8-KMaterial Agreements

TAKE TWO INTERACTIVE SOFTWARE INC 8-K Report, Material Agreement (Jul 16, 2020)

Filed July 16, 2020For Securities:TTWO

Summary

Take-Two Interactive Software, Inc. has entered into a new Xbox Console Publisher License Agreement with Microsoft Corporation, effective July 1, 2020. This agreement grants Take-Two the rights to develop, publish, and distribute Xbox-compatible games for both Xbox One and the upcoming Xbox Series X platforms. The initial term of this agreement runs until May 31, 2023, with automatic one-year renewals thereafter, replacing the previous agreement that expired on June 30, 2020. This new agreement is crucial as it secures Take-Two's ability to continue publishing games on the Xbox ecosystem, including for the next-generation console. While the agreement involves fees and royalties paid to Microsoft for physical media, it also outlines revenue sharing for digitally delivered products sold through Microsoft. Microsoft retains approval rights over game concepts, final versions, and marketing materials.

Key Highlights

  • 1New Xbox Console Publisher License Agreement signed with Microsoft, effective July 1, 2020.
  • 2Agreement covers development and distribution rights for Xbox One and Xbox Series X platforms.
  • 3Initial term of the agreement is until May 31, 2023, with automatic renewals.
  • 4Replaces the prior Xbox One Publisher License Agreement which expired June 30, 2020.
  • 5Includes provisions for fees and royalties for physical media manufacturing.
  • 6Outlines revenue sharing for digitally delivered products sold via Microsoft.
  • 7Microsoft has approval rights over game concepts, final versions, packaging, and marketing.

Frequently Asked Questions

This new agreement is significant because it formally secures Take-Two Interactive's ability to publish games on current and future Xbox consoles (Xbox One and Xbox Series X) through May 2023, and potentially beyond due to automatic renewal clauses. It ensures continued access to a major gaming platform for the company's titles.

Yes, the agreement explicitly grants Take-Two the right to develop and publish for the Xbox Series X platform, indicating their preparedness and intent to release games for Microsoft's next-generation console.

The agreement involves Take-Two paying fees and royalties to Microsoft for manufactured physical media. Conversely, Take-Two will benefit from revenue sharing on digital products sold through Microsoft's channels. The net financial impact will depend on the sales mix of physical versus digital titles and the specific royalty rates.

The agreement can be terminated by either party in the event of a material breach or insolvency. Upon termination or expiration, Take-Two retains certain rights to sell off existing inventory.