Take-Two Interactive Annual Report 2020

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FY2020 Annual Report · Take-Two Interactive

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TAKE-TWO INTERACTIVE SOFTWARE, INC.
2020 ANNUAL REPORT

Generated signiﬁcant cash ﬂow and ended the year with

$2.00 BILLION

in cash and short-term investments

Delivered record Net Bookings of

$2.99 BILLION

exceeded original FY20 outlook by nearly 20%

10 MILLION

units
sold-in
to date

Up over 50% over Borderlands 2 in the same period

Net Bookings from recurrent
consumer spending grew

to a new record
and accounted for

34%
51%

of total Net Bookings

One of the most critically-acclaimed and commercially
successful video games of all time with over

130 MILLION

units
sold-in
to date

4,300

Developers working in
game development and
23 studios around the world

Sold-in over 12 million units and expect lifetime units,
recurrent consumer spending and Net Bookings to be
the highest ever for a 2K sports title

Digitally-delivered
Net Bookings grew

35%
82%

to a new record
and accounted for

of total Net Bookings

TAKE-TWO INTERACTIVE SOFTWARE, INC. 2020 ANNUAL REPORT

DEAR
SHAREHOLDERS,

Fiscal 2020 was another extraordinary year for Take-Two, during which we achieved
numerous milestones, including record Net Bookings of nearly $3 billion, as well as
record digitally-delivered Net Bookings, Net Bookings from recurrent consumer spending
and earnings. Our stellar results were driven by the outstanding performance of NBA
2K20 and NBA 2K19, Grand Theft Auto Online and Grand Theft Auto V, Borderlands 3,
Red Dead Redemption 2 and Red Dead Online, The Outer Worlds, WWE 2K20, WWE
SuperCard and WWE 2K19, Social Point’s mobile games and Sid Meier’s Civilization VI.
Net revenue grew 16% to $3.09 billion and Net Bookings grew to $2.99 billion. As of
March 31, 2020, we had $2.00 billion in cash and short-term investments.

OUR KEY ACHIEVEMENTS

(cid:81) We delivered record digitally-delivered net revenue and Net Bookings. Digitally-delivered net

revenue grew 41% to $2.38 billion and digitally-delivered Net Bookings grew 35% to $2.44 billion.

(cid:81) We generated record net revenue and Net Bookings from recurrent consumer spending. Recurrent

consumer spending accounted for 45% of total net revenue and 51% of total Net Bookings.

(cid:81) We released NBA 2K20, which we expect to generate the highest lifetime units, recurrent consumer

spending and Net Bookings ever for a 2K sports title. Our industry-leading basketball series
continues to expand its audience and underscores that NBA 2K remains the perennial favorite
among both basketball and pop-culture fans. In addition, The NPD Group noted that NBA 2K20’s
launch month sales were the highest for any sports game in history, and the NBA 2K series is now
the 6th largest video game franchise based on tracked full-game dollar sales. To date, NBA 2K20
has sold-in over 12 million units, up 33% over NBA 2K19 in the same period. For the full year,
and
K
recurrent consumer spending on the NBA 2K franchise grew nearly 30% to a new record
remained the largest contributor to that part of our business. Consumer engagement with
NBA 2K was at record levels throughout ﬁscal 2020 with Daily Active Users growing 13%
and MyTEAM users increasing nearly 50%.

(cid:81) Nearly seven years after their launch, Grand Theft Auto V and

Grand Theft Auto Online continued
to be signiﬁcant contributors to our results. Grand Theft Auto V has sold-in over 130 million units
cementing further its standing as the “must-have” title of the current console generation. The positive
momentum for Grand Theft Auto Online continues, with superlative performance in both players and
Net Bookings. Since the July 2019 launch of The Diamond Casino & Resort update,
Online achieved its best ever Monthly Active Users in both July and August 2019, and then grew
sequentially each month from December 2019 through March 2020. This exceptional engagement
helped to drive record recurrent consumer spending, which grew 40% for the full ﬁscal year.

Grand Theft Auto

(cid:81) We released Borderlands 3, the latest installment in our genre-deﬁning shooter-looter series. The
2
. The Season
and there is more content coming.

title has sold-in over 10 million units, up 50% over Borderlands 2 in the same period
Pass attach rate for Borderlands 3 is the highest in 2K’s history
Borderlands 3’s Monthly Active Users steadily climbed in each month during the fourth quarter

of ﬁscal 2020 and, in March, had the largest inﬂux of new players since launch due to its release
on Steam. We attribute this success in part to 2K’s and Gearbox Software’s continued efforts to
support Borderlands 3 as a live service game
3
communication with fans that should continue to beneﬁt the title and series over the long-term.

, with weekly events, free content drops, and consistent

(cid:81) To date, Red Dead Redemption 2 has sold-in more than 31 million units worldwide

. The title remains
tied with Grand Theft Auto V as the highest-rated game on PlayStation 4 and Xbox One, with a 97
Metacritic score. Red Dead Online exited the Beta period on May 14, 2019 and was supported with
an array of additional content throughout the year that drove momentum in both engagement and
recurrent consumer spending. Net Bookings more than tripled for the full ﬁscal year, excluding
digital content bundled with the Red Dead Redemption 2 premium editions. Throughout the coming
year, Rockstar Games will continue to support both Red Dead Online and Grand Theft Auto Online
with more content updates to keep new and returning players excited and engaged.

(cid:81) Our Private Division label launched their most successful release to date with The Outer Worlds.

