses we acquire; • cultural challenges associated with integrating employees from an acquired company or business into our organization; • the possibility that the combined company would not achieve the expected benefits, including any anticipated operating and product synergies, of the acquisition as quickly as anticipated or that the costs of, or operational difficulties arising from, an acquisition would be greater than anticipated; • the potential for the acquired business to underperform relative to our expectations and the acquisition price; • unexpected tax consequences from the acquisition, or the tax treatment of the acquired business's operations going forward, giving rise to incremental tax liabilities that are difficult to predict; • significant acquisition-related accounting adjustments, particularly relating to an acquired company's deferred revenue, that may cause reported revenue and profits of the combined company to be lower than the sum of their stand-alone revenue and profits; • significant accounting charges resulting from the completion and integration of a sizable acquisition and increased capital expenditures, including potential impairment charges incurred to write down the carrying amount of intangible assets generated as a result of an acquisition; • the possibility that significant acquisitions, when not managed cautiously, may result in the over-extension of our existing operating infrastructures, internal controls and information technology systems; 18 • the possibility that we will not discover important facts during due diligence that could have a material adverse effect on the value of the businesses we acquire, including the possibility that a change of control of a company we acquire triggers a termination of contractual or intellectual property rights important to the operation of its business; • the need to integrate an acquired company's accounting, management information, human resource and other administrative systems to permit effective management and timely reporting, and the need to implement or remediate controls, procedures and policies appropriate for a public company in an acquired company that, prior to the acquisition, lacked these controls, procedures and policies; • litigation or other claims in connection with, or inheritance of claims or litigation risks as a result of, an acquisition, including claims from terminated employees, customers or other third parties; • to the extent that we engage in strategic transactions outside of the U.S., we face additional risks, including risks related to integration of operations across different cultures and languages, currency risks and the particular economic, political and regulatory risks associated with specific countries; and • the need to implement controls, procedures and policies appropriate for a larger, U.S.-based public company at companies that prior to acquisition may not have as robust controls, procedures and policies, particularly, with respect to the effectiveness of cyber and information security practices and incident response plans, compliance with data privacy and protection and other laws and regulations protecting the rights of players and customers, and compliance with U.S.-based economic policies and sanctions which may not have previously been applicable to the acquired company’s operations.
Even if we do succeed in acquiring or investing in a business, intellectual property or other asset, such acquisitions and investments involve a number of risks, including: • retaining key employees and maintaining the key business and customer relationships of the businesses we acquire; • cultural challenges associated with integrating employees from an acquired company or business into our organization; • the possibility that the combined company would not achieve the expected benefits, including any anticipated operating and product synergies, of the acquisition as quickly as anticipated or that the costs of, or operational difficulties arising from, an acquisition would be greater than anticipated; • the potential for the acquired business to underperform relative to our expectations and the acquisition price; • unexpected tax consequences from the acquisition, or the tax treatment of the acquired business's operations going forward, giving rise to incremental tax liabilities that are difficult to predict; • significant acquisition-related accounting adjustments, particularly relating to an acquired company's deferred revenue, that may cause reported revenue and profits of the combined company to be lower than the sum of their stand-alone revenue and profits; • significant accounting charges resulting from the completion and integration of a sizable acquisition and increased capital expenditures, including potential impairment charges incurred to write down the carrying amount of intangible assets generated as a result of an acquisition; • the possibility that significant acquisitions, when not managed cautiously, may result in the over-extension of our existing operating infrastructures, internal controls and information technology systems; • the possibility that we will not discover important facts during due diligence that could have a material adverse effect on the value of the businesses we acquire, including the possibility that a change of control of a company we acquire triggers a termination of contractual or intellectual property rights important to the operation of its business; • the need to integrate an acquired company's accounting, management information, human resource and other administrative systems to permit effective management and timely reporting, and the need to implement or remediate controls, procedures and policies appropriate for a public company in an acquired company that, prior to the acquisition, lacked these controls, procedures and policies; • litigation or other claims in connection with, or inheritance of claims or litigation risks as a result of, an acquisition, including claims from terminated employees, customers or other third parties; • to the extent that we engage in strategic transactions outside of the U.S., we face additional risks, including risks related to integration of operations across different cultures and languages, currency risks and the particular economic, political and regulatory risks associated with specific countries; and • the need to implement controls, procedures and policies appropriate for a larger, U.S.-based public company at companies that prior to acquisition may not have as robust controls, procedures and policies, particularly, with respect to the effectiveness of cyber and information security practices and incident response plans, compliance with data privacy and protection and other laws and regulations protecting the rights of players and customers, and compliance with U.S.-based economic policies and sanctions which may not have previously been applicable to the acquired company’s operations.
In some of our games, such as CSR Racing 2 , Dragon City, Empires & Puzzles , FarmVille 3 , Golf Rival , Harry Potter: Puzzles & Spells , Merge Dragons! , Merge Magic! , Monster Legends, NBA 2K , Top Eleven, Top Troops, WWE 2K , and Zynga Poker , certain mechanics may be deemed as “loot boxes.” New regulation by the FTC, U.S. states or other international jurisdictions, which may vary significantly across jurisdictions and which we may be required to comply with, could require that these game mechanics be modified or removed from games, increase the costs of operating our games, impact player engagement and monetization or otherwise harm our business performance.
In some of our games, such as CSR Racing 2 , Dragon City, Empires & Puzzles , FarmVille 3 , Golf Rival , Harry Potter: Puzzles & Spells , Merge Dragons! , Merge Magic! , Monster Legends, NBA 2K , Top Eleven, WWE 2K , and Zynga Poker , certain mechanics may be deemed as “loot boxes.” New regulation by the FTC, U.S. states or other international jurisdictions, which may vary significantly across jurisdictions and with which we may be required to comply, could require that these game mechanics be modified or removed from games, increase the costs of operating our games, impact player engagement and monetization or otherwise harm our business performance.
If this were to occur, we might be required to alter some of our 29 games to address these additional requirements or seek licenses, authorizations, or approvals from relevant regulators, the granting of which may be dependent on us meeting certain capital and other requirements, and we may be subject to additional regulation and oversight, such as reporting to regulators, all of which could significantly increase our operating costs.
If this were to occur, we might be required to alter some of our games to address these additional requirements or seek licenses, authorizations, or approvals from relevant regulators, the granting of which may be dependent on us meeting certain capital and other requirements, and we may be subject to additional regulation and oversight, such as reporting to regulators, all of which could significantly increase our operating costs.
The ability of our Board of Directors to create and issue a new series of preferred stock and certain provisions of Delaware law, our certificate of incorporation and bylaws could impede a merger, takeover or other business combination involving us or discourage a potential acquirer from making a tender offer for our common stock, which, under certain circumstances, could reduce the market price of our common stock and the value of any outstanding notes.
The ability of our Board to create and issue a new series of preferred stock and certain provisions of Delaware law, our certificate of incorporation and bylaws could impede a merger, takeover or other business combination involving us or discourage a potential acquirer from making a tender offer for our common stock, which, under certain circumstances, could reduce the market price of our common stock and the value of any outstanding notes.
See “ Part II, Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations - Cybersecurity Incident ” in our Annual Report on Form 10-K for the fiscal year ended March 31, 2023 for further discussion. Our software supply chain may also be subject to attacks, which would result in future security incidents and breaches.
See “ Part II, Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations - Cybersecurity Incident ” in our Annual Report on Form 10-K for the fiscal year ended March 31, 2023 for further discussion. Our software supply chain may also be subject to attacks, which may result in future security incidents and breaches.
These third-party networks, as well as our own internal systems and websites, and the related security measures may be breached as a result of third-party action, including intentional misconduct by computer hackers, employee error, malfeasance or otherwise, and result in someone obtaining unauthorized access to our customers' information or our data, including our intellectual property and other confidential business information, or our information technology systems.
These third-party networks, as well as our own internal systems and 14 websites, and the related security measures may be breached as a result of third-party action, including intentional misconduct by computer hackers, employee error, malfeasance or otherwise, and result in someone obtaining unauthorized access to our customers' information or our data, including our intellectual property and other confidential business information, or our information technology systems.
Moreover, current and future competitors may also make strategic acquisitions or establish cooperative relationships among themselves or with others, including our current or future business partners or third-party software providers. By doing so, these competitors may increase their scale, their ability to meet the needs of existing or prospective players and compete for 9 similar human capital.
Moreover, current and future competitors may also make strategic acquisitions or establish cooperative relationships among themselves or with others, including our current or future business partners or third-party software providers. By doing so, these competitors may increase their scale, their ability to meet the needs of existing or prospective players and compete for similar human capital.
We rely upon third-party digital delivery platforms, such as Microsoft's Xbox Live, PlayStation Network, Steam, Epic, and other third-party service providers, to provide connectivity from the consumer to our digital products and our online services. Connectivity issues could prevent customers from accessing this content and our ability to successfully market and sell 20 our products could be adversely affected.
We rely upon third-party digital delivery platforms, such as Microsoft's Xbox Live, PlayStation Network, Steam, Epic, and other third-party service providers, to provide connectivity from the consumer to our digital products and our online services. Connectivity issues could prevent customers from accessing this content and our ability to successfully market and sell our products could be adversely affected.
Unauthorized third parties, for example, may be able to copy or to reverse engineer our software to obtain and use programming or production techniques that we regard as proprietary. Well organized piracy operations have also proliferated in recent years, resulting in the ability to download pirated copies of our software over the Internet.
Unauthorized third parties, for example, may be able to copy 24 or to reverse engineer our software to obtain and use programming or production techniques that we regard as proprietary. Well organized piracy operations have also proliferated in recent years, resulting in the ability to download pirated copies of our software over the Internet.
Companies may also adopt policies that prohibit employees from accessing Apple, Google, Facebook and our website or any social platform. If companies or governmental entities block or limit such or otherwise adopt policies restricting players from playing our games, our business could be negatively impacted and could lead to the loss or slower growth of our player base.
Companies 26 may also adopt policies that prohibit employees from accessing Apple, Google, Facebook and our website or any social platform. If companies or governmental entities block or limit such or otherwise adopt policies restricting players from playing our games, our business could be negatively impacted and could lead to the loss or slower growth of our player base.
The number of people using mobile Internet-enabled devices has increased dramatically over time, and we expect that this trend will continue. However, the mobile market, particularly the market for mobile games, may not grow in the way we anticipate. Our future success is substantially dependent upon the continued growth of the market for mobile games.
The number of people using mobile Internet-enabled devices has increased dramatically over time, and we expect that this trend will continue. However, the mobile market, particularly the market for mobile games, may not grow in the way we anticipate. Our 10 future success is substantially dependent upon the continued growth of the market for mobile games.
In connection with this activity (the “Cybersecurity Incident”), we have incurred certain immaterial incremental one-time costs related to consultants, experts and data recovery efforts and expect to incur additional costs related to cybersecurity protections in the future. We have implemented and will continue to implement a variety of measures to enhance further our cybersecurity protections.
In connection with this activity (the “Cybersecurity Incident”), we have incurred certain immaterial incremental one-time costs related to consultants, experts and data recovery efforts and expect to incur additional costs related to cybersecurity protections in the future. We have 13 implemented and will continue to implement a variety of measures to enhance further our cybersecurity protections.
Further, if one of our games is re‑rated for any reason, a ratings 24 organization could require corrective actions, which could include a recall, retailers could refuse to sell it and demand that we accept the return of any unsold or returned copies or consumers could demand a refund for copies previously purchased.
Further, if one of our games is re‑rated for any reason, a ratings organization could require corrective actions, which could include a recall, retailers could refuse to sell it and demand that we accept the return of any unsold or returned copies or consumers could demand a refund for copies previously purchased.
Further, as we increase our downloadable content and add new features to our online services, user playing patterns can affect our estimate of the service period, and we 31 could be required to recognize revenues, and defer related costs, over a shorter or longer period of time than we initially allocated.
Further, as we increase our downloadable content and add new features to our online services, user playing patterns can affect our estimate of the service period, and we could be required to recognize revenues, and defer related costs, over a shorter or longer period of time than we initially allocated.
Negative perceptions could arise despite our efforts, though, and may result in loss of engagement with our products 32 and services, increased scrutiny from government bodies and consumer groups, and/or litigation, any of which could negatively impact our business. Catastrophic events and climate change may have a long-term impact on our business.
Negative perceptions could arise despite our efforts, though, and may result in loss of engagement with our products and services, increased scrutiny from government bodies and consumer groups, and/or litigation, any of which could negatively impact our business. Catastrophic events and climate change may have a long-term impact on our business.
We have entered into agreements with third parties to acquire the rights to publish and distribute interactive entertainment software as well as to use licensed intellectual properties in our titles. These agreements typically require us to make development payments, pay royalties, and satisfy other conditions.
We have entered into 15 agreements with third parties to acquire the rights to publish and distribute interactive entertainment software as well as to use licensed intellectual properties in our titles. These agreements typically require us to make development payments, pay royalties, and satisfy other conditions.
In addition, we could be required to, or may find it necessary to, offer a refund for the product or service, suspend the availability 21 or sale of the product or service or expend significant resources to cure the defect, bug or error each of which could significantly harm our business and operating results.
In addition, we could be required to, or may find it necessary to, offer a refund for the product or service, suspend the availability or sale of the product or service or expend significant resources to cure the defect, bug or error each of which could significantly harm our business and operating results.
Further, and most notably in the mobile ecosystem, companies that provide the platforms on which our games are played are changing the terms on how publishers can collect and use personal data obtained from users on those platforms. Player use of our games is subject to our privacy policy and terms of service ("TOS").
Further, and most notably in the mobile ecosystem, companies that provide the platforms on which our games are played are changing the terms on which publishers can collect and use personal data obtained from users on those platforms. Player use of our games is subject to our privacy policy and terms of service ("TOS").
Many large companies, such as Amazon, Facebook and Google, invest significantly in data analytics to make their websites and platforms more attractive to advertisers. For our advertising business to continue to succeed, we need to continue to demonstrate the reach of our player network and success of 17 our advertising partners.
Many large companies, such as Amazon, Facebook and Google, invest significantly in data analytics to make their websites and platforms more attractive to advertisers. For our advertising business to continue to succeed, we need to continue to demonstrate the reach of our player network and success of our advertising partners.
If our competitors develop more successful products or services at lower price points or based on payment models perceived as offering better value, or if we do not continue to develop consistently high quality and well-received products and services, our revenue and profitability may decline.
If our competitors develop more successful products or services at lower price points or based on 22 payment models perceived as offering better value, or if we do not continue to develop consistently high quality and well-received products and services, our revenue and profitability may decline.
Further, in 2019, the World Health Organization included "gaming disorder" in the 11th revision of the International Classification of Diseases, leading some to consider legislation and policies aimed at addressing this issue, and, more recently prompting lawsuits against many in the industry, including us.
Further, in 2019, the World Health Organization included "gaming disorder" in the 11th revision of the International Classification of Diseases, leading some to consider legislation and policies aimed at addressing this issue, and, more recently prompting lawsuits against many in 23 the industry, including us.
In addition, we do not currently offer our games on all mobile devices. If the mobile devices on which our games are available decline in popularity or become obsolete faster than anticipated, we could experience a decline in revenue and bookings and may not achieve the anticipated return on our development efforts.
In addition, we do not currently offer our games on all mobile devices. If the mobile devices on which our games are available decline in popularity or become obsolete faster than anticipated, we could experience a decline in revenue and may not achieve the anticipated return on our development efforts.
Additionally, if the popularity of a franchise declines, as has happened in the past with other 22 popular franchises, we may have to write off the unrecovered portion of the underlying intellectual property assets, which could negatively impact our business.
