Game maker Take-Two Interactive says December sales are slow, discloses Icahn stake

Take-Two Interactive Software reported an expected fourth quarter loss that was consistent with its earlier warning that game sales were slow.

Meanwhile, investor Carl Icahn disclosed that he had purchased a stake in the New York-based video game publisher. Take-Two went through a takeover battle last year, when Electronic Arts made a run at the company and then withdrew its bid. With Icahn investing, it’s possible things may heat up again.

The company continued to face a tough sales environment for the fiscal quarter ended Oct. 31. In a conference call, Chairman Strauss Zelnick said the company’s results were obviously disappointing and that the game industry was still suffering from the economic downturn. As for December game sales, Zelnick said the anecdotal evidence suggested “it’s a little slow out there.”

The company was encouraged that the new title Borderlands sold more than 2 million units. That means it will likely become a new franchise that the company can sell over and over again.

One of the problems was that the company’s baseball games didn’t sell well. On top of that, this wasn’t a big year for the release of a Grand Theft Auto game, which sells so many millions of copies that it makes all of Take-Two’s other game franchises look small. And Take-Two had, in the name of ensuring game quality, delayed big titles such as BioShock 2 into 2010.

In the coming year, the BioShock title and three other major games — Mafia II, Max Payne 3, and Red Dead Redemption — could be promising. But delays are always possible. Take-Two warned two weeks ago that its results would be lower than expectations.

Take-Two reported a loss of $22 million, or 28 cents a share, compared with a year-earlier loss of $15 million, or 20 cents a share. After one-time items, earnings per share rose to 9 cents from 2 cents. Revenue was up 6.2 percent from a year ago to $343.4 million, thanks to sales of Borderlands, NBA 2K10, and downloadable content related to Grand Theft Auto.