The title has signiﬁcantly exceeded our expectations with more than 2.5 million units sold-in to date.
The Outer Worlds is a perfect example of how Private Division can complement our core portfolio
selectively and contribute meaningful results to our bottom line.

(cid:81) We announced, together with The National Football League (NFL), a multi-year partnership

encompassing multiple future video games. The partnership marks the return of football-themed
games to 2K’s stable of notable sports titles and original IP, as well as an expansion of video game
properties for the NFL. The games will be non-simulation football experiences, which will launch
starting in calendar year 2021, during ﬁscal 2022.

(cid:81) We announced WWE 2K Battlegrounds, a completely new gaming experience that will feature

arcade-style action and over-the-top Superstar designs, environments and moves. In conjunction
with this announcement, we said that we are extending the production timeline and will not be
releasing a WWE 2K simulation game in ﬁscal 2021.

(cid:81) We announced that 2K Silicon Valley, the label’s wholly-owned development studio founded in

February 2019 and led by video game industry veteran Michael Condrey, will ofﬁcially be known
as 31st Union. Condrey is best known for co-founding Sledgehammer Games and leading development
for the renowned Call of Duty franchise. Condrey also served as Chief Operating Ofﬁcer and Director
at Visceral Games, which established the popular Dead Space franchise. The studio is currently
working on an unnamed project and plans to expand its presence internationally, beginning with a
new studio located in Spain.

(cid:81) We announced the founding of Cloud Chamber, the newest wholly-owned game development

studio under our 2K label. Cloud Chamber will build its team at two locations: 2K’s San Francisco
Bay Area headquarters in Novato, California, as well as in Montréal, Québec, which marks the ﬁrst-
ever Canada-based 2K studio. Cloud Chamber has started work on the next iteration of our globally
acclaimed BioShock franchise, which will be in development for the next several years

(cid:81) We announced the formation of Intercept Games, the ﬁrst wholly-owned game development

studio under the Private Division publishing label. The Seattle-based studio is currently working
on Kerbal Space Program 2, the next iteration of the popular space simulation franchise that is
expected to launch in Fall 2021.

(cid:81) Social Point remained a meaningful contributor to our results through its two biggest mobile titles,

Monster Legends, as well as Tasty Town and World Chef. During ﬁscal 2020, our

Dragon City and
Barcelona-based studio launched Word Life, a new game within the popular crossword puzzle
category. Social Point is hard at work on its exciting development pipeline, including more than
10 new games planned for launch in the coming years.

(cid:3)

TAKE-TWO INTERACTIVE SOFTWARE, INC. 2020 ANNUAL REPORT

OUR RESPONSES TO COVID-19 AND RACIAL INJUSTICE

At Take-Two, our number one priority is the health and safety of our employees and their families. All of
our ofﬁces moved largely to work-from-home environments by mid-March. We are continuing to ﬁnd
ways to support our employees and their families as we navigate through this unprecedented situation.
The digital nature of our content means our creative talent can continue to work on game development
from home. The shift to remote working adds complexity and challenges in some areas of the game
development process; however, based on our work to date, we currently do not expect any delays other
than what has been announced.

There is no doubt that our recent results have beneﬁted from people sheltering at home, as players have
sought interactive entertainment to stay connected and engaged with friends and family. The connections
and communities built will remain in place once people resume their normal activities and should continue
to beneﬁt our industry’s results. We are fortunate to work in an industry that can bring some positivity in
a difﬁcult time.

For the months of April and May 2020, our labels came together to donate 5% of Net Bookings (after
platform fees) from in-game purchases from Grand Theft Auto Online and Red Dead Online from Rockstar
Games, NBA 2K20 and NBA 2K19 from 2K Games, Dragon City from Social Point, as well as from full-game
digital sales of The Outer Worlds from Private Division, to support an array of COVID-19 charities and local
businesses in need. As a result of this effort, we proudly raised over $10 million and provided support to more
than 170 organizations throughout the world, including Covenant House, Doctors Without Borders/Médecins
Sans Frontières (MSF), Feeding America, International Medical Corps, Robin Hood, and Save the Children
to name a few. Our efforts supported food banks, shelters and ﬁrst responders; provided healthcare workers
and hospitals with protective equipment; funded research for a COVID-19 vaccine; provided relief funds for
small businesses in the regions where we operate; and endowed numerous industry-related organizations to
deliver essential in-home STEM education and game design programs for students.

On June 4, 2020, our labels Rockstar Games, 2K and Social Point, shut down access to their online games,
Grand Theft Auto Online, Red Dead Online, NBA 2K,KK Dragon City and
Monster Legends to honor the legacy
of George Floyd and to observe his memorial service. In addition, our Private Division label suspended their
activities during that time. Take-Two ﬁrmly believes that racism and the violence that it incites cannot be
tolerated. We are committed to supporting efforts to eradicate racial injustice and we stand in solidarity with
the Black community against this systemic issue that causes conﬂict and division in our society. To that end,
we have made signiﬁcant donations to organizations that are combating these important issues, including
Lawyers Committee for Civil Rights Under Law, NAACP Legal Defense and Educational Fund, Inc., and
Southern Poverty Law Center, and we have also matched our employees’ donations to related causes.