Additionally, if the popularity of a franchise declines, as has happened in the past with other popular franchises, we may have to write off the unrecovered portion of the underlying intellectual property assets, which could negatively impact our business.
We also face competition from online game developers and distributors who have primarily focused on specific international markets and with high-profile companies with significant online presences with new and expanded mobile gaming offerings, such as Apple, Google, and Microsoft.
We also face competition from online game developers and distributors who have primarily focused on 8 specific international markets and with high-profile companies with significant online presences with new and expanded mobile gaming offerings, such as Apple, Google, and Microsoft.
We have policies and procedures designed to ensure compliance with applicable laws and regulations, but we cannot assure you that we will not be deemed to have violated any such laws and regulations. Several proposals have been made for federal legislation to regulate our industry.
We have policies and procedures designed to ensure compliance with applicable laws and regulations, but we cannot assure that we will not be deemed to have violated any such laws and regulations. Several proposals have been made for federal legislation to regulate our industry.
Additionally, we derive a significant portion of our revenue from distribution of our games on the Apple App Store and the Google Play Store, and the virtual items we sell in our games are purchased using the payment processing systems of 11 these platform providers.
Additionally, we derive a significant portion of our revenue from distribution of our games on the Apple App Store and the Google Play Store, and the virtual items we sell in our games are purchased using the payment processing systems of these platform providers.
We are required to comply with the covenants set forth in the indentures governing our outstanding indebtedness, including our Senior Notes, Convertible Notes, and 2022 Credit Agreement. Our ability to comply with these covenants may be 25 affected by events beyond our control.
We are required to comply with the covenants set forth in the indentures governing our outstanding indebtedness, including our Senior Notes, Convertible Notes, and 2022 Credit Agreement. Our ability to comply with these covenants may be affected by events beyond our control.
Inflation has the potential to adversely affect our business, results of operations, financial position and liquidity by increasing our overall cost structure, particularly if we are unable to achieve commensurate increases in the prices we charge our customers.
Inflation has the potential to adversely affect our business, results of operations, financial position and liquidity by increasing our overall cost structure, particularly if we are unable to achieve commensurate increases in the prices we charge 33 our customers.
In addition, because our products compete with 12 a vast array of other interactive entertainment software products that also are available on these hardware platforms, a hardware platform manufacturer may give priority to those competing products.
In addition, because our products compete with a vast array of other interactive entertainment software products that also are available on these hardware platforms, a hardware platform manufacturer may give priority to those competing products.
We have banned players as a result of such activities. We have also issued DMCA notices and filed lawsuits against third parties attempting to “sell” game accounts and virtual items from our games outside of our games.
We have banned players as a 25 result of such activities. We have also issued DMCA notices and filed lawsuits against third parties attempting to “sell” game accounts and virtual items from our games outside of our games.
Risks related to legal or regulatory compliance 26 Companies and governmental agencies may restrict access to platforms, our website, mobile applications or the Internet generally, which could have a negative impact on our business.
Risks related to legal or regulatory compliance Companies and governmental agencies may restrict access to platforms, our website, mobile applications or the Internet generally, which could have a negative impact on our business.
Any theft and/or unauthorized use or publication of our trade secrets and other confidential business information because of such an event could adversely affect our competitive position, reputation, 13 brand, and future sales of our products.
Any theft and/or unauthorized use or publication of our trade secrets and other confidential business information because of such an event could adversely affect our competitive position, reputation, brand, and future sales of our products.
The risk could also be affected by events within our control, such as the migration of data among data centers and to third-party hosted environments, and the performance of upgrades and maintenance on our systems.
The risk could also be affected by events substantially within our control, such as the migration of data among data centers and to third-party hosted environments, and the performance of upgrades and maintenance on our systems.
From time to time, objectionable and offensive or 15 potentially dangerous consumer content may be posted to a gaming or other site with online chat features or game forums which allow consumers to post comments.
From time to time, objectionable and offensive or potentially dangerous consumer content may be posted to a gaming or other site with online chat features or game forums which allow consumers to post comments.
In addition, there are ongoing academic, political and regulatory discussions in the U.S., Europe, Middle East, Asia, Australia, Brazil and other jurisdictions regarding whether certain game genres, such as social casino, or certain game mechanics, such as “loot boxes,” should be subject to a higher level or different type of regulation than other game genres or mechanics to protect consumers, in particular minors and vulnerable adults, and, if so, what such regulation should include.
In addition, there are ongoing academic, political and regulatory discussions in the U.S., Europe, Middle East, Asia, Australia, Brazil and other jurisdictions regarding whether certain game genres, such as social casino, or certain game mechanics, such as “loot boxes,” or in-game "virtual currencies," should be subject to a higher level or different type of regulation than other game genres or mechanics to protect consumers, in particular minors and vulnerable adults, and, if so, what such regulation should include.
Internationally, local competitors may have a greater brand recognition than us in their local country and a stronger understanding of local culture and commerce. They may also offer their products and services in local languages we not offer.
Internationally, local competitors may have a greater brand recognition than us in their local country and a stronger understanding of local culture and commerce. They may also offer their products and services in local languages we do not offer.
Our Board of Directors has the power, without stockholder approval, to adopt a stockholder rights plan and/or to designate the terms of one or more series of preferred stock and issue shares of preferred stock.
Our Board has the power, without stockholder approval, to adopt a stockholder rights plan and/or to designate the terms of one or more series of preferred stock and issue shares of preferred stock.
Summary of Risk Factors Material risks that may affect our business, operating results and financial condition include, but are not necessarily limited to: Risks relating to our business and industry • Our industry is highly competitive • Uncertainty of achieving market acceptance, delays or disruptions for our products may have an adverse effect • We face development risks and must adapt to changes in software technologies • The development and use of artificial intelligence into our products may present operational and reputational risks • Increased use of mobile devices for gaming will drive future growth of mobile gaming • Increased competition for retailer support could increase expenses • Our ability to develop successful products for current video game platforms • We require approval of hardware licensors to publish titles • Reliance on complex information technology systems and networks and potential adverse impact of security breaches • Potential adverse impact of inadequate consumer data protection • Dependence on key management and product development personnel • Attracting, managing, and retaining our talent is critical to our success • Offensive consumer-created content can harm our results of operations or reputation • We rely on software development arrangements with third parties • The risk of distributors, development, and licensing partners or other third parties being unable to honor their commitments or otherwise putting our brand at risk • Increasing importance of digital sales and free-to-play games exposes us to the risks of that business model • We must compete for advertisements and offers that are incorporated into our free-to-play games • Our acquisitions and investments may not have the anticipated results • International operations risks • The loss of server capacity, lack of sufficient bandwidth, or connectivity issues could cause our business to suffer • Use of open-source software exposes us to risks • Our software is susceptible to errors • The continued ability to acquire and maintain license to intellectual property is key • We may experience fluctuations in the recurring portion of our business • We are dependent on the timing of our product releases • We are dependent on the future success of our Grand Theft Auto products and other “hit” titles • Adverse effects of price protection and returns • A limited number of customers account for a significant portion of our sales • Content policies could negatively affect sales • Entertainment Software Rating Board ratings for our products could negatively affect our ability to distribute and sell • The competitive position and value of our products could be adversely affected by unprotected intellectual property • We have a significant amount of outstanding debt • The value of our virtual items is highly dependent on how we manage the economies in our games • There is potential for unauthorized or fraudulent transactions of accounts and virtual items outside of our games Risks related to legal or regulatory compliance • Government regulation of the internet can affect our business • Legislation could subject us to claims or otherwise harm our business • Failure to comply with laws and regulations, including data privacy, could harm our business • Adverse effect of alleged or actual infringement on the intellectual property rights of third parties Risks related to financial and economic condition • Provisions in our charter documents and debt agreements may impede or discourage a takeover • Adverse effects of changes in tax rates and additional tax liabilities 8 • We are subject to risks and uncertainties of international trade, including foreign currency fluctuations • Potential adverse effects of existing or future accounting standards • Adverse effects of declines in consumer spending and changes in the economy General Risk Factors • Additional issuances of equity securities would cause dilution and could affect the market price of our common stock • We are subject to risks related to corporate and social responsibility and reputation • Catastrophic events and climate change may have a long-term impact on our business • We may be adversely affected by the effects of inflation • We are and may become involved in legal proceedings that may result in adverse outcomes Risks relating to our business and industry The interactive entertainment software industry is highly competitive.
Summary of Risk Factors Material risks that may affect our business, operating results and financial condition include, but are not necessarily limited to: Risks relating to our business and industry • Our industry is highly competitive • Uncertainty of achieving market acceptance, delays or disruptions for our products may have an adverse effect • We face development risks and must adapt to changes in software technologies • The development and use of artificial intelligence ("AI") into our products may present operational and reputational risks • Increased use of mobile devices for gaming will drive future growth of mobile gaming • Increased competition for retailer support could increase expenses • Our ability to develop successful products for current video game platforms 7 • We require approval of hardware licensors to publish titles • Reliance on complex information technology systems and networks and potential adverse impact of security breaches • Potential adverse impact of inadequate consumer data protection • Dependence on key management and product development personnel • Attracting, managing, and retaining our talent is critical to our success • Offensive consumer-created content can harm our results of operations or reputation • We rely on software development arrangements with third parties • The risk of distributors, development, and licensing partners or other third parties being unable to honor their commitments or otherwise putting our brand at risk • Increasing importance of digital sales and free-to-play games exposes us to the risks of that business model • We must compete for advertisements and offers that are incorporated into our free-to-play games • Our acquisitions and investments may not have the anticipated results • International operations risks • The loss of server capacity, lack of sufficient bandwidth, or connectivity issues could cause our business to suffer • Use of open-source software exposes us to risks • Our software is susceptible to errors • The continued ability to acquire and maintain license to intellectual property is key • We may experience declines or fluctuations in the recurring portion of our business • We are dependent on the timing of our product releases • We are dependent on the future success of our Grand Theft Auto products and other hit titles • Adverse effects of price protection and returns • A limited number of customers account for a significant portion of our sales • Content policies could negatively affect sales • ESRB ratings for our products could negatively affect our ability to distribute and sell • The competitive position and value of our products could be adversely affected by unprotected intellectual property • The value of our virtual items is highly dependent on how we manage the economies in our games • There is potential for unauthorized or fraudulent transactions of accounts and virtual items outside of our games • We have a significant amount of outstanding debt Risks related to legal or regulatory compliance • Government regulation of the Internet can affect our business • Legislation could subject us to claims or otherwise harm our business • Failure to comply with laws and regulations, including data privacy, could harm our business • Adverse effect of alleged or actual infringement on the intellectual property rights of third parties Risks related to financial and economic condition • Provisions in our charter documents and debt agreements may impede or discourage a takeover • Adverse effects of changes in tax rates and additional tax liabilities • We are subject to risks and uncertainties of international trade, including foreign currency fluctuations • Potential adverse effects of existing or future accounting standards • Adverse effects of declines in consumer spending and changes in the economy General Risk Factors • Additional issuances or sales of equity securities by us would dilute the ownership of our existing stockholders and could adversely affect the market price of our common stock • We are subject to risks related to corporate and social responsibility and reputation • Catastrophic events and climate change may have a long-term impact on our business • We may be adversely affected by the effects of inflation • We are and may become involved in legal proceedings that may result in adverse outcomes Risks relating to our business and industry The interactive entertainment software industry is highly competitive.
A security incident, such as the Cybersecurity Incident, that leads to disclosure of consumer information (including personal information) could harm our reputation, compel us to comply with disparate breach notification laws in various jurisdictions and otherwise subject us to liability under laws that protect personal information, any of which could result in increased costs or loss of revenue.
A security incident, such as the Cybersecurity Incident, that leads to disclosure of consumer information (including personal information) could harm our reputation, compel us to comply with disparate breach notification laws in various locations and otherwise subject us to liability under laws that protect personal information, any of which could result in increased costs or loss of revenue.
We have been and may be subject to lawsuits, governmental inquiries and regulation or restrictions, and consumer backlash (including decreased sales and harmed reputation), as a result of consumers posting offensive content. We may also be subject to consumer backlash from comments made in response to postings we make on social media sites such as Facebook, YouTube and Twitter.
We have been and may be subject to lawsuits, governmental inquiries and regulation or restrictions, and consumer backlash (including decreased sales and harmed reputation), as a result of consumers posting offensive content. We may also be subject to consumer backlash from comments made in response to postings we make on social media sites such as Facebook, YouTube and X.
In either the U.S. or other countries, trade legislation, such as a change in the current tariff structures, import/export compliance laws, a change in the relationship between either us or the U.S. and any country in which we have significant operations or sales, or other trade laws or policies, could adversely affect our ability to sell or to distribute in international markets.
In either the U.S. or other countries, trade legislation, such as a change in or volatility around the current tariff structures, import/export compliance laws, a change in the relationship between either us or the U.S. and any country in which we have significant operations or sales, or other trade laws or policies, could adversely affect our ability to sell or to distribute in international markets.
If appropriate opportunities present themselves, we may acquire or make investments in businesses, intellectual properties and other assets that we believe are strategic, such as our acquisition of Zynga and our pending acquisition of Gearbox. We may not be able to identify, negotiate or finance any future acquisition or investment successfully.
If appropriate opportunities present themselves, we may acquire or make investments in businesses, intellectual properties and other assets that we believe are strategic, such as our acquisitions of Zynga and Gearbox. We may not be able to identify, negotiate or finance any future acquisition or investment successfully.
In addition, compliance with new and possibly inconsistent regulations for different territories could be costly, delay, or prevent the release of our products in those territories. The laws and regulations concerning data privacy and certain other aspects of our business are continually evolving. Failure to comply with these laws and regulations could harm our business.
In addition, compliance with new and possibly inconsistent regulations for different territories could be costly, delay, or prevent the release of our products in those territories. The laws and regulations concerning data privacy, consumer protection, and certain other aspects of our business are continually evolving. Failure to comply with these laws and regulations could harm our business.
Our titles also compete with other forms of entertainment, such as social media, in addition to motion pictures, television and audio and video products featuring similar themes, online computer programs and other entertainment, which may be less expensive or provide other advantages to consumers.
Our titles also compete with other forms of entertainment, such as social media, in addition to motion pictures, television, short-form video, and audio and video products featuring similar themes, online computer programs and other entertainment, which may be less expensive or provide other advantages to consumers.
While such legislation to date has been enjoined by industry and retail groups or been found unconstitutional, the adoption into law of such legislation in federal and/or in state jurisdictions in which we do significant business could severely limit the retail market for some of our games.
While such legislation to date has been enjoined by legal action of industry and retail groups or been found unconstitutional, the adoption into law of such legislation in federal and/or in state jurisdictions in which we do significant business could severely limit the retail market for some of our games.
As a global company, we are subject to a variety of regulations and laws in the U.S. and abroad, including regarding consumer protection (including the use of prepaid cards, online safety, and the protection of minors), subscriptions, advertising, electronic marketing, privacy (including verified parental consent and age assurance), biometrics, cybersecurity, data protection and data localization requirements, AI, online services, online gaming, anti-competition, freedom of speech, labor, real estate, taxation, escheatment, intellectual property ownership and infringement, tax, export and national security, tariffs, anti-corruption and telecommunications, all of which are continuously evolving and developing.
As a global company, we are subject to a variety of regulations and laws in the U.S. and abroad, including regarding consumer protection (including the use of prepaid cards, online safety, and the protection of minors), subscriptions, advertising, electronic marketing, privacy (including verified parental consent and age assurance), biometrics, cybersecurity, data protection and data localization requirements, AI, online services, online gaming, anti-competition, freedom of speech, labor, real estate, taxation, social media and content moderation, escheatment, intellectual property ownership and infringement, tax, export and national security, tariffs, anti-corruption and telecommunications, all of which are continuously evolving and developing.
