Electronic Arts agreeing to a $55 billion deal to go private. A move that could mark the largest leverage buyout in history. For more, we'll bring in Jason Basin, the managing director over at City.Jason, always good to see you, my friends. All right, so EA going private, $55 billion deal, Saudi private investment fund, Silver Lake, Affinity Partners. I I guess my first question, Jason, I'm curious what you think they could do privately.What financial and strategic moves can they make, Jason. privately that ...

Company Overview - Take-Two Interactive is a leading multi-platform developer, publisher, and marketer of interactive entertainment[7] - The company's strategy is to create hit entertainment experiences delivered on every platform relevant to its audience[9] - The company has significantly expanded its development staff headcount to support its pipeline[24] - As of March 31, 2025, the company's development studio staff headcount is 10,099[26] Market Opportunity - The global video game market is projected to reach $210 billion in 2025[29] - The interactive entertainment market is estimated to reach $95 billion in 2025[31] - There were nearly 136 billion new app downloads in 2024[31] Key Franchises - The Grand Theft Auto franchise has sold-in nearly 450 million units[43] - Grand Theft Auto V has sold-in over 215 million units to date[43] - The Red Dead Redemption series has sold-in over 100 million units worldwide[47] - The NBA 2K franchise has sold-in over 160 million units worldwide[58] Financial Performance - Net bookings are diversified across various platforms, with mobile accounting for 51%, console for 38%, and PC and other for 11% of FY2025 net bookings[128] - FY2025 net bookings is $5,648 million[128]

Financial Data and Key Metrics Changes - For FY 2025, the company reported net bookings of $7.36 billion, a decrease of 1% year-over-year [24] - Full game net bookings were $2.02 billion, up 1%, driven by strong performance in EA Sports College Football '25 and new releases [25] - Live services net bookings were $5.34 billion, down 2%, impacted by a decline in Apex Legends and softness in FC Ultimate Team [25] - The company achieved a gross margin of 79.3%, an improvement of nearly 200 basis points, due to lower licensing fees [26] - Operating expenses increased by 2% to $4.4 billion, while earnings per share rose to $4.25 [26] Business Line Data and Key Metrics Changes - EA SPORTS FC saw a significant rebound in engagement and monetization following a major gameplay update in January, leading to double-digit growth in player engagement [5][8] - The American football ecosystem generated over $1 billion in net bookings, up over 70% year-over-year, with a 68% increase in hours played [9][10] - The Sims franchise delivered over 30% net bookings growth in Q4, driven by the 25th anniversary celebrations and new content releases [12][29] - The successful launch of the new IP, Split Fiction, resulted in nearly 4 million units sold, exceeding expectations [13] Market Data and Key Metrics Changes - FC Mobile engagement and acquisition were up over 20% year-over-year, with significant growth in key mobile markets [9] - The company noted that its largest mobile markets differ from its largest HD markets, indicating a successful expansion strategy [9] - The American football ecosystem's engagement trends remained strong, with Q4 average weekly active users higher than the fiscal year average [28] Company Strategy and Development Direction - The company aims to broaden its reach into additional markets and enhance app experiences through strategic partnerships [11] - Future growth is expected to be driven by live services, new game launches, and building global fandom [15][18] - The company plans to transform The Sims into a unified ecosystem across games, marketplaces, and social spaces [18] - The acquisition of TRACECAP is expected to enhance gameplay authenticity and immersion [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate near-term economic uncertainty, emphasizing the resilience of its franchises [39][78] - The company anticipates continued growth in its American football and global football franchises, leveraging the increasing popularity of these sports [20][70] - Management highlighted the importance of community engagement and feedback in shaping future game developments [61] Other Important Information - The company returned over $2.7 billion to stockholders through stock repurchases and dividends in FY 2025 [26] - The upcoming fiscal year is expected to see net bookings of $7.6 billion to $8 billion, reflecting a growth of 3% to 9% year-over-year [30][31] Q&A Session Summary Question: What were the main issues during the temporary slowdown in FC and how were they fixed? - Management noted that temporary slowdowns are not unusual for large franchises and attributed the slowdown to a lack of migration from the previous title and feedback from competitive players regarding gameplay tuning [44][49][54] Question: How does the company view the long-term growth profile and live services? - Management reiterated confidence in the long-term growth framework, emphasizing the importance of live services and new titles in driving growth [55][56] Question: What are the key learnings from the Battlefield beta testing? - Management highlighted the importance of community feedback in shaping the game and ensuring alignment with player expectations, which has been a significant focus for the development team [60][62] Question: How does the company view the competitive landscape for American football? - Management expressed optimism about the growth of American football, citing the increasing engagement and fandom in the sport, and plans to deepen connections between college and NFL products [70][72] Question: How does the company plan to navigate potential macroeconomic challenges? - Management believes that the entertainment industry, particularly its franchises, has shown resilience during economic downturns and expects to continue delivering value to players [78][80]