SUCCESSFUL GROWTH STRATEGY

Take-Two’s strategy is to develop the highest-quality, most compelling interactive entertainment franchises
in the business, and deliver them on every platform around the world that is relevant to our audience.
Complementing our core business with offerings that drive ongoing engagement with, and recurrent
consumer spending on (including virtual currency, in-game purchases and add-on content), our titles after
their initial purchase is an important, high-margin growth opportunity and, therefore, a key strategic priority
of our organization. We now support virtually all of our new releases with innovative offerings designed to
achieve this objective. Recurrent consumer spending also helps to strengthen our results between front-line
releases while providing long-term value to our consumers and extends the lives of our products.

(cid:81) World-class creative teams: Creativity and innovation remain the core tenets of our organization
and are the lifeblood for our ongoing success. We have over 4,300 employees working in game
development in 23 studios around the world, including some of the most talented visionaries in the

business. We provide them with the resources and time that they need to create groundbreaking
entertainment experiences. We support and encourage our creative teams to pursue their passions, which
we believe results in them delivering the best products. Whether expanding beloved franchises, launching
new intellectual property, or providing innovative ways for audiences to remain captivated and engaged,
we have an unwavering commitment to producing the highest-quality entertainment experiences.

(cid:81) Diverse portfolio of industry-leading intellectual property: Take-Two is a ﬁnancially strong, global

interactive entertainment enterprise with numerous successful franchises encompassing a variety of
genres. Our diverse portfolio of intellectual property includes 11 series with at least one ﬁve-million unit
selling release, and 66 individual, multi-million unit selling titles.

(cid:81) Capitalizing on growth of digital distribution: During ﬁscal 2020, we continued to capitalize on our

industry’s ongoing transition towards digital distribution and delivered both record digitally-delivered
net revenue and Net Bookings, including our highest-ever from recurrent consumer spending. In
addition to virtual currency for NBA 2K, KK Grand Theft Auto Online and Red Dead Online, recurrent
consumer spending was enhanced by a variety of offerings. These included free-to-play games led by
Social Point’s mobile titles; WWE SuperCard, which has now been downloaded more than 20 million
times and is 2K’s highest-grossing mobile game; and NBA 2K Online in China, which grew 25% and
remains the #1 online PC sports game in China with 49 million registered users. In addition, add-on
content grew 85% in ﬁscal 2020, led by offerings for the Borderlands franchise, Sid Meier’s Civilization VI,
and WWE 2K20. Our digitally-delivered results also beneﬁted from growth in full-game downloads, with
more than 55% of units for current-generation consoles and more than 99% of units for PC delivered
digitally. Moreover, 60% of our catalog sales for old-generation consoles are being delivered through
digital download. Over the long-term, we expect the trend towards digital distribution to continue.

(cid:81) Actively investing in emerging opportunities: Interactive entertainment is one of today’s most

dynamic and popular art forms. We are investing heavily in opportunities to expand our creative teams
and grow our scale; increase our presence in mobile; and explore emerging distribution channels
and business models, such as streaming, subscription and free-to-play. We will continue to focus on
delivering the highest-quality interactive entertainment, and to seek new and innovative ways both to
enhance players’ experience with our games and drive long-term engagement. The execution of this
strategy will provide value to our customers and generate growth and proﬁts over the long-term.

• Mobile – Our acquisition of Social Point expanded our presence in the free-to-play mobile
market, which is the largest and fastest-growing segment within our industry. We believe
that Social Point is a perfect complement to our business because it produces high-quality
entertainment that can attract and retain a loyal, highly-engaged player base and deliver
sustainable results. Social Point has a number of exciting titles planned for launch in the
coming years, and we continue to view mobile games as an important growth opportunity
for Take-Two.

• eSports – We are very pleased with the ongoing progress of the NBA 2K League – our joint-
venture with the NBA that marked the ﬁrst competitive gaming league jointly owned by a
major professional sports league. The NBA 2K League had its inaugural season starting in
May 2018 and, in May 2020, it kicked off its third season with 23 teams participating, up from
21 during the prior year. The League has been steadily building its portfolio of high-proﬁle
partnerships and sponsorships, including Anheuser-Busch, AT&T, Champion Athleticwear,
GameStop, HyperX, Jostens, Panera Bread, Raynor Gaming, SAP, Scuf Gaming, Snickers, Stance
and Tissot. In addition, the NBA 2K League airs live on ESPN, ESPN’s digital platforms, Sportsnet
(Canada), Twitch and YouTube, and on delay on eGG Network (Southeast Asia). We are very
excited about the continued success and growth of the NBA 2K League, which has the
long-term potential to enhance engagement, and to be a driver of proﬁts for our Company.

TAKE-TWO INTERACTIVE SOFTWARE, INC. 2020 ANNUAL REPORT

• Geographic Expansion – Asia represents an important long-term growth opportunity for our
organization. During ﬁscal 2020, Asia represented approximately 8% of our Net Bookings.
In addition to NBA 2K Online and NBA 2K Online 2, we are planning to expand our successful
partnership with Tencent through the release of Kerbal Space Program on Tencent’s WeGame
distribution platform as a premium PC game. We are excited about Tencent’s WeGame
platform and the opportunity to grow our business in China and other emerging markets.

(cid:81) Innovative marketing and global distribution: Creating groundbreaking entertainment experiences is
only part of our formula for success. Our marketing teams execute well-coordinated global campaigns
that leverage nearly every form of media – from traditional to social – to turn our product launches
into tent pole events. We also work in lockstep with our key retail partners, both brick-and-mortar
and online, to create promotions that drive consumers to the point of sale. Our global distribution
network ensures that our products are available to consumers throughout the world, both physically
and digitally – wherever and whenever they desire. In addition, we are making signiﬁcant investments
in performance marketing and data analytics to measure the effectiveness of our campaigns, identify
additional revenue opportunities, and deliver increased value to our organization.