All information technology systems and networks are potentially vulnerable to damage or interruption from a variety of sources, including but not limited to cyberattacks, computer viruses, malicious software, security breaches, energy blackouts, natural disasters, terrorism, war, and telecommunication failures. We securely store the source code for our interactive entertainment software products as it is created.
All information technology systems and networks are potentially vulnerable to damage or interruption from a variety of sources, including but not limited to cyberattacks, computer viruses, malicious software, security breaches, energy blackouts, natural disasters, terrorism, war, and telecommunication or other critical infrastructure failures. We securely store the source code for our interactive entertainment software products as it is created.
Failures to prevent or mitigate security breaches or cyber risks, or detect or respond adequately to a security breach or cyber risk, could result in a loss of anticipated revenue, interruptions to our products and services, our having to incur significant remediation and notification costs, a degradation of the user experience, causing consumers to lose confidence in our products and services, prompting regulatory inquiries and significant legal and financial costs.
Failures to prevent or mitigate security breaches or cyber risks, or detect or respond adequately to a security breach or cyber risk, could result in a loss of anticipated revenue, interruptions to our products and services, our having to incur significant remediation and notification costs, a degradation of the user experience, causing consumers to lose confidence in our products and services, and thereby harming our reputation, prompting regulatory inquiries and significant legal and financial costs.
We risk damage to our reputation if we fail to act responsibly in a number of areas, such as diversity and inclusion, environmental stewardship, supply chain management, climate change, workplace conduct, human rights and philanthropy.
We risk damage to our reputation if we fail to act responsibly in a number of areas, such as environmental stewardship, supply chain management, climate change, workplace conduct, human rights and philanthropy.
In either case, our products and services may be technologically inferior to those of our competitors, less appealing to consumers, or both. 10 The development and use of artificial intelligence (“AI”) into our products may present operational and reputational risks. The growth of AI technologies in our industry has influenced games production for developers and gaming experience for players.
In either case, our products and services may be technologically inferior to those of our competitors, less appealing to consumers, or both. The development and use of artificial intelligence (“AI”) into our products may present operational and reputational risks. The growth of AI technologies in our industry has influenced game production for developers and gaming experience for players.
These risks extend to the networks and e-commerce sites of console platform providers and other partners who sell or host our content online. The risk of such threats is heightened by events outside of our control, such as the extended period of remote work arrangements due to COVID-19, the Russia-Ukraine war and the Israel-Hamas war.
These risks extend to the networks and e-commerce sites of console platform providers and other partners who sell or host our content online. The risk of such threats is heightened by events outside of our control, such as the extended period of remote work arrangements, the Russia-Ukraine war and the Israel-Hamas war.
We are subject to a variety of laws in the U.S. and abroad that affect our business, including state and federal laws regarding consumer protection, electronic marketing, protection of minors, data protection and privacy, competition, taxation, 19 intellectual property, export, and national security, which are continuously evolving and developing.
We are subject to a variety of laws and executive orders in the U.S. and abroad that affect our business, including state and federal laws regarding consumer protection, electronic marketing, protection of minors, data protection and privacy, competition, taxation, intellectual property, export, and national security, which are continuously evolving and developing.
The use of this new and emerging technology, which is in its early stages of commercial use, presents social and ethical issues that may result in legal and reputational harm and liability.
The use of this new and emerging technology, which is in its early stages of wider-spread commercial use, presents social and ethical issues that may result in legal and reputational harm and liability.
We are subject to risks inherent in foreign trade, including increased credit risks, tariffs, and duties, fluctuations in foreign currency exchange rates, shipping delays, and international political, regulatory and economic developments, such as the Russia-Ukraine war and the Israel-Hamas war, all of which can have a significant influence on our operating results.
We are subject to risks inherent in foreign trade, including increased credit risks, tariffs, and duties, fluctuations in foreign currency exchange rates, especially in jurisdictions like Turkey; shipping delays, and international political, regulatory and economic developments, such as the Russia-Ukraine war and the Israel-Hamas war, all of which can have a significant influence on our operating results.
Also, beginning January 2024, Google began requiring publishers and developers using certain Google advertising products to serve ads in the U.K. or European Union (E.U.) to use a Google certified consent management platform. We are continuing to evaluate how these rules or changes may affect our business, operations and financial results.
Also, beginning January 2024, Google began requiring 11 publishers and developers using certain Google advertising products to serve ads in the U.K. or European Union ("E.U.") to use a Google certified consent management platform. We continue to evaluate how these rules or changes may affect our business, operations and financial results.
In February 2023, an Austrian court ruled that loot boxes in one of our competitor’s video games constitute illegal gambling due, principally, to the existence of a secondary market for certain of the game's virtual items.
In February 2023, an Austrian regional court ruled that loot boxes in one of our competitor’s video games constitute illegal gambling due, principally, to the existence of an unauthorized secondary market for certain of the game's virtual items.
Sales to our five largest customers during the fiscal year ended March 31, 2024 accounted for 79.8% of our net revenue, with Sony, Apple, Google, and Microsoft each accounting for more than 10.0%. Our sales are made primarily without long-term agreements or other commitments, and our customers may terminate their relationship with us at any time.
Sales to our five largest customers during the fiscal year ended March 31, 2025 accounted for 81.0% of our net revenue, with Apple, Sony, Google, and Microsoft each accounting for more than 10.0%. Our sales are made primarily without long-term agreements or other commitments, and our customers may terminate their relationship with us at any time.
In many foreign countries, particularly in those with developing economies, it may be common to engage in business practices that are prohibited by U.S. laws and regulations, such as the Foreign Corrupt Practices Act, and by local laws, such as laws prohibiting corrupt payments to government officials.
In many foreign countries, particularly in those with developing economies, it may be common to engage in business practices that are prohibited by U.S. and international laws and regulations, such as the Foreign Corrupt Practices Act, the U.K. 19 Bribery Act, and by local laws, such as laws prohibiting corrupt payments to government officials.
Any of the foregoing factors could harm our financial condition or prevent us from achieving improvements in our financial condition and operating performance that could have otherwise been achieved by us on a stand-alone basis. Our stockholders may not have the opportunity to review, vote on or evaluate future acquisitions or investments. We face risks from our international operations.
Any of the foregoing factors could harm our financial condition or prevent us from achieving improvements in our financial condition and operating performance that could have otherwise been achieved by us on a stand-alone basis. Our stockholders may not have the opportunity to review, vote on or evaluate future acquisitions or investments.
Laws and regulations may be inconsistent from jurisdiction to jurisdiction, which may increase the cost of compliance and doing business and expose us to possible litigation, penalties or fines, which in ascertain circumstances can be linked to a percentage of our global turnover.
Laws and regulations may be inconsistent, or even contradictory, from jurisdiction to jurisdiction, which may increase the cost of compliance and doing business and expose us to possible litigation, penalties or fines, which in certain circumstances can be linked to a percentage of our global turnover.
We may issue equity or equity-based securities in the future to facilitate acquisitions or strategic transactions, as we did in connection with our acquisition of Zynga and as we intend to do in connection with our pending acquisition of Gearbox, to adjust our ratio of debt to equity, to fund expansion of our operations or for other purposes.
We may issue equity or equity-based securities in the future to facilitate acquisitions or strategic transactions, as we did in connection with our acquisitions of Zynga and Gearbox, to adjust our ratio of debt to equity, to fund expansion of our operations or for other purposes.
If we fail to comply with our posted privacy policy or TOS, or if we fail to comply with existing privacy or data protection laws and regulations, it could result in proceedings or litigation against us by governmental authorities or others, which could result in fines or judgments against us, damage our reputation, affect our financial condition, and harm our business.
If we fail to comply with our posted privacy policy, TOS, or other consents received in our game experience, or if we fail to comply with existing privacy or data protection laws and regulations, it could result in proceedings or litigation against us by governmental authorities or others, which could result in fines or judgments against us, damage our reputation, affect our financial condition, and harm our business.
In addition to the market factors noted above, our ability to successfully develop games for mobile platforms and their ability to achieve commercial success will depend on our ability to: • effectively market our games to existing and new players; • achieve benefits from our player acquisition costs; • achieve viral organic growth and gain customer interest in our games through free or more efficient channels; • adapt to changing player preferences; • adapt to new technologies and feature sets for mobile and other devices; • expand and enhance games after their initial release; • attract, retain and motivate talented and experienced game designers, product managers and engineers; • partner with mobile platforms and obtain featuring opportunities; • continue to adapt game feature sets for an increasingly diverse set of mobile devices, including various operating systems and specifications, limited bandwidth and varying processing power and screen sizes; • minimize launch delays and cost overruns on the development of new games and features; • achieve and maintain successful customer engagement and effectively monetize our games; • maintain a quality social game experience and retain our players; • develop games that can build upon or become franchise games; • compete successfully against a large and growing number of existing market participants; • accurately forecast the timing and expense of our operations, including game and feature development, marketing and customer acquisition, customer adoption and success of bookings growth; • minimize and quickly resolve bugs or outages; and • acquire and successfully integrate high quality mobile game assets, personnel or companies.
If our games do not meet consumer expectations, or if they are not brought to market in a timely and effective manner, our revenue and financial performance will be negatively affected. 16 In addition to the market factors noted above, our ability to successfully develop games for mobile platforms and their ability to achieve commercial success will depend on our ability to: • effectively market our games to existing and new players; • achieve benefits from our player acquisition costs; • achieve viral organic growth and gain customer interest in our games through free or more efficient channels; • adapt to changing player preferences; • adapt to new technologies and feature sets for mobile and other devices; • expand and enhance games after their initial release; • attract, retain and motivate talented and experienced game designers, product managers and engineers; • partner with mobile platforms and obtain featuring opportunities; • continue to adapt game feature sets for an increasingly diverse set of mobile devices, including various operating systems and specifications, limited bandwidth and varying processing power and screen sizes; • minimize launch delays and cost overruns on the development of new games and features; • achieve and maintain successful customer engagement and effectively monetize our games; • maintain a quality social game experience and retain our players; • develop games that can build upon or become franchise games; • compete successfully against a large and growing number of existing market participants; • accurately forecast the timing and expense of our operations, including game and feature development, marketing and customer acquisition, customer adoption and success of bookings growth; • minimize and quickly resolve bugs or outages; and • acquire and successfully integrate high quality mobile game assets, personnel or companies.
We derive a significant portion of our revenue from the sale of products made for video game platforms manufactured by third parties, such as Sony's PlayStation consoles and Microsoft's Xbox consoles, which comprised 40.5% of our net revenue by product platform for the fiscal year ended March 31, 2024.
We derive a significant portion of our revenue from the sale of products made for video game platforms manufactured by third parties, such as Sony's PlayStation consoles and Microsoft's Xbox consoles, which comprised 37.3% of our net revenue by product platform for the fiscal year ended March 31, 2025.
Certain other countries have also established content rating systems as prerequisites for product sales in those countries. In addition, certain stores use other ratings systems, such as Apple’s use of its proprietary “App Rating System” and Google Play’s use of the International Age Rating Coalition (“IARC”) rating system.
Certain other countries have also established content rating systems as prerequisites for product sales in those countries. In addition, certain stores use other ratings systems, such as Apple’s use of its proprietary “App Rating System” and Google Play’s use of the IARC rating system.
In the fiscal year ended March 31, 2024, we derived 95.0% of our mobile revenue on Apple and Google platforms. We are subject to the standard policies and terms of service of third-party platforms, which govern the promotion, distribution, content and operation generally of games on the platform.
In the fiscal year ended March 31, 2025, we derived 92.9% of our mobile revenue on Apple and Google platforms. We are subject to the standard policies and terms of service of third-party platforms, which govern the promotion, distribution, content and operation generally of games on the platform.
In addition, public dialogue concerning interactive entertainment may have an adverse impact on our reputation and our customers' willingness to purchase our products. We submit our products for rating by the Entertainment Software Rating Board ("ESRB") in the United States and other voluntary or government ratings organizations in foreign countries.
In addition, public dialogue concerning interactive entertainment may have an adverse impact on our reputation and our customers' willingness to purchase our products. We submit our products for rating by the ESRB in the U.S. and other voluntary or government ratings organizations in foreign countries.
We also rely on the availability of an adequate supply of these video game consoles (which sometimes has been negatively affected by supply chain issues) and the continued support for these consoles by their manufacturers, including our ability to reach consumers via the online networks operated by these console manufacturers.
We also rely on the availability of an adequate supply of these video game consoles (which sometimes has been negatively affected by supply chain issues, and which could be affected by an increase in tariffs on component parts) and the continued support for these consoles by their manufacturers, including our ability to reach consumers via the online networks operated by these console manufacturers.
Events such as limited hardware failure, any broad-based catastrophic server malfunction, a significant intrusion by hackers that circumvents security measures, or a failure of disaster recovery services would likely interrupt the functionality of our games with online services and could result in a loss of sales for games and related services.
Events such as limited hardware failure, any broad-based catastrophic server malfunction, extended power outages or failure for any reason of telecommunications or other critical infrastructure, a significant intrusion by hackers that circumvents security measures, or a failure of disaster recovery services would likely interrupt the functionality of our games with online services and could result in a loss of sales for games and related services.
In addition, in Australia, the Guidelines for the Classification of Computer Games 2023 which are set to go into effect late 2024 would limit games containing “simulated gambling” features to adults aged 18 and over, and require games that do not contain simulated gambling, but which contain loot boxes, to be rated M (Mature), meaning they would only be recommended as being suitable for players aged 15 and over.
In addition, in Australia, the Guidelines for the Classification of Computer Games 2023, which went into effect in September 2024 limit games containing "simulated gambling" features to adults aged 18 and over, and require games which do not contain simulated gambling, but which contain loot boxes, to be rated M (Mature), meaning they would only be recommended as being suitable for players aged 15 and over.
The existence of inflation in the economy has the potential to result in higher interest rates and capital costs, supply shortages, increased costs of labor and other similar effects. Further, world events, such as the Russia-Ukraine war and the Israel-Hamas war , could affect inflationary trends.
The existence of inflation in the economy has the potential to result in higher interest rates and capital costs, supply shortages, increased costs of labor and other similar effects. Further, events, such as the Russia-Ukraine war and the Israel-Hamas war, and the adverse impacts of implemented tariffs and trade wars, could affect inflationary trends.
As such, we are increasingly exposed to the risks of the free‑to‑play business model. For example, we may invest in the development of new free‑to‑play interactive entertainment products that do not achieve significant commercial success, in which case our revenues from those products likely will be lower than anticipated and we may not recover our development costs.
For example, we may invest in the development of new free‑to‑play interactive entertainment products that do not achieve significant commercial success, in which case our revenues from those products likely will be lower than anticipated and we may not recover our development costs.
Children's Online Privacy Protection Act also regulates the collection, use, and disclosure of personal information from children under 13 years of age, and age-based privacy laws can apply to how we collect and use personal information or provide certain game features to players up to 18 years of age.
Children's Online Privacy Protection Act regulates the collection, use, and disclosure of personal information from children under 13 years of age, and age-based privacy laws can apply to how we collect and use personal information or provide certain game features to players up to 18 years of age, including how or whether we are permitted to use their information for targeted advertising.
Adverse economic conditions, such as a prolonged U.S. or international general economic downturn, including periods of increased inflation, unemployment levels, tax rates, interest rates, energy prices, or declining consumer confidence, could reduce consumer spending.
Adverse economic conditions, such as a prolonged U.S. or international general economic downturn, including periods of increased inflation, stagflation, unemployment levels, tax rates, interest rates, energy prices, or declining consumer confidence, or the adverse impacts of implemented or threatened tariffs or trade wars could reduce consumer spending.
