Summary
Take-Two Interactiveis considering the closure of Private Division, according to a new report. Such a move would makeTake-Two Interactive’s business notably less diversified.
Private Division was founded in 2018 as Take-Two Interactive’s indie label. It has published ten games over the following six years, the latest of which arrived in the form of therecently shadow-dropped platformerPenny’s Big Breakaway. The group also funded a number of other projects, including Supergiant’s 2020 hitHades.
Private Division Is Reportedly Dying a Slow Death
But the company is nowadays said to be dying a slow death, with IGN’s Rebekah Valentinereportingthat Private Division has been hit particularly hard by its parent’s ongoing cost-cutting efforts, citing sources close to the conglomerate. The cost reduction initiative made the headlines in early May 2024, when Bloomberg obtained documentation suggesting that Private Division’s studios Roll7 and Intercept Games are facing closure. AlthoughTake-Two promptly asserted that neither company had been shut down, Valentine has now characterized that statement as only technically correct, with her sources claiming that Roll7 will cease to exist on June 28. Intercept Games is also understood to be in the process of shutting down as of late May.
Take-Two Rumored to be Shopping For a Private Division Buyer
The newly emerged report dovetails with the recentannouncement of mass layoffs at Intercept Games. The purported closures of both Intercept and Roll7 are said to be part of a wider initiative that would see Take-Two effectively exit indie publishing. The entire Private Division is hence facing the chopping block, although Valentine’s report states that the company’s fate isn’t yet set in stone. Specifically, Take-Two is currently said to be exploring the possibility of selling its subsidiary, having supposedly already found some interest from an unnamed private equity firm. The current stage of these purported sale talks is unclear.
Looking at the big picture, Take-Two may want to divest itself from indie publishing in order to focus on its more profitable ventures. Those would be mobile games and Rockstar titles, in that order. According to the company’s consolidated financial report for the third quarter of its fiscal year 2024, half of its quarterly revenue currently comes from mobile games. Many of those are made by Zynga, which Take-Two acquired to the tune of $12.7 billion in May 2022.
TheGTApublisher, for its part, officially framed its ongoing cost-cutting efforts as a response to the industry-wide issue of declining revenue growth. To that end,Take-Two has already laid off hundreds of people and canceled some games, stating that it’s aiming to save approximately $165 million in annual expenditures. Shuttering or selling Private Division, which presently directly employs around 100 people across four offices, would align with those goals, which have been widely criticized by online gaming communities.