(cid:81) Sound ﬁnancial foundation: With $2.00 billion in cash and short-term investments as of March 31,
2020, Take-Two has ample capital to pursue a variety of investment opportunities. We are very
excited about our growth potential over the long-term, and our strong cash position and outlook
give us the ﬂexibility both to invest in organic growth opportunities, as well as potential studio or
IP acquisitions and strategic partnerships. We also have the ability to return capital to shareholders,
including through opportunistic share repurchases.

EXCITING LINEUP OF NEW RELEASES

While ﬁscal 2021 will be a light year for new releases, we expect to deliver strong results, due to the diversity
and strength of our catalog and live service offerings. The transition to a new console cycle is always a very
exciting time for our industry, and our development teams are already taking their creative aspirations to a
new level by ﬁnding ways to push the limits of this new technology. However, the speed of these transitions
can be unpredictable, particularly in a year upended by COVID-19, and our ﬁscal 2021 release slate reﬂects our
strategy to bring our creative achievements to the largest possible audience. Our commitment to deliver the
highest-quality titles and give them optimal conditions to achieve success remains resolute.

(cid:81) On August 21, 2K will release PGA Tour 2K21 for PlayStation 4, Xbox One, Nintendo Switch, PC and
Stadia. Developed by HB Studios, PGA Tour 2K21 will feature PGA Tour professional Justin Thomas
1
on the cover; ofﬁcially licensed pro players, courses and gear; realistic course scanning; play-by-play
commentary by Luke Elvy and Rich Beem; a new PGA TOUR Career Mode; online and local
multiplayer; course and player customization; and online societies.

(cid:81) On September 4, 2K will release the next annual offering from our ﬂagship NBA 2K series for

PlayStation 4, Xbox One, Nintendo Switch, PC and Stadia. With extensive improvements; best-in-class
graphics and gameplay; competitive and community online features; and deep, varied game modes,
NBA 2K21 will offer a one-of-a-kind immersion into all facets of NBA basketball and culture – where
Everything is Game. NBA 2K21 will launch this holiday season for next-generation platforms and will
provide unparalleled graphics and nearly unrecognizable loading speeds of less than two seconds,
once again redeﬁning the standard for sports simulations. Five-time NBA All-Star and Portland Trail
Blazers’ standout Damian Lillard will be on the cover for the current-generation versions of NBA 2K21;
and the 2019 1st Overall Pick, consensus 2019 National College Player of the Year and New Orleans
Pelicans’ Zion Williamson will be on the cover for the PlayStation 5 and Xbox Series X releases.
NBA 2K21 will introduce several initiatives to bridge the two console generations of the game,

including MyTEAM Cross-Progression and a Shared VC Wallet within the same console families. In
addition, NBA legend Kobe Bryant’s lifetime achievement of basketball excellence will be celebrated
with the NBA 2K21 Mamba Forever Edition, which will provide players with seamless access to both
current and next-generation versions of the game.

(cid:81) On September 18, 2K will release WWE 2K Battlegrounds, a completely new WWE gaming experience

that will feature arcade-style brawling action, over-the-top Superstar designs, environments and
moves, and a focus on social pick-up-and-play fun.

(cid:81) On September 25, 2K will release Maﬁa I as the ﬁnal piece in their

Maﬁa Trilogy collection that

features all three previously released Maﬁa titles included in a single package curated by 2K’s Hangar
13 development studio. For this collection, Maﬁa I is being completely remade from the ground up,
I
including new technology, voice acting, game mechanics, and more.

(cid:81) Throughout ﬁscal 2021, we will continue to support our titles with innovative post-launch content that
drives engagement and recurrent consumer spending, including an array of content and gameplay
experiences for the vast open worlds of Grand Theft Auto Online and Red Dead Online. In addition,
Social Point and 2K will continue to broaden our offerings for mobile devices.

Looking ahead, our Company has the strongest development pipeline in its history, including sequels from
our biggest franchises, as well as exciting new IP. Given our robust lineup of future releases and expectation
for increasing recurrent consumer spending, we expect sequential growth to resume in ﬁscal 2022.

OUR FUTURE

As we close a record year, we remain extremely proud that Take-Two remains the home for our industry’s
most creative and passionate talent. Their vision and ability to captivate audiences – including incredible
standalone entertainment experiences and live services that engage communities around the world – both
redeﬁnes the possibilities of interactive entertainment and forms the foundation for our continued success.

We are incredibly excited about the many opportunities for our Company. Whether capitalizing on new
platforms, embracing new business models and distribution channels, and expanding further into emerging
markets, Take-Two is exceedingly well-positioned to generate value to consumers, as well as growth and
margin expansion for our shareholders over the long-term.

We would like to thank our colleagues for delivering another outstanding year for our organization. To our
shareholders, we want to express our appreciation for your continued support.

Sincerely,

Strauss Zelnick
Chairman and Chief Executive Ofﬁcer

K l Sl t ff
Karl Slatoff
President

July 17, 2020

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, 2020

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from

Commission file number 001-34003
TAKE-TWO INTERACTIVE SOFTWARE, INC.

(Exact name of registrant as specified in its charter)

Delaware
(State or Other Jurisdiction of
Incorporation or Organization)

110 West 44th Street
New York, New York
(Address of principal executive offices)

51-0350842
(I.R.S. Employer
Identification No.)