In addition, the American Rescue Plan Act of 2021 (“ARPA”) provides for numerous tax and other stimulus measures, one of which will expand the limitation of compensation deductions for certain covered employees of publicly held corporations to also include the next five highly compensated employees. This limitation will be effective for us beginning April 1, 2027.
The American Rescue Plan Act of 2021 (“ARPA”) provides for numerous tax and other stimulus measures, one of which will expand the limitation of compensation deductions for certain covered employees of publicly held corporations to also include the next five highly compensated employees.
Grand Theft Auto products contributed 14.7% of our net revenue for the fiscal year ended March 31, 2024, and the five best-selling franchises (including Grand Theft Auto ), which may change year over year, in the aggregate accounted for 56.5% of our net revenue for the fiscal year ended March 31, 2024.
Grand Theft Auto products contributed 12.6% of our net revenue for the fiscal year ended March 31, 2025, and the five best-selling franchises (including Grand Theft Auto ), which may change year over year, in the aggregate accounted for 53.1% of our net revenue for the fiscal year ended March 31, 2025.
We also derive significant revenues from distribution on third‑party mobile and web platforms, such as the Apple App Store, the Google Play Store, and Facebook, which are also our direct competitors and, in some cases, the exclusive means through which our content reaches gamers on those platforms, and most of the virtual currency we sell is purchased using these platform providers’ payment processing systems.
Increased competition for digital “shelf space” has put channel partners in more favorable bargaining positions in relation to such terms of distribution. 12 We also derive significant revenues from distribution on third‑party mobile and web platforms, such as the Apple App Store, the Google Play Store, and Facebook, which are also our direct competitors and, in some cases, the exclusive means through which our content reaches gamers on those platforms, and most of the virtual currency we sell is purchased using these platform providers’ payment processing systems.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe have a documented incident monitoring, escalation and reporting process and procedure that we believe to be effective in detecting and analyzing cyber incidents as they occur to determine appropriate response action and reporting, including the materiality of any such incidents to our financial condition and operations.
Biggest changeWe also work with third-party cybersecurity and data privacy professionals as part of the design and implementation of our information security program, including our auditors, independent assessors (for example, for penetration testing) of our cybersecurity program, internal and external legal counsel, and other consultants. 34 We have a documented incident monitoring, escalation and reporting process and procedure that we believe to be effective in detecting and analyzing cyber incidents as they occur to determine appropriate response action and reporting, including the materiality of any such incidents to our financial condition and operations.
These qualifications include collective decades of professional experience in the field, in both private enterprise and government, and relevant training and certifications, such as Certified Information Systems Security Professional (CISSP) certification, ISO 27001 certification, and other technical cybersecurity certifications from ISC2, the SANs Institute and OffSec as well as recent participation in IT and cybersecurity programs organized by leading educational institutions with expertise in the field.
These qualifications include collective decades of professional experience in the field, in both private enterprise and government, and relevant training and certifications, such as Certified Information Systems Security Professional certification, ISO 27001 certification, and other technical cybersecurity certifications from ISC2, the SANs Institute and OffSec as well as recent participation in IT and cybersecurity programs organized by leading educational institutions with expertise in the field.
This process includes: a. continual monitoring of our systems and logs by both dedicated cybersecurity internal and outsourced staff; b. immediate escalation to and review by our CISO of certain signals, including evidence of external threat actors, ransomware attacks, data exfiltration, identity compromise or unusual requests from management or certain departments; c. if deemed appropriate, reporting by our CISO to the Company’s Management and its Disclosure Committee, comprised of multi-disciplinary senior leaders across the organization, including representatives of our accounting, human resources, finance, information technology and legal functions, and consultation with internal and external legal counsel, for further review and determination of the scope and materiality of the incident or incidents, including whether public disclosure is appropriate or required; and d. informing the Audit Committee of our Board of Directors (the “Board”) of significant or material cybersecurity incidents, as appropriate.
This process includes: a. continual monitoring of our systems and logs by both dedicated cybersecurity internal and outsourced staff; b. immediate escalation to and review by our CISO of certain signals, including evidence of external threat actors, ransomware attacks, data exfiltration, identity compromise or unusual requests from management or certain departments; c. if deemed appropriate, reporting by our CISO to the Company’s Management and its Disclosure Committee, comprised of multi-disciplinary senior leaders across the organization, including representatives of our accounting, human resources, finance, information technology and legal functions, and consultation with internal and external legal counsel, for further review and determination of the scope and materiality of the incident or incidents, including whether public disclosure is appropriate or required; and d. informing the Audit Committee of our Board of significant or material cybersecurity incidents, as appropriate.
Our internal audit team is responsible for testing and auditing our information-technology internal controls. In addition, leaders from our communications, finance, legal and risk teams participate in incident response training, including tabletop exercises, designed to enhance our ability to respond to cybersecurity incidents quickly, efficiently and with the appropriate degree of urgency.
Our internal audit team is responsible for testing and auditing our information-technology internal controls. In addition, leaders from our communications, finance, legal 35 and risk teams participate in incident response training, including tabletop exercises, designed to enhance our ability to respond to cybersecurity incidents quickly, efficiently and with the appropriate degree of urgency.
In connection with this activity , we have incurred certain immaterial incremental one-time costs related to 34 consultants, experts and data recovery efforts and we generally expect to incur additional costs related to cybersecurity protections in the future.
In connection with this activity, we have incurred certain immaterial incremental one-time costs related to consultants, experts and data recovery efforts and we generally expect to incur additional costs related to cybersecurity protections in the future.
As part of our program: a. we regularly review and update at least annually our standard policies and procedures related to information technology and analyze those policies against the standards and controls that we believe are most relevant to our Company set by organizations such as the National Institute of Standards and Technology (NIST) cybersecurity framework and the International Organization for Standardization (ISO); 33 b. we maintain a dedicated cybersecurity team under the direction of our Chief Technology Officer (CTO) and supported by our Chief Information Security Officer (CISO), each of whom has expertise related to data and network security, data governance and risk management; c. we regularly test our internal IT controls; d. we regularly conduct internal vulnerability assessments as well as third-party penetration tests; e. we maintain, and we require our third-party service providers to maintain, security controls designed to ensure the confidentiality, integrity, and availability of our information systems and the confidential and sensitive information we maintain and process, or which is processed on our behalf; f. we conduct pre-engagement and recurring reviews of the security controls and security-compliance posture of applicable third-party service providers; g. all employees are required to complete periodic trainings that cover security and privacy best practices and company policies; h. we have prepared and regularly review and test our business continuity, disaster recovery and other back-up plans, including as they relate to cybersecurity incidents; and i. we perform periodic simulations of attack scenarios by an internal “Red Team” to test the efficacy of both security controls and our tactical incident response procedures.
As part of our program: a. we regularly review and update at least annually our standard policies and procedures related to information technology and analyze those policies against the standards and controls that we believe are most relevant to our Company set by organizations such as the National Institute of Standards and Technology cybersecurity framework and the International Organization for Standardization ("ISO"); b. we maintain a dedicated cybersecurity team under the direction of our Chief Technology Officer ("CTO") and supported by our Chief Information Security Officer ("CISO"), each of whom has expertise related to data and network security, data governance and risk management; c. we regularly test our internal IT controls; d. we regularly conduct internal vulnerability assessments as well as third-party penetration tests; e. we maintain, and we require our third-party service providers to maintain, security controls designed to ensure the confidentiality, integrity, and availability of our information systems and the confidential and sensitive information we maintain and process, or which is processed on our behalf; f. we conduct pre-engagement and targeted recurring reviews of the security controls and security-compliance posture of applicable third-party service providers; g. all employees are required to complete periodic trainings that cover security and privacy best practices and company policies; h. we regularly review our business continuity and other back-up plans, including as they relate to cybersecurity incidents; and i. we perform periodic simulations of attack scenarios by an internal “Red Team” to test the efficacy of both security controls and our tactical incident response procedures.
At least semi-annually (with respect to the Audit Committee) and annually (with respect to the Board), our CTO and CISO report to the Audit Committee or the Board addressing a broad range of topics, including significant cybersecurity incidents that have occurred, if any, since the last update, the status of projects and initiatives to update our cybersecurity policies and practices, and ongoing efforts to prevent, detect, and respond to internal and external critical threats.
At least quarterly (with respect to the Audit Committee) and annually (with respect to the Board), our CTO and CISO report to the Audit Committee or the Board, respectively, addressing a broad range of topics, including significant cybersecurity incidents that have occurred, if any, since the last update, the status of projects and initiatives to update our cybersecurity policies and practices, and ongoing efforts to prevent, detect, and respond to internal and external critical threats.
Removed
We also work with third-party cybersecurity and data privacy professionals as part of the design and implementation of our information security program, including our auditors, independent assessors (for example, for penetration testing) of our cybersecurity program, internal and external legal counsel, and other consultants.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeIn addition, Zynga leases approximately 185,000 square feet for its former corporate headquarters located in San Francisco, California, which is now closed. The lease expires in June 2031.
Biggest changeZynga corporate office occupy approximately 62,000 square feet of leased office space in San Mateo, California. The lease expires in June 2032. In addition, Zynga leases approximately 185,000 square feet for its former corporate headquarters located in San Francisco, California, which is now closed. The lease expires in June 2031.
Item 2. Properties Our principal executive offices are located at 110 West 44th Street (also known as 1133 Avenue of the Americas), New York, New York, in approximately 117,100 square feet of space under a lease expiring in December 2037.
Item 2. Properties Our principal executive offices are located at 110 West 44th Street (also known as 1133 Avenue of the Americas), New York, New York, in approximately 102,000 square feet of space under a lease expiring in December 2037.
In addition, our other subsidiaries lease office space in Sydney and Pyrmont, Australia; Halifax, Oakville, Montreal, Parksville, Toronto, and Vancouver, Canada; Chengdu, Beijing, Hong Kong, and Shanghai, China; Prague, Czech Republic; Helsinki, Finland; Cesson-Sévigné and Paris, France; Munich and Berlin, Germany; Budapest, Hungary; Bangalore, India; Dublin, Ireland; Tel Aviv, Israel; Tokyo, Japan; Amsterdam and The Hague, Netherlands; Belgrade, Serbia; Singapore; Seoul, South Korea; Barcelona, Madrid, and Valencia, Spain; Luzerne, Switzerland; Taipei, Taiwan; Istanbul, Turkey; Birmingham, Brighton, Dundee, London, Lincoln, and Leeds, United Kingdom; and, in the United States: Agoura Hills, Carlsbad, Foothill 35 Ranch, Irvine, Los Angeles, Petaluma, Moorpark, San Francisco, San Jose, San Mateo, and San Rafael, California; Chicago, Illinois; Sparks, Maryland; Andover and Westwood, Massachusetts; Las Vegas, Nevada; Bethpage and New York, New York; Eugene, Oregon; Austin, Texas; and Kirkland and Seattle, Washington.
In addition, our other subsidiaries lease office space in Sydney and Pyrmont, Australia; Halifax, Oakville, Montreal, Parksville, Quebec, Toronto, and Vancouver, Canada; Chengdu, Hong Kong, and Shanghai, China; Prague, Czech Republic; Helsinki, Finland; Cesson-Sévigné and Paris, France; Munich and Berlin, Germany; Budapest, Hungary; Bangalore, India; Dublin, Ireland; Tel Aviv, Israel; Tokyo, Japan; Belgrade, Serbia; Singapore; Seoul, South Korea; Barcelona, Madrid, and Valencia, Spain; Luzerne, Switzerland; Taipei, Taiwan; Istanbul, Turkey; Birmingham, Brighton, Dundee, London, Lincoln, and Leeds, U.K.; and, in the U.S.: Agoura Hills, Carlsbad, Foothill Ranch, Irvine, Los Angeles, Petaluma, Moorpark, San Francisco, San Mateo, and San Rafael, California; Chicago, Illinois; Sparks, Maryland; Andover and Westwood, Massachusetts; Las Vegas, Nevada; Bethpage and New York, New York; Eugene, Oregon; Austin and Frisco, Texas; and Kirkland and Seattle, Washington.
Take-Two Interactive Software Europe Ltd, our wholly-owned subsidiary, leases approximately 39,500 square feet of office space in London, United Kingdom, which expires in December 2034 and owns two office buildings in Edinburgh, United Kingdom. 2K corporate offices and two development studios occupy approximately 123,000 square feet of leased office space in Novato, California.
Take-Two Interactive Software Europe Ltd, our wholly-owned subsidiary, leases approximately 39,500 square feet of office space in London, U.K., which expires in December 2034 and owns two office buildings in Edinburgh, U.K. 2K corporate offices and two development studios occupy approximately 90,000 square feet of leased office space in Novato, California, under a lease expiring in October 2033.
Removed
The lease expires in October 2033 with respect to approximately 59,000 square feet and July 2025 with respect to approximately 64,000 square feet. Zynga corporate office occupy approximately 62,000 square feet of leased office space in San Mateo, California. The lease expires in June 2032.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

6 edited+6 added−2 removed1 unchanged
Biggest changeSecurities Authorized for Issuance under Equity Compensation Plans The table setting forth this information is included in Part III—Item 12, Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters . Issuer Purchases of Equity Securities Share Repurchase Program —Our Board of Directors has authorized the repurchase of up to 21.7 shares of our common stock.
Biggest changeThe payment of dividends in the future is within the discretion of our Board and will depend upon future earnings, capital requirements and other relevant factors. Securities Authorized for Issuance under Equity Compensation Plans The table setting forth this information is included in Part III—Item 12, Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters .
We currently anticipate that all future earnings will be retained to finance the growth of our business and we do not expect to declare or pay any cash dividends in the foreseeable future.
We currently anticipate that all future earnings will be retained to finance the growth of our business and pay down our outstanding debt. We do not expect to declare or pay any cash dividends in the foreseeable future.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information and Holders Our common stock trades on the NASDAQ Global Select Market under the symbol "TTWO." The number of record holders of our common stock was 324 as of May 6, 2024. Dividend Policy We have never declared or paid cash dividends.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information and Holders Our common stock trades on the NASDAQ Global Select Market under the symbol "TTWO." The number of record holders of our common stock was 313 as of May 5, 2025. Dividend Policy We have never declared or paid cash dividends.
Summary Table —The table below details the share repurchases that were made by us during the three months ended March 31, 2024: Period Shares purchased Average price per share Total number of shares purchased as part of publicly announced plans or programs Maximum number of shares that may yet be purchased under the repurchase program January 1 - 31, 2024 — — — 10.0 February 1 - 28, 2024 — — — 10.0 March 1 - 31, 2024 — — — 10.0 Item 6. [Reserved]
All of the repurchased shares are classified as Treasury stock in our Consolidated Balance Sheets. 38 Summary Table —The table below details the share repurchases that were made by us during the three months ended March 31, 2025: Period Shares purchased Average price per share Total number of shares purchased as part of publicly announced plans or programs Maximum number of shares that may yet be purchased under the repurchase program January 1 - 31, 2025 — — — 10.0 February 1 - 28, 2025 — — — 10.0 March 1 - 31, 2025 — — — 10.0 Item 6. [Reserved]
As of March 31, 2024, we had repurchased a total of 11.7 shares of our common stock under the program, and 10.0 shares of our common stock remained available for repurchase under the share repurchase program. All of the repurchased shares are classified as Treasury stock in our Consolidated Balance Sheets.
As of March 31, 2025, we had repurchased a total of 11.7 shares of our common stock under the program, and 10.0 shares of our common stock remained available for repurchase under the share repurchase program.
The program does not require us to repurchase shares and may be suspended or discontinued at any time for any reason.
