Business Context and Reporting Period
This Form 8-K was filed by Take-Two Interactive Software, Inc. on July 10, 2020, reporting an event that occurred on the same date. The filing details the entry into a material definitive agreement with Microsoft Corporation.
Key Financial Metrics
This filing is a current report regarding a contractual agreement and does not provide specific financial metrics such as revenue, profit, cash flow, margins, debt, or liquidity figures for the reporting period.
Material Changes and Agreement Details
The primary material change is the execution of an Xbox Console Publisher License Agreement with Microsoft Corporation, effective July 1, 2020. Key terms include:
- Scope: Grants rights to develop, publish, manufacture, market, and sell Xbox-compatible products for Xbox One and Xbox Series X platforms.
- Term: Initial term runs until May 31, 2023, with automatic renewal for successive one-year periods unless terminated by written notice.
- Replacement: This agreement supersedes the previous Xbox One Publisher License Agreement dated October 31, 2013, which expired on June 30, 2020.
- Financial Obligations: Microsoft charges fees and royalties on physical media products. For digital products sold by Microsoft, the Company receives the applicable wholesale price and/or agreed revenue share.
- Approvals: Microsoft retains the right to review and approve game concepts, final versions, packaging, and marketing materials.
- Termination: Either party may terminate for material breach or insolvency. The Company retains rights to sell off existing inventory upon expiration or termination.
Guidance, Outlook, and Risks
The filing does not contain updated financial guidance, management commentary on future performance, or specific risk factors beyond the standard termination clauses inherent in the agreement. The full text of the agreement, which contains the complete legal terms, is scheduled to be filed as an exhibit to the Company's Quarterly Report on Form 10-Q for the period ending September 30, 2020.
Investor Verification Checklist
- Verify the specific royalty rates and fee structures for physical media in the full agreement text (to be filed in the Q3 2020 10-Q).
- Confirm the exact revenue share percentages for digitally delivered products sold via Microsoft.
- Review the specific territories covered under the agreement.
- Monitor the upcoming 10-Q filing for the full exhibit of the agreement.