10036
(Zip Code)

Registrant's Telephone Number, Including Area Code: (646) 536-2842

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol

Name of each exchange on which registered

Common Stock, $.01 par value

TTWO

NASDAQ Global Select Market

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ý No o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No ý

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
to such filing requirements for the past
12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject
90 days. Yes ý No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T
(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the
Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ý

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth
company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange
Act. (Check one):

Large accelerated filer ý

Accelerated filer o

Non-accelerated filer o

Smaller reporting
company ☐

Emerging growth
company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ý

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold,
or the average bid and asked price of such common equity, as of the last business day of the Registrant's most recently completed second fiscal quarter was approximately
$13,938,279,654.

As of May 7, 2020, there were 113,942,760 shares of the Registrant's Common Stock outstanding, net of treasury stock.

Documents Incorporated by Reference:
Portions of the registrant's definitive proxy statement for the 2020 Annual Meeting of Stockholders
are incorporated by reference into Part III herein.

INDEX

PART I

PART II

Item 1.

Business

Item 1A.

Risk Factors

Item 1B.

Unresolved Staff Comments

Properties

Legal Proceedings

Mine Safety Disclosures

Item 2.

Item 3.

Item 4.

Item 5.

Item 6.

Item 7.

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Selected Financial Data

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

Item 8.

Item 9.

Financial Statements and Supplementary Data

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Item 9A.

Controls and Procedures

Item 9B.

Other Information

Item 10.

Item 11.

Item 12.

Item 13.

Item 14.

Item 15.

Item 16.

Directors, Executive Officers and Corporate Governance

Executive Compensation

PART III

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Certain Relationships and Related Transactions, and Director Independence

Principal Accounting Fees and Services

PART IV

Exhibits, Financial Statement Schedules

Form 10-K Summary

Index to Financial Statements

Signatures

PAGE

24
26

40
40

CAUTIONARY NOTE ABOUT FORWARD-LOOKING STATEMENTS

The statements contained herein which are not historical facts are considered forward-looking statements under
federal securities laws and may be identified by words such as "anticipates," "believes," "estimates," "expects," "intends,"
"plans," "potential," "predicts," "projects," "seeks," "should," "will," or words of similar meaning and include, but are not
limited to, statements regarding the outlook for Take-Two Interactive Software, Inc.'s ("Take-Two," the "Company," "we," "us,"
or similar pronouns) future business and financial performance. Such forward-looking statements are based on the current
beliefs of our management as well as assumptions made by and information currently available to them, which are subject to
inherent uncertainties, risks, and changes in circumstances that are difficult to predict. Actual outcomes and results may vary
materially from these forward-looking statements based on a variety of risks and uncertainties including the uncertainty of the
impact of the COVID-19 pandemic and measures taken in response thereto; the effect that measures taken to mitigate the
COVID-19 pandemic have on our operations, including our ability to timely deliver our titles and other products, and on the
operations of our counterparties, including retailers, including digital storefronts and platform partners, and distributors; the
effects of the COVID-19 pandemic on consumer demand and the discretionary spending patterns of our customers; the impact
of reductions in interest rates by the Federal Reserve and other central banks, including on our short-term investment portfolio;
the impact of potential inflation; volatility in foreign currency exchange rates; as well as, but not limited to, the risks and
uncertainties discussed under the heading "Risk Factors" included in Part I, Item 1A herein. All forward-looking statements are
qualified by these cautionary statements and speak only as of the date they are made. The Company undertakes no obligation to
update any forward-looking statement, whether as a result of new information, future events or otherwise.

PART I

Item 1. Business

General

We are a leading developer, publisher and marketer of interactive entertainment for consumers around the globe. We
develop and publish products principally through Rockstar Games, 2K, Private Division, and Social Point. Our products are
currently designed for console gaming systems, such as the Sony Computer Entertainment, Inc. ("Sony") PlayStation®4
("PS4"), Microsoft Corporation ("Microsoft") Xbox One® ("Xbox One"), and Nintendo's SwitchTM ("Switch"), and personal
computers ("PC"), including smartphones and tablets. We deliver our products through physical retail, digital download, online
platforms, and cloud streaming services.

We were incorporated under the laws of the State of Delaware in 1993 and are headquartered in New York, New York
with approximately 5,800 employees globally. Our website address is www.take2games.com. We make all of our filings with
the Securities and Exchange Commission ("SEC") available free of charge on our website under the caption "Corporate—SEC
Filings." Included in these filings are our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on
Form 8-K and amendments to those reports, which are available as soon as reasonably practicable after we electronically file or
furnish such materials with the SEC pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934.

Our website and the information contained therein or connected thereto are not intended to be incorporated into this

Annual Report on Form 10-K.

The SEC maintains a website that contains annual, quarterly and current reports, proxy and information statements and

other information that issuers (including the Company) file electronically with the SEC. The SEC's website is www.sec.gov.

Strategy

Overview. We endeavor to be the most creative, innovative and efficient company in our industry. Our core strategy
is to capitalize on the popularity of video games by developing and publishing high-quality interactive entertainment
experiences across a range of genres. We focus on building compelling entertainment franchises by publishing a select number
of titles for which we can create sequels and incremental revenue opportunities through virtual currency, add-on content, and
in-game purchases. Most of our intellectual property is internally owned and developed, which we believe best positions us
financially and competitively. We have established a portfolio of proprietary software content for the major hardware platforms
in a wide range of genres, including action, adventure, family/casual, racing, role-playing, shooter, sports and strategy, which
we distribute worldwide. We believe that our commitment to creativity and innovation is a distinguishing strength, enabling us
to differentiate our products in the marketplace by combining advanced technology with compelling storylines and characters
that provide unique gameplay experiences for consumers. We have created, acquired or licensed a group of highly recognizable
brands to match the broad consumer demographics that we serve, ranging from adults to children and game enthusiasts to
casual gamers. Another cornerstone of our strategy is to support the success of our products in the marketplace through

innovative marketing programs and global distribution on platforms and through channels that are relevant to our target
audience.