The program does not require us to repurchase shares and may be suspended or discontinued at any time for any reason. During the fiscal years ended March 31, 2025, 2024, and 2023, we did not repurchase shares of our common stock.
Removed
The payment of dividends in the future is within the discretion of our Board of Directors and will depend upon future earnings, capital requirements and other relevant factors. Our Credit Agreement requires us to meet certain incurrence tests prior to paying a dividend. See "Liquidity and Capital Resources" under Item 7 for additional information on our Credit Agreement.
Added
Stock Performance Graph The performance graph shall not be deemed "filed" for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of the Company under the Exchange Act or the Securities Act of 1933, as amended.
Removed
During the fiscal years ended March 31, 2024, 2023, and 2022, we repurchased 0.0, 0.0, and 1.3 shares of our common stock in the open market, respectively, for $0.0, $0.0, and $200.0, respectively, including commissions, as part of the program.
Added
The following line graph compares, from March 31, 2020 through March 31, 2025, the cumulative total shareholder return ("TSR") on our common stock with the cumulative TSR on (1) the stocks comprising the NASDAQ Composite Index, (2) the stocks comprising the S&P 500 Index, and (3) the RDG Technology Composite Index.
Added
The comparison assumes $100 was invested on March 31, 2020 in our common stock and in each of the following indices and assumes reinvestment of all cash dividends, if any, paid on such securities.
Added
We have not paid any cash dividends and, therefore, our cumulative TSR calculation is based solely upon stock price appreciation and not upon reinvestment of cash dividends.
Added
Historical stock price is not necessarily indicative of future stock price performance. 37 Comparison of 5 Year Cumulative Total Return* Among Take-Two Interactive Software, Inc., the NASDAQ Composite Index, the S&P 500 Index, and the RDG Technology Composite Index March 2025 * The graph and chart assume that $100 was invested on March 31, 2020 in the applicable stock or index and that all dividends were reinvested.
Added
March 31, 2020 2021 2022 2023 2024 2025 Take-Two Interactive Software, Inc. $ 100.00 $ 148.98 $ 129.62 $ 100.58 $ 125.19 $ 174.73 NASDAQ Composite 100.00 173.40 187.36 162.49 219.49 233.47 S&P 500 100.00 156.35 180.81 166.84 216.69 234.58 RDG Technology Composite 100.00 170.46 183.07 165.71 205.89 220.69 Issuer Purchases of Equity Securities Share Repurchase Program —Our Board has authorized the repurchase of up to 21.7 shares of our common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe following table sets forth, for the periods indicated, our statements of operations, net revenue by geographic region, net revenue by platform, net revenue by distribution channel, and net revenue by content type: Fiscal Year Ended March 31, 2024 2023 2022 Total net revenue $ 5,349.6 100.0 % $ 5,349.9 100.0 % $ 3,504.8 100.0 % Cost of revenue 3,107.8 58.1 % 3,064.6 57.3 % 1,535.4 43.8 % Gross profit 2,241.8 41.9 % 2,285.3 42.7 % 1,969.4 56.2 % Selling and marketing 1,550.2 29.0 % 1,586.5 29.7 % 516.4 14.7 % Research and development 948.2 17.7 % 887.6 16.6 % 406.6 11.6 % General and administrative 716.1 13.4 % 839.5 15.7 % 510.9 14.6 % Depreciation and amortization 171.2 3.2 % 122.3 2.3 % 61.1 1.7 % Goodwill impairment 2,342.1 43.8 % — — % — — % Business reorganization 104.6 1.9 % 14.6 0.3 % 0.8 — % Total operating expenses 5,832.4 109.0 % 3,450.5 64.5 % 1,495.8 42.7 % (Loss) income from operations (3,590.6) (67.1) % (1,165.2) (21.8) % 473.6 13.5 % Interest and other, net (103.6) (1.9) % (141.9) (2.7) % (14.2) (0.4) % (Loss) gain on fair value adjustments, net (8.6) (0.2) % (31.0) (0.6) % 6.0 0.2 % (Loss) income before income taxes (3,702.8) (69.2) % (1,338.1) (25.0) % 465.4 13.3 % Provision for (benefit from) income taxes 41.4 0.8 % (213.4) (4.0) % 47.4 1.4 % Net (loss) income $ (3,744.2) (70.0) % $ (1,124.7) (21.0) % $ 418.0 11.9 % Fiscal Year Ended March 31, 2024 2023 2022 Net revenue by platform: Mobile $ 2,748.0 51.4 % $ 2,538.6 47.5 % $ 403.4 11.5 % Console 2,167.3 40.5 % 2,303.8 43.0 % 2,528.9 72.2 % PC and other 434.3 8.1 % 507.5 9.5 % 572.5 16.3 % Net revenue by distribution channel: Digital online $ 5,112.2 95.6 % $ 5,085.7 95.1 % $ 3,149.0 89.8 % Physical retail and other 237.4 4.4 % 264.2 4.9 % 355.8 10.2 % Net revenue by content: Recurrent consumer spending $ 4,213.5 78.8 % $ 4,180.4 78.1 % $ 2,271.2 64.8 % Full game and other 1,136.1 21.2 % 1,169.5 21.9 % 1,233.6 35.2 % Fiscal Years ended March 31, 2024 and 2023 2024 % of net revenue 2023 % of net revenue Increase/(decrease) % Increase/(decrease) Total net revenue $ 5,349.6 100.0 % $ 5,349.9 100.0 % $ (0.3) — % Game intangibles 1,301.1 24.3 % 1,169.7 21.9 % 131.4 11.2 % Product costs 756.6 14.1 % 714.0 13.3 % 42.6 6.0 % Internal royalties 397.6 7.4 % 438.9 8.2 % (41.3) (9.4) % Software development costs and royalties (1) 346.7 6.5 % 435.1 8.1 % (88.4) (20.3) % Licenses 305.8 5.8 % 306.9 5.7 % (1.1) (0.4) % Cost of revenue 3,107.8 58.1 % 3,064.6 57.3 % 43.2 1.4 % Gross profit $ 2,241.8 41.9 % $ 2,285.3 42.7 % $ (43.5) (1.9) % (1) Includes $24.4 and $(9.5) of stock-based compensation expense in fiscal year 2024 and 2023, respectively. 41 For the fiscal year ended March 31, 2024, net revenue decreased by $0.3, as compared to the prior year.
Biggest changeFor the comparison of fiscal year 2024 to fiscal year 2023, refer to Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended March 31, 2024. 41 The following table sets forth, for the periods indicated, our statements of operations, net revenue by content type, net revenue by platform, and net revenue by distribution channel: Fiscal Year Ended March 31, 2025 2024 2023 Total net revenue $ 5,633.6 100.0 % $ 5,349.6 100.0 % $ 5,349.9 100.0 % Cost of revenue 2,571.4 45.7 % 3,107.8 58.1 % 3,064.6 57.3 % Gross profit 3,062.2 54.3 % 2,241.8 41.9 % 2,285.3 42.7 % Selling and marketing 1,683.7 29.9 % 1,550.2 29.0 % 1,586.5 29.7 % Research and development 1,005.2 17.8 % 948.2 17.7 % 887.6 16.6 % General and administrative 883.3 15.7 % 716.1 13.4 % 839.5 15.7 % Depreciation and amortization 229.4 4.1 % 171.2 3.2 % 122.3 2.3 % Goodwill impairment 3,545.2 62.9 % 2,342.1 43.8 % — — % Business reorganization 106.5 1.9 % 104.6 1.9 % 14.6 0.3 % Total operating expenses 7,453.3 132.3 % 5,832.4 109.0 % 3,450.5 64.5 % Loss from operations (4,391.1) (78.0) % (3,590.6) (67.1) % (1,165.2) (21.8) % Interest and other, net (93.3) (1.7) % (103.6) (1.9) % (141.9) (2.7) % Loss on fair value adjustments, net (6.9) (0.1) % (8.6) (0.2) % (31.0) (0.6) % Loss before income taxes (4,491.3) (79.8) % (3,702.8) (69.2) % (1,338.1) (25.0) % (Benefit from) provision for income taxes (12.4) (0.2) % 41.4 0.8 % (213.4) (4.0) % Net loss $ (4,478.9) (80.0) % $ (3,744.2) (70.0) % $ (1,124.7) (21.0) % Fiscal Year Ended March 31, 2025 2024 2023 Net revenue by content: Recurrent consumer spending $ 4,474.6 79.4 % $ 4,213.5 78.8 % $ 4,180.4 78.1 % Full game and other 1,159.0 20.6 % 1,136.1 21.2 % 1,169.5 21.9 % Net revenue by platform: Mobile $ 2,942.0 52.2 % $ 2,748.0 51.4 % $ 2,538.6 47.5 % Console 2,099.1 37.3 % 2,167.3 40.5 % 2,303.8 43.0 % PC and other 592.5 10.5 % 434.3 8.1 % 507.5 9.5 % Net revenue by distribution channel: Digital online $ 5,431.8 96.4 % $ 5,112.2 95.6 % $ 5,085.7 95.1 % Physical retail and other 201.8 3.6 % 237.4 4.4 % 264.2 4.9 % Fiscal Years ended March 31, 2025 and 2024 2025 % of net revenue 2024 % of net revenue Increase/(decrease) % Increase/(decrease) Total net revenue $ 5,633.6 100.0 % $ 5,349.6 100.0 % $ 284.0 5.3 % Product costs 821.1 14.6 % 756.6 14.1 % 64.5 8.5 % Game intangibles 811.0 14.4 % 1,301.1 24.3 % (490.1) (37.7) % Internal royalties 405.4 7.2 % 397.6 7.4 % 7.8 2.0 % Licenses 365.8 6.5 % 305.8 5.8 % 60.0 19.6 % Software development costs and royalties (1) 168.1 3.0 % 346.7 6.5 % (178.6) (51.5) % Cost of revenue 2,571.4 45.7 % 3,107.8 58.1 % (536.4) (17.3) % Gross profit $ 3,062.2 54.3 % $ 2,241.8 41.9 % $ 820.4 36.6 % (1) Includes $9.4 and $24.4 of stock-based compensation expense in fiscal year 2025 and 2024, respectively.
When compared to the statutory rate of 21%, the effective tax rate of (1.1)% for the fiscal year ended March 31, 2024 was due primarily to an expense of $474.7 from nondeductible goodwill impairments, $337.2 from an increase in the U.S. valuation allowance expense, $41.6 from an increase in the foreign valuation allowance expense, $39.0 from our geographic mix and foreign earnings, and $29.2 from a decrease in the net deferred tax asset relating to the Swiss cantonal basis step-up (as noted below) partially offset by a $63.3 benefit from tax credits anticipated to be utilized and $32.7 benefit from changes in reserves due to statute lapses.
When compared to the statutory rate of 21%, the effective tax rate of (1.1)% for the fiscal year ended March 31, 2024 was primarily due to an expense of $474.7 from nondeductible goodwill impairments, $337.2 from an increase in the U.S. valuation allowance expense, $41.6 from an increase in the foreign valuation allowance expense, $39.0 from our geographic mix and foreign earnings, and $29.2 from a decrease in the net deferred tax asset relating to the Swiss cantonal basis step-up (as noted below) partially offset by a $63.3 benefit from tax credits anticipated to be utilized and $32.7 benefit from changes in reserves due to statute lapses.
For the fiscal year ended March 31, 2024, we recorded a net tax expense of $29.2 due to an increase in the valuation of allowance of $81.3 offset by an increase in the deferred tax asset of $52.1 relating to the Swiss cantonal basis step-up, as it is more-likely-than-not that such deferred tax assets would not be realized.
For the fiscal year ended March 31, 45 2024, we recorded a net tax expense of $29.2 due to an increase in the valuation of allowance of $81.3 offset by an increase in the deferred tax asset of $52.1 relating to the Swiss cantonal basis step-up, as it is more-likely-than-not that such deferred tax assets would not be realized.
Online Content and Digital Distribution. We provide a variety of online delivered products, including direct digital downloads of our titles, and access to additional offerings through virtual currency, add-on content, and in-game purchases, which drive ongoing engagement and incremental revenue from recurrent consumer spending on our titles.
Online Content and Digital Distribution. We provide a variety of online delivered products, including direct digital downloads of our titles, and access to additional offerings through virtual currency, add-on content, in-game purchases, and in-game advertising, which drive ongoing engagement and incremental revenue from recurrent consumer spending on our titles.
The inclusion of such features on new consoles could mitigate 38 the risk of such a decline. However, we cannot be certain how backwards compatibility will affect demand for our products. Further, events beyond our control may impact the availability of these new consoles, which may also affect demand.
The inclusion of such features on new consoles could mitigate the risk of such a decline. However, we cannot be certain how backwards compatibility will affect demand for our products. Further, events beyond our control may impact the availability of these new consoles, which may also affect demand.
In addition, we expect to have the ability to generate sufficient cash domestically to support ongoing operations for the foreseeable future. Our Board of Directors has authorized the repurchase of up to 21.7 shares of our common stock.
In addition, we expect to have the ability to generate sufficient cash domestically to support ongoing operations for the foreseeable future. Our Board has authorized the repurchase of up to 21.7 shares of our common stock.
Off-Balance Sheet Arrangements As of March 31, 2024 and 2023, we did not have any material relationships with unconsolidated entities or financial parties, such as entities often referred to as structured finance or variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.
Off-Balance Sheet Arrangements As of March 31, 2025 and 2024, we did not have any material relationships with unconsolidated entities or financial parties, such as entities often referred to as structured finance or variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.
Effective for tax years starting after December 31, 2026 (April 1, 2027 for the Company), ARPA expands the limitation to cover the next five most highly compensated employees. ARPA did not have a material impact on our Consolidated Financial Statements for the fiscal year ended March 31, 2024.
Effective for tax years starting after December 31, 2026 (April 1, 2027 for the Company), ARPA expands the limitation to cover the next five most highly compensated employees. ARPA did not have a material impact on our Consolidated Financial Statements for the fiscal year ended March 31, 2025.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Overview Our Business We are a leading developer, publisher, and marketer of interactive entertainment for consumers around the globe. We develop, operate, and publish products principally through Rockstar Games, 2K, Private Division, and Zynga.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Overview Our Business We are a leading developer, publisher, and marketer of interactive entertainment for consumers around the globe. We develop, operate, and publish products principally through Rockstar Games, 2K, and Zynga.
The effective tax rate in the current year was lower compared to the prior year primarily due to increased expense from nondeductible goodwill impairments, increased expense related to an increase in our valuation allowance, decreased benefits from tax credits, and the impact of geographic mix and foreign earnings.
The effective tax rate in the current year was higher compared to the prior year primarily due to increased expense from nondeductible goodwill impairments, decreased benefits from tax credits, decreased expense related to an increase in our valuation allowance, and the impact of geographic mix and foreign earnings.
When new hardware platforms are introduced, demand for interactive entertainment used on older platforms typically declines, which may negatively affect our business during the market transition to the new consoles. The latest Sony and Microsoft consoles provide "backwards compatibility" (i.e., the ability to play games for the previous generation of consoles).
When new hardware platforms are introduced, demand for interactive entertainment developed for older platforms typically declines, which may negatively affect our business during the market transition to the new consoles. The latest Sony and Microsoft consoles provide "backwards compatibility" (i.e., the ability to play games for the previous generation of consoles).
We are no longer subject to audit for U.S. federal income tax returns for periods prior to our fiscal year ended March 31, 2021 and state income tax returns for periods prior to the fiscal year ended March 31, 2020.
We are no longer subject to audit for U.S. federal income tax returns for periods prior to our fiscal year ended March 31, 2022 and state income tax returns for periods prior to the fiscal year ended March 31, 2020.
