TAKE-TWO INTERACTIVE SOFTWARE, INC. ANNUAL REPORT 2011 DEAR SHAREHOLDERS, Fiscal year 2011 was truly an outstanding year for Take-Two. Our Company generated substantial revenue growth and profi ts, while at the same time strengthening its foundation for even greater success over the long-term. Both of our labels – Rockstar Games and 2K – are contributing to our success and continuing to deliver the highest quality interactive entertainment experiences that set new standards for creative excellence and innovation. This year, we grew net revenue by 49% to $1.14 billion • Entered into a new partnership with XLGAMES, Inc. and delivered substantial earnings per share. Our strong to develop a massively multiplayer online game earnings converted into even healthier cash fl ow and, as for the Asian market based on one of 2K’s top- a result, we ended the fi scal year with $280 million in selling franchises. cash (nearly double the level of the prior fi scal year-end). We are particularly pleased to achieve profi tability in a • Extended the long-term employment agreements year without a major new release of Grand Theft Auto – with Rockstar Games’ key creative talent. a key objective for our management team since joining Take-Two in 2007. • Entered into a new management agreement with ZelnickMedia, which is subject to stockholder KEY ACCOMPLISHMENTS approval at the Company’s 2011 Annual Meeting. Throughout the past year, we accomplished many key objectives, including: OUR CORE STRATEGY FOR GROWTH Our core strategy is to produce and distribute a select • Launched Red Dead Redemption, one of 2010’s number of triple-A titles, build franchises, and support most celebrated and successful video game titles. them with add-on content, delivered both on disc and This break-out hit has sold-in more than 8.5 million digitally. Since 2007, we have launched 7 new successful units worldwide since its launch in May 2010, and franchises and released 31 titles that have each sold-in established a new franchise for the Company. more than two million units worldwide. This strategy has proven to be highly successful and • Released NBA 2K11, which has sold-in over 5 million enabled us to generate substantial organic growth. To units since its launch in October 2010. The title is illustrate, in fi scal 2009, our non-core Jack of All Games the most successful in both the history of 2K Sports distribution business, which we divested in February and the basketball franchise. 2010, accounted for nearly 30% of our almost $1 billion in revenue. Today, we are generating over $1 billion in annual • Extended 2K Sports’ long-term partnership with revenue without that business, having replaced all of its the National Basketball Association to develop revenue by organically growing our core business. and publish our NBA 2K franchise for an additional We believe that an integral component to our multi-year period. success has been, and will continue to be, our creative team’s ability to produce triple-A titles that set new • Achieved continued profi tability in our standards for innovation and quality; and we have proven sports business. that our more than 1,500 development personnel are the best in the business. • Expanded our Carnival Games franchise, which This year, Take-Two was recognized by Metacritic, has sold-in more than 7 million units worldwide, an infl uential rater of interactive entertainment, as with Carnival Games®: Monkey See, Monkey Do™ – publishing the highest quality games in the industry, our fi rst title for Kinect for Xbox 360®. based on the ratings of our titles released in calendar 2010. Red Dead Redemption received over 160 Game of • Entered into a new partnership with Nexon the Year Awards and is among the top-fi ve highest-rated Corporation to develop and publish an online titles of all time for the Xbox 360® and PlayStation®3, with baseball simulation game for the South an average Metacritic rating of 95. 2K Sports’ stellar NBA Korean market. 2K11 received numerous “sports game of the year” awards TAKE-TWO INTERACTIVE SOFTWARE, INC. ANNUAL REPORT 2011 and was voted “sports game of the decade” by IGN. from the press and consumers, and has sold-in approxi- Our original BioShock title was selected for inclusion mately 4 million units worldwide as of June 2011. in the Smithsonian American Art Museum’s “The Art In June, Duke Nukem made his eagerly anticipated re- of Video Games” exhibit that will be on display in turn as gaming’s most irreverent hero after a decade-long Washington, D.C. in 2012. absence. Throughout the balance of the year, we’ll launch While our ability to consistently garner high scores The Darkness II, which is inspired by the supernatural and accolades is a competitive advantage that helps to comic book series and promises to break from the sea of drive sales and profi ts, we are equally committed to conventional fi rst-person shooters, and XCOM, an intense giving our