Support World-Class Creative Teams. Creativity and innovation remain the core tenets of our organization and are
the lifeblood of our ongoing success. We have 4,488 employees working in game development in studios around the world,
including some of the most well-known names in the business. The creative teams at Rockstar Games and 2K are renowned for
their consistent ability to deliver games that set new benchmarks for excellence. In addition, Private Division is dedicated to
bringing titles from top independent developers to market, and Social Point further enhances our development capabilities with
a track record of producing multiple hits in the free-to-play mobile sector. Whether expanding our portfolio of franchises,
launching new intellectual property, or providing innovative ways for audiences to remain captivated and engaged, we prioritize
producing the highest quality entertainment experiences. We support our teams by focusing on talent retention and acquisition,
and our label structure enables us to target distinct market segments and opportunities.

Focus on Core Strength of Producing High Quality Titles. We focus on publishing a select number of high-quality
titles based on internally owned and developed intellectual properties. We currently own the intellectual property rights to 26
proprietary brands. In addition, we selectively develop titles based on licensed properties, including sports, and also publish
externally developed titles.

We use a product investment review process to evaluate potential titles for investment, to review existing titles in
development, and to assess titles after release to measure their performance in the market and the return on our investment. We
apply this process to all of our products, whether internally or externally developed. The product investment review process
includes reviews of each project at various stages of development by our executive management team and the senior
management of our publishing labels and includes coordination between our sales and marketing personnel before the launch of
titles. This disciplined approach to product investment is expected to enhance the competitiveness and profitability of our titles.

We develop our products using a combination of our internal development teams and external development resources
acting under contract with us. We typically select external developers based on their track record and expertise in developing
products in the same category or genre. One developer will generally produce the same game for multiple platforms and will
also produce sequels to the original game. We believe that selecting and using development resources in this manner allows us
to leverage the particular expertise of our internal and external development resources, which is designed to maintain our
quality standards for our products.

Leverage Emerging Technologies, Platforms, and Distribution Channels,

Including Digitally Delivered
Content.
Interactive entertainment played online and on mobile platforms, including tablets and smartphones, presents
opportunities to enhance our growth and profitability. In addition, the interactive entertainment software industry is delivering a
growing amount of content for traditional platforms through digital download. We provide a variety of digitally delivered
products and offerings, which typically have a higher gross margin than physically delivered products. Virtually all of our titles
that are available through retailers as packaged goods products are also available through direct digital download (from
websites we own or third-party websites). We aim to drive ongoing engagement and incremental revenue from recurrent
consumer spending on our titles through virtual currency, add-on content, and in-game purchases. We also publish an
expanding variety of titles for tablets and smartphones, which are delivered to consumers through digital download. We will
continue to invest in emerging opportunities in mobile and online gameplay, particularly for our wholly-owned franchises, as
well as downloadable content and microtransactions that enable gamers to pay to download additional content to enhance their
game playing experience.

Expand International Business. The global market for interactive entertainment continues to grow, and we seek to
increase our presence internationally, particularly in Asia, the Middle East, and Latin America. We are continuing to execute on
our growth initiatives in Asia, where our strategy is to broaden the distribution of our existing products and expand our online
gaming presence, especially in China and South Korea. We are a direct publisher in Japan and South Korea. While we retain
title to all intellectual property, in some regions, local publishers, under license agreements, are responsible for localization of
software content, distribution, and marketing of the products in their respective local markets. We intend to continue to build on
our licensing relationships and also continue to expand on distribution strategies to grow our international business.

Our Businesses

Our revenue is primarily derived from the sale of internally developed software titles and software titles developed by
third parties. Operating margins are dependent in part upon our ability to release new, commercially successful software
products and to manage effectively their development and marketing costs. We have internal development studios located in
Australia, Canada, China, Czech Republic, Hungary, India, Spain, the United Kingdom, and the United States. As of March 31,
2020, we had a research and development staff of 4,488 employees with the technical capabilities to develop software titles for
all major consoles, PCs, and mobile platforms in multiple languages and territories.

Agreements with third-party developers generally give us exclusive publishing and marketing rights and require us to
make development payments, pay royalties based on product sales, and satisfy other conditions. Development payments for
software titles are typically recoupable against royalties otherwise due to developers based on software sales. Our agreements
to monitor development efforts and to cease making
with third-party developers generally provide us with the right
development payments if specified development milestones are not satisfied. We also regularly monitor the level of
development payments in light of the expected sales for the related titles.

We continue to engage in evolving business models such as online gaming, virtual currency, add-on content, and in-

game purchases, and we expect to continue to generate incremental revenue from these opportunities.

Rockstar Games.