As of March 31, 2024, we had repurchased a total of 11.7 shares of our common stock under the program, and 10.0 shares of our common stock remained available for repurchase under the share repurchase program.
As of March 31, 2025, we had repurchased a total of 11.7 shares of our common stock under the program, and 10.0 shares of our common stock remained available for repurchase under the share repurchase program.
As such, we are not exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in such relationships. International Operations Net revenue earned outside of the United States is principally generated by our operations in Europe, Asia, Australia, Canada and Latin America.
As such, we are not exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in such relationships. International Operations Net revenue earned outside of the U.S. is principally generated by our operations in Europe, Asia, Australia, Canada and Latin America.
We did not have any additional customers that exceeded 10% of our gross accounts receivable as of March 31, 2024, and 2023.
We did not have any additional customers that exceeded 10% of our gross accounts receivable as of March 31, 2025, and 2024.
It is possible that the CAMT could result in an additional tax liability over the regular federal corporate tax liability in a particular year based on differences between book and taxable income. We estimate no tax liability relating to the CAMT for the current fiscal year.
It is possible that the CAMT could result in an additional tax liability over the regular federal corporate tax liability in a particular year based on differences between book and taxable income. We do not estimate any tax liability relating to CAMT for the current fiscal year.
Economic Environment and Retailer Performance. We continue to monitor various macroeconomic and geopolitical factors that may affect our business in several areas, including consumer demand, inflation, pricing pressure on our products, credit quality of our receivables, and foreign currency exchange rates.
Economic Environment and Retailer Performance. We continue to monitor various macroeconomic and geopolitical factors, such as global tariff policy, that may affect our business in several areas, including consumer demand, inflation, pricing pressure on our products, credit quality of our receivables, and foreign currency exchange rates.
Our financial results are affected by the timing of our product releases and the commercial success of our titles. Generally, a significant portion of our revenue has been derived from a few popular franchises, particularly around new releases within those franchises, some of which have annual or biennial releases.
Trends and Factors Affecting our Business Product Release Schedule. Our financial results are affected by the timing of our product releases and the commercial success of our titles. Generally, a significant portion of our revenue has been derived from a few popular franchises, particularly around new releases within those franchises, some of which have annual or biennial releases.
It is possible that settlement of audits or the expiration of the statute of limitations could have an impact on our effective tax rate in future periods. 44 The American Rescue Plan Act of 2021 (the “ARPA”), among other things, includes provisions to expand the IRC Section 162(m) disallowance for deduction of certain compensation paid by publicly held corporations.
It is possible that settlement of audits or the expiration of the statute of limitations could have an impact on our effective tax rate in future periods. The ARPA, among other things, includes provisions to expand the IRC Section 162(m) disallowance for deduction of certain compensation paid by publicly held corporations.
General and administrative expenses for the fiscal years ended March 31, 2024 and 2023 include occupancy expense (primarily rent, utilities and office expenses) of $69.9 and $66.8, respectively, related to our development studios.
General and administrative expenses for the fiscal years ended March 31, 2025 and 2024 include occupancy expense (primarily rent, utilities and office expenses) of $73.9 and $69.9, respectively, related to our development studios.
As of March 31, 2024, and 2023, five customers comprised 69.9% and 61.1% of our gross accounts receivable, respectively, with our significant customers (those that individually comprised more than 10% of our gross accounts receivable balance) accounting for 57.7% and 50.3% of such balance at March 31, 2024, and 2023, respectively.
As of March 31, 2025, and 2024, five customers comprised 72.1% and 69.9% of our gross accounts receivable, respectively, with our significant customers (those that individually comprised more than 10% of our gross accounts receivable balance) accounting for 61.0% and 57.7% of such balance at March 31, 2025, and 2024, respectively.
Net revenue from digital online channels comprised 95.6% of our net revenue for the fiscal year ended March 31, 2024. We expect online delivery of games and game offerings to continue to be the primary part of our business over the long term.
Net revenue from digital online channels comprised 96.4% of our net revenue for the fiscal year ended March 31, 2025. We expect online delivery of games and game offerings to continue to be the primary part of our business over the long term.
Our Grand Theft Auto products in particular have historically accounted for a significant portion of our revenue. Sales of Grand Theft Auto products generated 14.7% of our net revenue for the fiscal year ended March 31, 2024. The timing of our Grand Theft Auto product releases may affect our financial performance on a quarterly and annual basis.
Additionally, our Grand Theft Auto products in particular have historically accounted for a significant portion of our revenue. Sales of Grand Theft Auto products generated 12.6% of our net revenue for the fiscal year ended March 31, 2025. The timing of our Grand Theft Auto product releases may affect our financial performance on a quarterly and annual basis.
As of March 31, 2024, the amount of cash and cash equivalents held outside of the U.S. by our foreign subsidiaries was $629.6. These balances are dispersed across various locations around the world. We believe that such dispersion meets the 47 business and liquidity needs of our foreign affiliates.
As of March 31, 2025, the amount of cash and cash equivalents held outside of the U.S. by our foreign subsidiaries was $791.3. These balances are dispersed across various locations around the world. We believe that such dispersion meets the business and liquidity needs of our foreign affiliates.
With few exceptions, we are no longer subject to income tax examinations in non-U.S. jurisdictions for years prior to fiscal year ended March 31, 2016. Certain taxing authorities are currently examining our income tax returns for the fiscal years ended March 31, 2016 through March 31, 2022.
With few exceptions, we are no longer subject to income tax examinations in non-U.S. jurisdictions for years prior to fiscal year ended March 31, 2018. Certain U.S. federal, state and foreign taxing authorities are currently examining our income tax returns for the fiscal years ended March 31, 2016 through March 31, 2023.
Our changes in cash flows were as follows: Fiscal Year Ended March 31, 2024 2023 2022 Net cash (used in) provided by operating activities $ (16.1) $ 1.1 $ 258.0 Net cash (used in) provided by investing activities (28.2) (2,876.3) 139.2 Net cash (used in) provided by financing activities (91.4) 1,930.3 (256.8) Effects of foreign currency exchange rates on cash, cash equivalents, and restricted cash and cash equivalents 3.1 (15.9) (5.2) Net change in cash, cash equivalents, and restricted cash and cash equivalents $ (132.6) $ (960.8) $ 135.2 At March 31, 2024, we had $1,102.0 of Cash, cash equivalents, and restricted cash and cash equivalents, compared to $1,234.6 at March 31, 2023.
Our changes in cash flows were as follows: Fiscal Year Ended March 31, 2025 2024 2023 Net cash (used in) provided by operating activities $ (45.2) $ (16.1) $ 1.1 Net cash (used in) provided by investing activities (151.5) (28.2) (2,876.3) Net cash provided by (used in) financing activities 650.5 (91.4) 1,930.3 Effects of foreign currency exchange rates on cash, cash equivalents, and restricted cash and cash equivalents 3.4 3.1 (15.9) Net change in cash, cash equivalents, and restricted cash and cash equivalents $ 457.2 $ (132.6) $ (960.8) At March 31, 2025, we had $1,559.2 of Cash, cash equivalents, and restricted cash and cash equivalents, compared to $1,102.0 at March 31, 2024.
A significant portion of our mobile titles are distributed, marketed, and promoted through third parties, primarily Apple’s App Store and the Google Play Store. Virtual items for our mobile games are purchased through the payment processing systems of these platform providers.
A significant portion of our mobile titles are distributed, marketed, and promoted through third parties, primarily Apple’s App Store and the Google Play Store. Virtual items for our mobile games are purchased principally through the payment processing systems of these platform providers, as well as our direct-to-consumer commerce platform.
Provision for income taxes Our income tax expense was $41.4 for the fiscal year ended March 31, 2024 as compared to a benefit from income taxes of $213.4 for the fiscal year ended March 31, 2023.
Benefit from income taxes Our income tax benefit was $12.4 for the fiscal year ended March 31, 2025 as compared to a provision for income taxes of $41.4 for the fiscal year ended March 31, 2024.
Many countries have already implemented or are taking steps to implement Pillar Two. Although the model rules provide a framework for applying the minimum tax, countries may enact Pillar Two slightly differently than the model rules and on different timelines. Many aspects of Pillar Two are effective for the fiscal year ending March 31, 2025.
Although the model rules provide a framework for applying the minimum tax, countries may enact Pillar Two slightly differently than the model rules and on different timelines. Many aspects of Pillar Two are effective for the fiscal year ending March 31, 2025.
The economic environment has affected our customers in the past and may do so in the future. There has been increased consolidation in our industry, as larger, better capitalized competitors will be in a stronger position to withstand prolonged periods of economic downturn and sustain their business through the financial volatility.
There has been increased consolidation in our industry, as larger, better capitalized competitors will be in a stronger position to withstand prolonged periods of economic downturn and sustain their business through the financial volatility.
As of March 31, 2024, we had gross unrecognized tax benefits, including interest and penalties, of $276.3, of which $167.9 would affect our effective tax rate if realized. For the fiscal year ended March 31, 2024, gross unrecognized tax benefits decreased by $18.5.
As of March 31, 2025, we had gross unrecognized tax benefits, including interest and penalties, of $267.1, of which $109.5 would affect our effective tax rate if realized. For the fiscal year ended March 31, 2025, gross unrecognized tax benefits decreased by $9.3.
Our products are currently designed for console gaming systems, PC, and mobile, including smartphones and tablets. We deliver our products through physical retail, digital download, online platforms, and cloud streaming services.
Our products are currently designed for console gaming systems, mobile, including smartphones and tablets, and PC. We deliver our products through physical retail, digital download, online platforms, and cloud streaming services. Refer to Item 1 - Business for additional discussion.
During the fiscal year ended March 31, 2024, we also recognized impairment charges related to our Software development costs and licenses of $109.9, of which $88.2 related to title cancellations as part of our cost reduction program (refer to Note 7 - Software Development Costs and Licenses and Note 21 - Business Reorganization) .
During the fiscal year ended March 31, 2025, we also recognized impairment charges related to our Software development costs and licenses of $77.5, of which $35.1 related to title cancellations as part of our cost reduction program (refer to Note 7 - Software Development Costs and Licenses and Note 21 - Business Reorganization) .
Basic and diluted loss per share for the fiscal year ended March 31, 2024 was $22.01, as compared to basic and diluted loss per share of $7.03 for the fiscal year ended March 31, 2023.
Basic and diluted loss per share for the fiscal year ended March 31, 2025 was $25.58, as compared to basic and diluted loss per share of $22.01 for the fiscal year ended March 31, 2024.
Net revenue from PC and other decreased by $73.2 and accounted for 8.1% of our total net revenue in the fiscal year ended March 31, 2024, as compared to 9.5% in the prior year.
Net revenue from PC and other increased by $158.2 and accounted for 10.5% of our total net revenue in the fiscal year ended March 31, 2025, as compared to 8.1% in the prior year.
Net Bookings were as follows: Fiscal Year Ended March 31, 2024 2023 Increase/(decrease) Increase/(decrease) % Net Bookings $ 5,333.0 $ 5,283.6 $ 49.4 0.9 % For the fiscal year ended March 31, 2024, Net Bookings increased by $49.4 as compared to the prior year.
Net Bookings were as follows: Fiscal Year Ended March 31, 2025 2024 Increase/(decrease) Increase/(decrease) % Net Bookings $ 5,648.0 $ 5,333.0 $ 315.0 5.9 % For the fiscal year ended March 31, 2025, Net Bookings increased by $315.0 as compared to the prior year.
Net loss and loss per share For the fiscal year ended March 31, 2024, net loss was $3,744.2, as compared to a net loss of $1,124.7 in the prior year.
Net loss and loss per share For the fiscal year ended March 31, 2025, net loss was $4,478.9, as compared to a net loss of $3,744.2 in the prior year.
At March 31, 2024, we had $1,102.0 of Cash, cash equivalents, and restricted cash and cash equivalents, compared to $1,234.6 at March 31, 2023.
At March 31, 2025, we had $1,559.2 of Cash, cash equivalents, and restricted cash and cash equivalents, compared to $1,102.0 at March 31, 2024.
Liquidity and Capital Resources Our primary cash requirements are to fund (i) the development, manufacturing and marketing of our published products, (ii) working capital, (iii) capital expenditures, (iv) debt and interest payments, (v) tax payments, and (vi) acquisitions.
See Note 12 - Loss Per Share to our Consolidated Financial Statements for additional information. Liquidity and Capital Resources Our primary cash requirements are to fund (i) the development, manufacturing and marketing of our published products, (ii) working capital, (iii) capital expenditures, (iv) debt and interest payments, (v) tax payments, and (vi) acquisitions.
We are subject to risks inherent in foreign trade, including increased credit risks, tariffs and duties, fluctuations in foreign currency exchange rates, shipping delays and international political, regulatory and economic developments, all of which can have a significant effect on our operating results. 48 Fluctuations in Quarterly Operating Results and Seasonality We have experienced fluctuations in quarterly and annual operating results as a result of the timing of the introduction of new titles, variations in sales of titles developed for particular platforms, market acceptance of our titles, development and promotional expenses relating to the introduction of new titles, sequels or enhancements of existing titles, projected and actual changes in platforms, the timing and success of title introductions by our competitors, product returns, changes in pricing policies by us and our competitors, the accuracy of retailers' forecasts of consumer demand, the size and timing of acquisitions, the timing of orders from major customers, and order cancellations and delays in product shipment.
Fluctuations in Quarterly Operating Results and Seasonality We have experienced fluctuations in quarterly and annual operating results as a result of the timing of the introduction of new titles, variations in sales of titles developed for particular platforms, market acceptance of our titles, development and promotional expenses relating to the introduction of new titles, sequels or enhancements of existing titles, projected and actual changes in platforms, the timing and success of title introductions by our competitors, product returns, changes in pricing policies by us and our competitors, the accuracy of retailers' forecasts of consumer demand, the size and timing of acquisitions, the timing of orders from major customers, and order cancellations and delays in product shipment.
For the fiscal year ended March 31, 2024, our net loss was $3,744.2, as compared to net loss of $1,124.7 in the prior year. Diluted loss per share for the fiscal year ended March 31, 2024 was $22.01, as compared to Diluted loss per share of $7.03 for the fiscal year ended March 31, 2023.
For the fiscal year ended March 31, 2025, our net loss was $4,478.9, as compared to net loss of $3,744.2 in the prior year. Diluted loss per share for the fiscal year ended March 31, 2025 was $25.58, as compared to Diluted loss per share of $22.01 for the fiscal year ended March 31, 2024.
For the fiscal years ended March 31, 2024, 2023, and 2022, 38.7%, 37.2%, and 40.1%, respectively, of our net revenue was earned outside the United States.
For the fiscal years ended March 31, 2025, 2024, and 2023, 39.5%, 38.7%, and 37.2%, respectively, of our net revenue was earned outside the U.S.
We will continue to evaluate the potential impact the Inflation Reduction Act may have on our operations and Consolidated Financial Statements in future periods. The Organization for Economic Co-operation and Development (”OECD”) has proposed a global minimum tax of 15% of reported profits, referred to as Pillar Two.
We will continue to evaluate the potential impact the Inflation Reduction Act may have on our operations and Consolidated Financial Statements in future periods. The OECD has proposed a global minimum tax of 15% of reported profits, referred to as Pillar Two. Many countries have already implemented or are taking steps to implement Pillar Two.
We had three customers who accounted for 21.8%, 18.1%, and 16.9% of our gross accounts receivable as of March 31, 2024, and three customers who accounted for 21.6%, 14.5%, and 14.2% of our gross accounts receivable as of March 31, 2023.