titles the optimal conditions for success in the sci-fi thriller set in mid-20th century America. We’ll also market. Today, creating a blockbuster hit requires highly release Let’s Cheer!, MLB 2K12, NBA 2K12, Nicktoons MLB, strategic global marketing coordination that leverages and a slate of new Nickelodeon-themed offerings. every form of media. Our marketing teams support our Looking ahead to fi scal 2013, we have a very strong titles with integrated promotions with our key retail pipeline of titles in development, including BioShock partners that turn our launches into tent pole events for Infi nite, the next title in our 8-million unit-selling franchise, their stores and consumers. In addition, our disciplined which is currently in development with the series’ creator, worldwide distribution ensures that our products are on Irrational Games. BioShock Infi nite blew-away E3 shelves and ready to delight consumers when promised. attendees and judges alike this year with an incred- ible demo that won 75 editorial awards, including 39 for INVESTING IN EMERGING OPPORTUNITIES “Game of Show”. In addition, 2K Games is preparing their While packaged goods for the console and PC markets provocative, narrative-driven military shooter, Spec Ops: remain our core business, online gaming and digitally The Line, and Borderlands 2, the next installment in delivered offerings are rapidly expanding and provide the franchise that has sold-in nearly four million exciting opportunities to enhance our growth and units worldwide. profi tability. Our approach to managing our online We believe that many of our upcoming titles are initiatives employs the same focus and dedication to unique and have the potential to become hits for quality as we do with our core console business. Take-Two. To date, Take-Two’s online gaming initiatives have followed one of two paths: partnering with “best-in-class” OUR FUTURE online publishers or prudently investing in internal Four years ago, our management team joined Take-Two development projects. We believe this approach will and shared a singular vision with our colleagues and create signifi cant economic opportunity for our shareholders for what our Company could become: Company while mitigating our risk. In July 2011, 2K • The most creative; Games launched our fi rst social game, Sid Meier’s • The most innovative; and Civilization World, for Facebook. • The most effi cient company in the interactive In Asia, we have announced partnerships with three entertainment industry. of the world’s most successful and highly-acclaimed online developers and publishers. These partnerships are We have been, and remain, sharply focused on that exciting not only because they provide Take-Two with vision. As a result, we have transformed the Company access to a large and growing online market, which is now into a “new” Take-Two – one that is in a better position approaching $9 billion, but also because each represents creatively, fi nancially and geographically than at any a unique collaboration of development teams that are other time in our history. recognized leaders in their respective fi elds. From a product standpoint, we believe that we have These projects are examples of how we are the best creative team and intellectual property in our pursuing emerging growth opportunities by leading industry. From a business standpoint, our solid balance with our content. We will pursue these and other sheet gives us the fl exibility and strength to take the right online initiatives while we continue to execute our core strategic steps to generate growing profi ts and returns strategy of delivering triple-A games for consoles. for our shareholders over the long-term. We’d like to thank our colleagues for their hard EXCITING PIPELINE OF TITLES work and commitment to excellence. We also thank We are incredibly excited about our lineup of titles for our shareholders for their continued support and look fi scal year 2012, which has already gotten off to a promis- forward to reporting our progress in the year ahead. ing start. In May, Rockstar Games launched their highly anticipated L.A. Noire, which has transcended the tradi- Sincerely, tional boundaries of video games by creating an entirely new genre of interactive entertainment. Set in post-World War Two Los Angeles, L.A. Noire is a dark and captivating crime thriller that artistically blends action and detective work within a cinematic fi lm Noire backdrop. The fi rst video game ever to appear at the renowned Tribeca Film Strauss Zelnick Festival, L.A. Noire has generated a fantastic response Chairman and Chief Executive Offi cer TAKE-TWO INTERACTIVE SOFTWARE, INC. ANNUAL REPORT 2011 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K _ Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended March 31, 2011 OR Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission file number 0-29230 TAKE-TWO INTERACTIVE SOFTWARE, INC.