Software titles published by our Rockstar Games label are primarily internally developed. We
expect Rockstar Games, our wholly-owned publisher of the Grand Theft Auto, Max Payne, Midnight Club, Red Dead
Redemption, and other popular franchises, to continue to be a leader in the action/adventure product category and to create
groundbreaking entertainment. We believe that Rockstar Games has established a uniquely original, popular cultural
phenomenon with its Grand Theft Auto series, which is the interactive entertainment industry's most iconic and critically
acclaimed brand and has sold-in over 320 million units worldwide. The latest installment, Grand Theft Auto V, has sold-in over
125 million units worldwide and includes access to Grand Theft Auto Online. On October 26, 2018, Rockstar Games launched
Red Dead Redemption 2, which has been a critical and commercial success that set numerous entertainment industry records.
To date, Red Dead Redemption 2 has sold-in more than 30 million units worldwide. Rockstar Games is also well known for
developing brands in other genres, including the LA Noire, Bully, and Manhunt franchises. Rockstar Games continues to expand
on our established franchises by developing sequels, offering downloadable episodes, content, and virtual currency.

2K. Our 2K label has published a variety of popular entertainment properties across all key platforms and across a
range of genres including shooter, action, role-playing, strategy, sports and family/casual entertainment. We expect 2K to
continue to develop new, successful franchises in the future. 2K's internally owned and developed franchises include the
critically acclaimed, multi-million unit selling BioShock, Mafia, Sid Meier's Civilization, and XCOM series. 2K also publishes
externally developed franchises such as Borderlands. The latest installment, Borderlands 3, launched on September 13, 2019.
2K's realistic sports simulation titles include our flagship NBA 2K series, which continues to be the top-ranked NBA basketball
video game, the WWE 2K professional wrestling series, and PGA Tour 2K. In March 2020, 2K announced a multi-year
partnership with the National Football League encompassing multiple future video games that will be non-simulation football
game experiences and will launch starting in fiscal year 2022.

Private Division.

Our Private Division label is dedicated to bringing titles from top independent developers to
market and is the publisher and owner of Kerbal Space Program. During fiscal year 2020, Private Division released The Outer
Worlds and Ancestors: The Humankind Odyssey, based on new IP from renowned industry creative talent. Additionally, Private
Division has announced that Disintegration is planned for release in fiscal year 2021 and Kerbal Space Program 2 in fiscal year
2022.

Social Point.

Social Point develops and publishes popular free-to-play mobile games that deliver high quality,
deeply-engaging entertainment experiences, including its two most successful games, Dragon City and Monster Legends. In
addition, Social Point has a robust development pipeline with a number of exciting games planned for launch in the coming
years.

We are continuing to execute on our growth initiatives in Asia, where our strategy is to broaden the distribution of our
existing products and establish an online gaming presence, especially in China and South Korea. 2K has secured a multi-year
license from the NBA to develop an online version of our NBA simulation game in China, Taiwan, South Korea and Southeast
Asia. NBA 2K Online, our free-to-play NBA simulation game, that is based on the console edition of NBA 2K, which was co-
developed by 2K and Tencent, is the top online PC sports game in China with over 49 million registered users. We have
released two iterations of NBA 2K Online and continue to enhance the title with new features.

We have expanded our relationship with the NBA through the creation of the NBA 2K League. Launched in May
2018, this groundbreaking competitive gaming league is jointly owned by us and the NBA and consists of teams operated by
actual NBA franchises. The NBA 2K League follows a professional sports league format: head-to-head competition throughout
a regular season followed by a bracketed playoff system and a finals match-up that was held in August in each of the NBA 2K
League's first two seasons.

Intellectual Property

Our business is highly dependent on the creation, acquisition, licensing and protection of intellectual property. The
intellectual property rights we have created or acquired for our internally-owned portfolio of brands include BioShock, Bully,
Carnival Games, Dragon City, Grand Theft Auto, Kerbal Space Program, L.A. Noire, Mafia, Manhunt, Max Payne, Midnight
Club, Monster Legends, Red Dead, Sid Meier's Civilization, and XCOM. We believe that content ownership facilitates our

internal product development efforts and maximizes profit potential. We attempt to protect our software and production
techniques under copyright, patent, trademark and trade secret laws as well as through contractual restrictions on disclosure,
copying and distribution.

We also enter into content license agreements, such as those with sports leagues, players associations, music labels and
musicians. These licenses are typically limited to use of the licensed rights in products for specific time periods. In addition, we
license and include console manufacturer technology in our products on a non-exclusive basis, which allows our games to be
played on their respective hardware systems.

Manufacturing

Platform manufacturers, such as Sony, Microsoft, and Nintendo, either manufacture or control the selection of
approved manufacturers of software products sold for use on their respective hardware platforms. We place a purchase order for
the manufacture of our products with Sony, Nintendo, or Microsoft's approved replicator and then send software code and a
prototype of the product to the manufacturer, together with related artwork, user instructions, warranty information, brochures
and packaging designs for approval, defect testing and manufacture. Games are generally shipped within two to three weeks of
receipt of our purchase order and all materials.

Our software titles typically carry a 90-day limited warranty.

Arrangements with Platform Manufacturers

We have entered into license agreements with Sony and Microsoft to develop and publish software in Asia, Australia,
Europe, North America, and certain Latin American, Middle Eastern, and African countries. We are not required to obtain any
licenses from hardware manufacturers to develop titles for the PC.

Sony. Effective March 23, 2017, we entered into a PlayStation Global Developer and Publisher Agreement with Sony
Computer Entertainment, Inc. and certain of its affiliates, pursuant to which Sony granted us the right and license to develop,
publish, have manufactured, market, advertise, distribute and sell PlayStation compatible products for all PlayStation systems,
including the PS4. The agreement requires us to submit products to Sony for approval and for us to make royalty payments to
Sony based on the number of units manufactured or revenue from downloaded content. In addition, products for PlayStation
systems are required to be manufactured by Sony approved manufacturers.