We had three customers who accounted for 24.0%, 21.3%, and 15.7% of our gross accounts receivable as of March 31, 2025, and three customers who accounted for 21.8%, 18.1%, and 16.9% of our gross accounts receivable as of March 31, 2024.
Our operating loss for the fiscal year ended March 31, 2024 was $3,590.6 compared to operating loss of $1,165.2 for fiscal year ended March 31, 2023, primarily due to Goodwill impairment charges of $2,342.1, representing a partial impairment related to one of our reporting units.
Our operating loss for the fiscal year ended March 31, 2025 was $4,391.1 compared to operating loss of $3,590.6 for fiscal year ended March 31, 2024, primarily due to an increase in Goodwill impairment charges of $1,203.1 related to an additional partial impairment related to one of our reporting units.
These increases were partially offset by a decrease in net revenue from Tiny Tina's Wonderlands , our Sid Meier's Civilization franchise and The Quarry. Net revenue from physical retail and other channels decreased by $26.8 and accounted for 4.4% of our total net revenue for the fiscal year ended March 31, 2024, as compared to 4.9% for the prior year.
These increases were partially offset by a decrease in net revenue from our Grand Theft Auto franchise . Net revenue from physical retail and other channels decreased by $35.6 and accounted for 3.6% of our total net revenue for the fiscal year ended March 31, 2025, as compared to 4.4% for the prior year.
Interest and other, net 2024 % of net revenue 2023 % of net revenue Increase/(decrease) % Increase/(decrease) Interest income $ 62.3 1.2 % $ 33.8 0.6 % $ 28.5 84.3 % Interest expense (140.6) (2.6) % (129.6) (2.4) % (11.0) 8.5 % Foreign currency exchange gain (loss) (28.6) (0.5) % (31.8) (0.6) % 3.2 (10.1) % Other 3.3 0.1 % (14.3) (0.3) % 17.6 (123.1) % Interest and other, net $ (103.6) (1.9) % $ (141.9) (2.7) % $ 38.3 (27.0) % Interest and other, net was expense of $103.6 for the fiscal year ended March 31, 2024, as compared to $141.9 for the fiscal year ended March 31, 2023.
Interest and other, net 2025 % of net revenue 2024 % of net revenue Increase/(decrease) % Increase/(decrease) Interest income $ 98.6 1.8 % $ 62.3 1.2 % $ 36.3 58.3 % Interest expense (167.3) (3.0) % (140.6) (2.6) % (26.7) 19.0 % Foreign currency exchange gain (loss) (22.6) (0.4) % (28.6) (0.5) % 6.0 (21.0) % Other (2.0) — % 3.3 0.1 % (5.3) (160.6) % Interest and other, net $ (93.3) (1.7) % $ (103.6) (1.9) % $ 10.3 (9.9) % Interest and other, net was expense of $93.3 for the fiscal year ended March 31, 2025, as compared to $103.6 for the fiscal year ended March 31, 2024.
Such console revenue comprised 40.5% of our net revenue by product platform for the fiscal year ended March 31, 2024. The success of our business is dependent upon consumer acceptance of these platforms and the continued growth in the installed base of these platforms.
Such console revenue comprised 37.3% of our net revenue by product platform for the fiscal year ended March 31, 2025. The success of our business is dependent upon consumer acceptance of these platforms and 39 the continued growth in the installed base of these platforms, which could be impacted by global economic factors, including global tariff policy.
Depreciation and amortization Depreciation and amortization expenses increased by $48.9 for the fiscal year ended March 31, 2024, as compared to the prior year period, due primarily to leasehold improvements for office buildouts, acquired intangible assets, and depreciation expense related to Zynga.
Depreciation and amortization Depreciation and amortization expenses increased by $58.2 for the fiscal year ended March 31, 2025, as compared to the prior year period, primarily due to increases in (i) impairment expense related to our intangible assets (refer to Note 9 - Goodwill and Intangible Assets, Net ), (ii) IT infrastructure expense, and (iii) leasehold improvements for office buildouts.
Principally for our mobile titles, we use advertising and other forms of player acquisition and retention to grow and retain our player audience. These expenditures, which are recorded within Sales and marketing in our Consolidated Statements of Operations, generally relate to the promotion of new game launches and ongoing performance-based programs to drive new player acquisition and lapsed player reactivation.
These expenditures, which are recorded within Sales and marketing in our Consolidated Statements of Operations, generally relate to the promotion of new game launches and ongoing performance-based programs to drive new player acquisition and lapsed player reactivation. Over time, the effectiveness or cost of these acquisition and retention-related programs may change, affecting our operating results.
Financial Condition We are subject to credit risks, particularly if any of our receivables represent a limited number of customers or are concentrated in foreign markets. If we are unable to collect our accounts receivable as they become due, it could adversely affect our liquidity and working capital position.
Financial Condition We are subject to credit risks, particularly if any of our receivables represent a limited number of customers or are concentrated in foreign markets.
Net revenue from mobile increased by $209.4 and accounted for 51.4% of our total net revenue in the fiscal year ended March 31, 2024, as compared to 47.5% in the prior year.
Net revenue from mobile increased by $194.0 and accounted for 52.2% of our total net revenue in the fiscal year ended March 31, 2025, as compared to 51.4% in the prior year. The increase was primarily due to an increase in net revenue from Match Factory! and Toon Blast.
When compared to the statutory rate of 21%, the effective tax rate of 15.9% for the fiscal year ended March 31, 2023 was due primarily to an expense of $84.0 from an increase in the U.S. valuation allowance, expense of $39.7 from our geographic mix and foreign earnings, and $20.2 nondeductible expense relating to compensation expense related to covered employees pursuant to Section 162(m) and loss on the redemption of convertible debt, partially offset by a $76.8 benefit from tax credits anticipated to be utilized.
When compared to the statutory rate of 21%, the effective tax rate of 0.3% for the fiscal year ended March 31, 2025 was primarily due to an expense of $718.0 from nondeductible goodwill impairments, $222.7 from an increase in the U.S. valuation allowance expense, $25.5 from an increase in the foreign valuation allowance expense, $41.4 from our geographic mix and foreign earnings partially offset by a $54.5 benefit from tax credits anticipated to be utilized.
The program does not require us to repurchase shares and may be suspended or discontinued at any time for any reason.
The program does not require us to repurchase shares and may be suspended or discontinued at any time for any reason. During the fiscal years ended March 31, 2025, 2024, and 2023, we did not repurchase shares of our common stock.
Net revenue from digital online channels increased by $26.5 and accounted for 95.6% of our total net revenue for the fiscal year ended March 31, 2024, as compared to 95.1% in the prior year.
Net revenue from digital online channels increased by $319.6 and accounted for 96.4% of our total net revenue for the fiscal year ended March 31, 2025, as compared to 95.6% in the prior year. The increase was primarily due to an increase in net revenue from Match Factory! , our Sid Meier's Civilization franchise, and Toon Blast.
Basic weighted average shares of 170.1 were 10.2 higher due primarily to normal stock compensation activity, including vests as well as grants and forfeitures in the prior year being fully outstanding in the current year. See Note 12 - (Loss) Earnings Per Share to our Consolidated Financial Statements for additional information.
Basic weighted average shares of 175.1 were 5.0 higher as compared to the prior year period basic weighted average shares, primarily due to stock issued as consideration for the acquisition of Gearbox, as well as normal stock compensation activity, including vests as well as grants and forfeitures in the prior year being fully outstanding in the current year.
A majority of our trade receivables are derived from sales to major retailers, including digital storefronts and platform partners, and distributors. Our five largest customers accounted for 79.8%, 79.6% and 79.0% of net revenue during the fiscal years ended March 31, 2024, 2023 and 2022, respectively.
Our five largest customers accounted for 81.0%, 79.8% and 79.6% of net revenue during the fiscal years ended March 31, 2025, 2024 and 2023, respectively.
To a lesser extent, the decrease was also due to i) Net cash used in investing activities which was due primarily to the purchase of fixed assets and our immaterial acquisitions and investments, offset by our sales and maturities of available for sale securities, and ii) Net cash used in operating activities, which was due primarily to investments in software development and licenses, partially offset by sales of our products.
This increase was partially offset by (i) Net cash used in investing activities which was primarily due to the purchase of fixed assets and (i) Net cash used in operating activities, which was primarily due to investments in software development and licenses, partially offset by sales of our products. 47 Commitments Refer to Note 14 - Commitments and Contingencies to our Consolidated Financial Statements for disclosures regarding our commitments.
The Inflation Reduction Act of 2022 (the “Inflation Reduction Act”) includes a new corporate alternative minimum tax (CAMT) of 15% on the adjusted financial statement income (AFSI) of corporations with an average AFSI exceeding $1.0 billion over a consecutive three-year period. The CAMT was effective for taxable year ending March 31, 2024.
We continue to evaluate the potential impact ARPA may have on our operations and Consolidated Financial Statements in future periods. The Inflation Reduction Act includes a new CAMT of 15% on the AFSI of corporations with an average AFSI exceeding $1.0 billion over a consecutive three-year period. The CAMT is effective for taxable year ending March 31, 2024.
The decrease was due to a decrease in net revenue from The Quarry, Tiny Tina's Wonderlands, our Sid Meier's Civilization, PGA TOUR 2K, and Mafia franchises, partially offset by an increase in net revenue from our Grand Theft Auto and Red Dead Redemption franchises, and LEGO 2K Drive .
The decrease was primarily due to a decrease in net revenue from our Grand Theft Auto and NBA 2K franchises, and LEGO 2K Drive , which released in May 2023 . These decreases were partially offset by an increase in net revenue from TopSpin 2K25 , which released in April 2024, and our Sid Meier's Civilization franchise.
As of March 31, 2024, there were no borrowings under the 2022 Credit Agreement, and we had approximately $497.7 available for additional borrowings.
On April 14, 2025, we repaid our 2025 Notes with a principal amount of $600.0. Credit Agreement As of March 31, 2025, there were no borrowings under the 2022 Credit Agreement, and we had approximately $747.8 available for additional borrowings.
Gross profit as a percentage of net revenue for the fiscal year ended March 31, 2024 was 41.9%, as compared to 42.7% in the prior year.
The decrease was primarily due to a decrease in net revenue from our NBA 2K and Red Dead Redemption franchises, and LEGO 2K Drive . Gross profit as a percentage of net revenue for the fiscal year ended March 31, 2025 was 54.3%, as compared to 41.9% in the prior year.
Net revenue from full game and other decreased by $33.4 and accounted for 21.2% of net revenue for the fiscal year ended March 31, 2024, as compared to 21.9% for the prior year.
These increases were partially offset by a decrease in net revenue from our Grand Theft Auto franchise. Net revenue from full game and other increased by $22.9 and accounted for 20.6% of net revenue for the fiscal year ended March 31, 2025, as compared to 21.2% for the prior year.
Net revenue from console games decreased by $136.5 and accounted for 40.5% of our total net revenue in the fiscal year ended March 31, 2024, as compared to 43.0% in the prior year.
These increases were partially offset by a decrease in our Grand Theft Auto franchise, Merge Dragons!, and as a result of a divestiture. Net revenue from console games decreased by $68.2 and accounted for 37.3% of our total net revenue in the fiscal year ended March 31, 2025, as compared to 40.5% in the prior year.
Generally, we have been able to collect our accounts receivable in the ordinary course of business. We do not hold any collateral to secure payment from customers. We have trade credit insurance on the majority of our customers to mitigate accounts receivable risk.
If we are unable to collect our accounts receivable as they become due, it could adversely affect our liquidity and working capital position. 46 Generally, we have been able to collect our accounts receivable in the ordinary course of business. We do not hold any collateral to secure payment from customers.
Research and development Research and development expenses increased by $60.6 for the fiscal year ended March 31, 2024, as compared to the prior year period, due primarily to increases in personnel expenses due to increased headcount, including related to our acquisition of Zynga.
Research and development Research and development expenses increased by $57.0 for the fiscal year ended March 31, 2025, as compared to the prior year period, primarily due to increases in (i) personnel expenses due to increased headcount and (ii) production and development expenses for titles that are not technologically feasible, partially offset by the timing of tax related credits for certain titles.
Fiscal 2024 Financial Summary Our net revenue for the fiscal year ended March 31, 2024 was essentially flat year-on-year at $5,349.6, a decrease of $0.3 or 0.0% compared to the fiscal year ended March 31, 2023 and included net revenue of $2,390.9 from Zynga, which we acquired in May 2022 (refer to Note 20 - Acquisitions ), including top contributors Toon Blast , our hyper-casual mobile portfolio, Empires & Puzzles, Merge Dragons! , and Words With Friends, as well as a variety of our top franchises, primarily NBA 2K, Grand Theft Auto, Red Dead Redemption , and WWE 2K.
Fiscal 2025 Financial Summary Our net revenue for the fiscal year ended March 31, 2025 was led by a variety of our top franchises, primarily NBA 2K, Grand Theft Auto , Red Dead Redemption , WWE 2K , and Sid Meier's Civilization, as well as top contributors Toon Blast , our hyper-casual mobile portfolio, Empires & Puzzles , Match Factory! , and Words With Friends.
To a lesser extent, the decrease was also due to i) Net cash used in investing activities, which was due primarily to the purchase of fixed assets and our individually immaterial acquisitions and investments, offset by our sales and maturities of available for sale securities, and ii) Net cash used in operating activities, which was due primarily to investments in software development and licenses, partially offset by sales of our products.
This increase was partially offset by (i) Net cash used in investing activities, which was primarily due to the purchase of fixed assets and (ii) Net cash used in operating activities, which was primarily due to investments in software development and licenses, partially offset by sales of our products. 40 On June 11, 2024, we completed the purchase of 100% of the issued and outstanding capital stock of The Gearbox Entertainment Company, Inc.
The 2024 Convertible Notes and 2026 Convertible Notes mature on June 1, 2024, and December 15, 2026, respectively, unless earlier converted, redeemed, or repurchased in accordance with their terms, respectively, prior to the maturity date. Interest is payable semiannually on the 2024 Convertible Notes in arrears on March 1 and September 1 of each year.
Convertible Notes The 2026 Convertible Notes mature on December 15, 2026, unless earlier converted, redeemed, or repurchased in accordance with their terms, prior to the maturity date. The 2026 Convertible Notes do not bear regular interest, and the principal amount does not accrete. An aggregate principal amount of $29.4 of the 2026 Convertible Notes remained outstanding at March 31, 2025.
Short-term Investments As of March 31, 2024, we had $22.0 of short-term investments, which primarily consisted of bank time deposits with maturities greater than 90 days.
Short-term Investments As of March 31, 2025, we had $9.4 of short-term investments, which primarily consisted of bank time deposits with maturities greater than 90 days. From time to time, we may place additional short-term investments depending on future market conditions and liquidity needs. Senior Notes As of March 31, 2025, we had $3,650.0 of Senior Notes outstanding.
Changes in foreign currency exchange rates increased net revenue and gross profit by $10.2 and $3.5, respectively, in the fiscal year ended March 31, 2024 as compared to the prior year. 42 Operating Expenses 2024 % of net revenue 2023 % of net revenue Increase/(decrease) % Increase/(decrease) Selling and marketing $ 1,550.2 29.0 % $ 1,586.5 29.7 % $ (36.3) (2.3) % Research and development 948.2 17.7 % 887.6 16.6 % 60.6 6.8 % General and administrative 716.1 13.4 % 839.5 15.7 % (123.4) (14.7) % Depreciation and amortization 171.2 3.2 % 122.3 2.3 % 48.9 40.0 % Goodwill impairment 2,342.1 43.8 % — — % 2,342.1 100.0 % Business reorganization 104.6 1.9 % $ 14.6 0.3 % 90.0 616.4 % Total operating expenses $ 5,832.4 109.0 % $ 3,450.5 64.5 % $ 2,381.9 69.0 % Includes stock-based compensation expense, which was allocated as follows: 2024 2023 Selling and marketing $ 95.3 $ 95.2 Research and development 104.4 116.6 General and administrative 111.5 115.5 Foreign currency exchange rates increased total operating expenses by $19.5 for the fiscal year ended March 31, 2024 as compared to the prior year.
Operating Expenses 2025 % of net revenue 2024 % of net revenue Increase/(decrease) % Increase/(decrease) Selling and marketing $ 1,683.7 29.9 % $ 1,550.2 29.0 % $ 133.5 8.6 % Research and development 1,005.2 17.8 % 948.2 17.7 % 57.0 6.0 % General and administrative 883.3 15.7 % 716.1 13.4 % 167.2 23.3 % Depreciation and amortization 229.4 4.1 % 171.2 3.2 % 58.2 34.0 % Goodwill impairment 3,545.2 62.9 % 2,342.1 43.8 % 1,203.1 51.4 % Business reorganization 106.5 1.9 % $ 104.6 1.9 % 1.9 1.8 % Total operating expenses $ 7,453.3 132.3 % $ 5,832.4 109.0 % $ 1,620.9 27.8 % Includes stock-based compensation expense, which was allocated as follows: 2025 2024 Selling and marketing $ 92.4 $ 95.3 Research and development 99.0 104.4 General and administrative 123.2 111.5 Foreign currency exchange rates decreased total operating expenses by $6.8 for the fiscal year ended March 31, 2025 as compared to the prior year. 43 Selling and marketing Selling and marketing expenses increased by $133.5 for the fiscal year ended March 31, 2025 as compared to the prior year period, primarily due to (i) higher overall marketing expenses for Match Factory! , Game of Thrones: Legends , and our Sid Meier's Civilization franchise, partially offset by lower marketing expenses for our hyper-casual mobile portfolio, and (ii) lower amortization related to our intangible assets.
Refer to Item 1 - Business for additional discussion. 37 Impairments During the fiscal year ended March 31, 2024, we recognized Goodwill impairment charges of $2,342.1, representing a partial impairment related to one of our reporting units, and we recognized impairment charges of $577.4 for acquisition-related Developed Game Technology intangible assets within Cost of revenue as a result of a reduction in the forecasted performance of certain games due to industry conditions and changes in our strategies in response to those conditions.
Impairments During the fiscal year ended March 31, 2025, we recognized Goodwill impairment charges of $3,545.2, representing a partial impairment related to one of our reporting units, and we recognized impairment charges of $137.0 for acquisition-related Developed Game Technology intangible assets within Cost of revenue and $39.3 for acquisition-related Branding and Trade Names intangible assets within Depreciation and amortization.
Goodwill impairment Goodwill impairment expense was $2,342.1 for the fiscal year ended March 31, 2024 due to a partial impairment recognized related to one of our reporting units (refer to Note 9 - Goodwill and Intangible Assets, Net ), with no corresponding expense in the prior year. 43 Business reorganization Business reorganization expense increased by $90.0 for the fiscal year ended March 31, 2024, as compared to the prior year period, due primarily to titles cancelled as part of our approved cost reduction program.
Goodwill impairment Goodwill impairment expense for the fiscal years ended March 31, 2025 and 2024, were $3,545.2 and $2,342.1, respectively, due to partial impairments recognized related to one of our reporting units (refer to Note 9 - Goodwill and Intangible Assets, Net ).
The percentage decrease was due primarily to higher amortization related to intangible assets related to our Zynga acquisition, including a $577.4 impairment charge (refer to Note 9 - Goodwill and Intangible Assets, net ) partially offset by lower internal royalties due to the timing of when royalties are earned.
The increase was primarily due to lower impairment charges related to intangible assets related to our Zynga acquisition (refer to Note 9 - Goodwill and Intangible Assets, net ).
Recurrent consumer spending ("RCS") is generated from ongoing consumer engagement and includes revenue from virtual currency, add-on content, in-game purchases, and in-game advertising. Net revenue from recurrent consumer spending increased by $33.1 and accounted for 78.8% of net revenue for the fiscal year ended March 31, 2024, as compared to 78.1% for the prior year.
Net revenue from recurrent consumer spending increased by $261.1 and accounted for 79.4% of net revenue for the fiscal year ended March 31, 2025, as compared to 78.8% for the prior year. The increase was primarily due to an increase in net revenue from Match Factory! and Toon Blast .
General and administrative General and administrative expenses decreased by $123.4 for the fiscal year ended March 31, 2024, as compared to the prior year period, due to a decrease in professional fees related to our acquisition and integration of Zynga, a right-of-use asset impairment expense related to Zynga's San Francisco office (see Note 13 - Leases ) in the prior year with no corresponding expense in the current year, a reduction of expense in the current year as compared to the prior year related to updating the fair value of contingent earn-out liability related to our acquisition of Nordeus, and a decrease in the fair value of the contingent earn-out liability related to our acquisition of Popcore.
General and administrative General and administrative expenses increased by $167.2 for the fiscal year ended March 31, 2025, as compared to the prior year period, primarily due to increases in (i) transaction costs related to our acquisition of Gearbox (refer to Note 2 0 - Acquisitions ), (ii) personnel expenses due to increased headcount, (iii) legal fees and contingencies related to the IBM case against Zynga, (iv) IT-related expenses for cloud-based services and IT infrastructure, as well as, (v) a reduction of expense in the prior year related to updating the fair value of contingent earn-out liability for our acquisition of Popcore with no corresponding reduction in the current year.
It is possible that Pillar Two could result in additional tax liability over the regular corporate tax liability in a particular jurisdiction to the extent tax expense is less than the 15% minimum rate. We will continue to evaluate the potential impact Pillar Two may have on our operations and Consolidated Financial Statements in future periods.
Pillar Two could result in additional tax liability over the regular corporate tax liability in a particular jurisdiction to the extent tax expense is less than a 15% minimum rate. The impact of Pillar Two was not material to the tax provision for the fiscal year ended March 31, 2025.
The net decrease was due primarily to an increase in interest income primarily due to increases in interest rates, a gain on debt extinguishment recognized on the partial repayment of our 2024 Notes, a decrease in interest expense related to our bridge loan commitment in connection with our acquisition of Zynga in the prior year, and a decrease in foreign currency losses.
The net decrease in expense was primarily due to an increase in interest income primarily due to increases in interest rates and cash balances and a gain on the sale of an investment.
Loss on fair value adjustments, net Loss on fair value adjustments, net for the fiscal year ended March 31, 2024 was a loss of $8.6 compared to a loss of $31.0 in the prior year period.
These decreases in net expense were partially offset by increases in foreign currency losses, interest expense related to our debt transactions (refer to Note 11 - Debt ) and a gain on debt extinguishment recognized in the prior year on the partial repayment of our 2024 Notes. 44 Loss on fair value adjustments, net Loss on fair value adjustments, net for the fiscal year ended March 31, 2025 was a loss of $6.9 compared to a loss of $8.6 in the prior year period.
The increase was due to an increase in net revenue of $224.5 from Zynga, including top contributors Toon Blast , our hyper-casual mobile portfolio, Empires & Puzzles , Merge Dragons!, and Words With Friends, partially offset by a decrease in net revenue from our Grand Theft Auto franchise, Tiny Tina's Wonderlands, our NBA 2K franchise, Two Dots, and our Sid Meier's Civilization franchise.
The increase was primarily due to an increase in net revenue from our Sid Meier's Civilization franchise and TopSpin 2K25 . These increases were partially offset by a decrease in net revenue from our NBA 2K franchise , a decrease as a result of a divestiture in our business, and a decrease in our Grand Theft Auto franchise.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeOur hedging programs are designed to reduce, but do not entirely eliminate, the effect of currency exchange rate movements. We believe that the counterparties to these foreign currency forward contracts are creditworthy multinational commercial banks and that the risk of counterparty nonperformance is not material.
Biggest changeThe fair value of these outstanding forward contracts is estimated based on the prevailing exchange rates of the various hedged currencies as of the end of the period. Our hedging programs are designed to reduce, but do not entirely eliminate, the effect of currency exchange rate movements.
Interest Rate Risk Our exposure to fluctuations in interest rates relates primarily to our short-term investment portfolio and variable rate debt under the Credit Agreement. We seek to manage our interest rate risk by maintaining a short-term investment portfolio that includes corporate bonds with high credit quality and maturities of less than two years.
Interest Rate Risk Our exposure to fluctuations in interest rates relates primarily to our short-term investment portfolio and variable rate debt under the 2022 Credit Agreement. We seek to manage our interest rate risk by maintaining a short-term investment portfolio that includes corporate bonds with high credit quality and maturities of less than two years.
These transactions are not designated as hedging instruments and are accounted for as derivatives whereby the fair value of the contracts is reported as either assets or 49 liabilities on our Consolidated Balance Sheets, and gains and losses resulting from changes in the fair value are reported in Interest and other, net, in our Consolidated Statements of Operations.
These transactions are not designated as hedging instruments and are accounted for as derivatives whereby the fair value of the contracts is reported as either assets or liabilities on our Consolidated Balance Sheets, and gains and losses resulting from changes in the fair value are reported in Interest and other, net, in our Consolidated Statements of Operations.
At March 31, 2024, there were no outstanding borrowings under our 2022 Credit Agreement. Foreign Currency Exchange Rate Risk We transact business in foreign currencies and are exposed to risks resulting from fluctuations in foreign currency exchange rates. In particular, during the six months ended September 30, 2023, there was a significant devaluation of the Turkish Lira against the U.S.
At March 31, 2025, there were no outstanding borrowings under our 2022 Credit Agreement. Foreign Currency Exchange Rate Risk We transact business in foreign currencies and are exposed to risks resulting from fluctuations in foreign currency exchange rates. In particular, during the six months ended September 30, 2023, there was a significant devaluation of the Turkish Lira against the U.S.
We determined that, based on the composition of our investment portfolio, there was no material interest rate risk exposure to our Consolidated Financial Statements or liquidity as of March 31, 2024. Historically, fluctuations in interest rates have not had a significant effect on our operating results.
We determined that, based on the composition of our investment portfolio, there was no material interest rate risk exposure to our Consolidated Financial Statements or liquidity as of March 31, 2025. Historically, fluctuations in interest rates have not had a significant effect on our operating results.
For the fiscal years ended March 31, 2024, 2023 and 2022, we recorded a gain of $5.3, a loss of $15.1, and a gain of $5.9, respectively, related to foreign currency forward contracts in Interest and other, net on our Consolidated Statements of Operations.
For the fiscal years ended March 31, 2025, 2024 and 2023, we recorded a gain of $5.3, a gain of $5.3, and a loss of $15.1, respectively, related to foreign currency forward contracts in Interest and other, net on our Consolidated Statements of Operations.
We recognized foreign currency exchange transaction losses of $28.6, $31.8, and $7.3 for the fiscal years ended March 31, 2024, 2023, and 2022, respectively, in Interest and other, net in our Consolidated Statements of Operations.
We recognized foreign currency exchange transaction losses of $22.6, $28.6, and $31.8 for the fiscal years ended March 31, 2025, 2024, and 2023, respectively, in Interest and other, net in our Consolidated Statements of Operations.
We do not enter into derivative financial contracts for speculative or trading purposes. At March 31, 2024, we had $72.2 of forward contracts outstanding to buy foreign currencies in exchange for U.S. dollars and $243.0 of forward contracts outstanding to sell foreign currencies in exchange for U.S. dollars all of which have maturities of less than one year.
We do not enter into derivative financial contracts for speculative or trading purposes. At March 31, 2025, we had $97.0 of forward contracts outstanding to buy foreign currencies in exchange for U.S. dollars and $299.8 of forward contracts outstanding to sell foreign currencies in exchange for U.S. dollars all of which have maturities of less than one year.
Under our 2022 Credit Agreement, loans will bear interest at our election of (a) 0.000% to 0.625% above a certain base rate (8.50% at March 31, 2024) or (b) 1.000% to 1.625% above Secured Overnight Financing Rate ("SOFR"), approximately 5.33% at March 31, 2024, which are determined by the Company's credit rating.
Under our 2022 Credit Agreement, loans will bear interest at our election of (a) 0.000% to 0.625% above a certain base rate (7.50% at March 31, 2025) or (b) 1.000% to 1.625% above Secured Overnight Financing Rate, approximately 4.33% 48 at March 31, 2025, which are determined by the Company's credit rating.
At March 31, 2023, we had $51.2 of forward contracts outstanding to buy foreign currencies in exchange for U.S. dollars and $224.3 of forward contracts outstanding to sell foreign currencies in exchange for U.S. dollars all of which have maturities of less than one year.
At March 31, 2024, we had $72.2 of forward contracts outstanding to buy foreign currencies in exchange for U.S. dollars and $243.0 of forward contracts outstanding to sell foreign currencies in exchange for U.S. dollars all of which have maturities of less than one year.
For the fiscal years ended March 31, 2024 and 2023, our foreign currency translation adjustment was a gain of $6.7 and a loss of $58.9, respectively.
For the fiscal years ended March 31, 2025 and 2024, our foreign currency translation adjustment was a gain of $8.2 and a gain of $6.7, respectively.
For the fiscal year ended March 31, 2024, 38.7% of our revenue was generated outside the United States. Using sensitivity analysis, a hypothetical 10% increase in the value of the U.S. dollar against all currencies would decrease revenue by 3.9%, while a hypothetical 10% decrease in the value of the U.S. dollar against all currencies would increase revenue by 3.9%.
For the fiscal year ended March 31, 2025, 39.5% of our revenue was generated outside the U.S. Using sensitivity analysis, a hypothetical 10% increase in the value of the U.S. dollar against all currencies would decrease revenue by 4.0%, while a hypothetical 10% decrease in the value of the U.S. dollar against all currencies would increase revenue by 4.0%.
We do not currently use derivative financial instruments in our short-term investment portfolio. Our investments are held for purposes other than trading. As of March 31, 2024, we had $22.0 of short-term investments, which included $0.0 of available-for-sale securities.
We do not currently use derivative financial instruments in our short-term investment portfolio. Our investments are held for purposes other than trading. As of March 31, 2025, we had $9.4 of short-term investments. We also had $1,456.1 of cash and cash equivalents that are comprised primarily of money market funds and bank-time deposits.
Notwithstanding our efforts to mitigate some foreign currency exchange rate risks, there can be no assurance that our hedging activities will adequately protect us against the risks associated with foreign currency fluctuations, which may be more volatile as a result of the COVID-19 pandemic.
We believe that the counterparties to these foreign currency forward contracts are creditworthy multinational commercial banks and that the risk of counterparty nonperformance is not material. Notwithstanding our efforts to mitigate some foreign currency exchange rate risks, there can be no assurance that our hedging activities will adequately protect us against the risks associated with foreign currency fluctuations.
As of March 31, 2024 and 2023, the fair values of these outstanding forward contracts were immaterial and were included in Accrued expenses and other current liabilities. The fair value of these outstanding forward contracts is estimated based on the prevailing exchange rates of the various hedged currencies as of the end of the period.
As of March 31, 2025 and 2024, the fair values of these outstanding forward contracts were immaterial, and were included in Accrued expenses and other current liabilities when in a loss position, or in Prepaid expenses and other when in a gain position.
Removed
The available-for-sale securities were recorded at fair market value with unrealized gains or losses resulting from changes in fair value reported as a separate component of Accumulated other comprehensive loss (income), in Stockholders' equity. We also had $754.0 of cash and cash equivalents that are comprised primarily of money market funds and bank-time deposits.

Other TTWO 10-K year-over-year comparisons