The term of the agreement expires on March 31, 2021, with automatic one-year renewal terms thereafter. Sony may
terminate the agreement for any or no reason upon thirty days’ notice. The agreement may also be terminated by Sony
immediately in the event of a breach by us or our bankruptcy or insolvency. Upon expiration or termination of the agreement,
we have certain rights to sell off existing inventories.

Microsoft. Under the terms of the license agreements that we have entered into with Microsoft Corporation and its
affiliates, Microsoft granted us the right and license to develop, publish, have manufactured, market, advertise, distribute and
sell Xbox compatible products for the Xbox One and Xbox 360. The agreements require us to submit products to Microsoft for
approval and for us to make royalty payments to Microsoft based on the number of units manufactured or revenue from
downloaded content. In addition, products for the Xbox One and Xbox 360 are required to be manufactured by Microsoft
approved manufacturers.

The term of the Xbox One license agreement renewed on April 1, 2020 for a two-month period expiring on June 1,
2020, while the parties negotiate a new license agreement also covering Microsoft's next generation consoles. The term of the
Xbox 360 license agreement expires on March 31, 2021, with automatic one-year renewal terms thereafter. The Xbox One and
Xbox 360 license agreements may be terminated by Microsoft immediately in the event of a breach by us, and the Xbox One
licensee agreement may also be terminated by Microsoft immediately in the event of our bankruptcy or insolvency. Upon
expiration or termination of the Xbox One and Xbox 360 license agreements, we have certain rights to sell off existing
inventories.

Sales

We sell software titles both physically and digitally through direct relationships with large retail customers, including
digital storefronts and platform partners, and third-party distributors. Our top customers include, among others, Sony,
Microsoft, Steam, GameStop, and Epic. We sell our products globally and have sales operations in Australia, Canada, France,
Germany, Japan, the Netherlands, New Zealand, Singapore, South Korea, Spain, Taiwan, the United Kingdom, and the United
States.

We are dependent on a limited number of customers that account for a significant portion of our sales. Sales to our five
largest customers during the fiscal year ended March 31, 2020 accounted for 71.5% of our net revenue, with Sony and
Microsoft each accounting for more than 10.0% of our net revenue during the fiscal year ended March 31, 2020.

We also distribute our titles, add-on content, and in-game purchases through direct digital download via the Internet to
consoles and PCs, including smartphones and tablets. We view digital distribution as an important growth opportunity for our
industry and Company; however, we expect that packaged goods and traditional retailers will continue to be a significant
channel for the sale of our products for the foreseeable future, particularly for consoles.

Marketing

Our marketing and promotional efforts are intended to maximize consumer interest in our titles, promote brand name
recognition of our franchises, assist retailers and properly position, package and merchandise our titles. From time to time, we
also receive marketing support from hardware manufacturers in connection with their own promotional efforts.

We market titles by:

•

Implementing public relations campaigns, using social, digital, online, television, outdoor, and print marketing,
including certain performance marketing programs. We believe that we label and market our products in accordance
with the applicable principles and guidelines of the Entertainment Software Rating Board, or the ESRB, an
independent self-regulatory body that assigns ratings and enforces advertising guidelines for the interactive software
industry.

Stimulating continued sales by reducing the wholesale prices of our products to retailers, digital storefronts, and
platform providers at various times during the life of a product. Price protection may occur at any time in a product's
life cycle, but typically occurs three to nine months after a product's initial launch. In certain international markets, we
also provide volume rebates to stimulate continued product sales. Price protection, sales returns and other allowances
amounted to $98.0 million, $81.7 million and $59.7 million during the fiscal years ended March 31, 2020, 2019 and
2018, respectively.

Employing various other marketing methods designed to promote consumer awareness, including social media, in-
store promotions and point-of-purchase displays, direct mail, co-operative advertising, attendance at trade shows as
well as product sampling through demonstration software distributed via the Internet or the digital online services.

As of March 31, 2020, we had a sales and marketing staff of 603 people.

Product Procurement

We procure products from suppliers principally using standard purchase orders based on our assessment of market
demand. We carry inventory quantities that we believe are necessary to provide rapid response to retailer and distributor orders.
We utilize electronic data interchange with many of our customers to enhance the efficiency of placing and shipping orders and
receiving payments.

Competition

In our business, we compete with:

•

Companies that range in size and cost structure from very small with limited resources to very large with greater
financial, marketing and technical personnel and other resources than ours. Examples of our competitors include
Activision Blizzard, Inc., Electronic Arts Inc., and Ubisoft Entertainment S.A.

Sony, Microsoft, and Nintendo for the sale of interactive entertainment software. Each of these competitors is a large
developer and marketer of software for their own platforms and has the financial resources to withstand significant
price competition and to implement extensive advertising campaigns.

Other software, hardware, entertainment and media for limited retail shelf space and promotional resources. The
competition is intense among an increasing number of newly introduced entertainment software titles and hardware for
adequate levels of shelf space and promotional support.

Other forms of entertainment such as motion pictures, television and audio, social networking, online computer
programs, mobile games, and other forms of entertainment, which may be less expensive or provide other advantages
to consumers.

Competition in the entertainment software industry is based on innovation, features, playability, product quality, brand
name recognition, compatibility with popular platforms, access to distribution channels, price, marketing, and customer service.

Our business is driven by hit titles, which require increasing budgets for development and marketing. Competition for our titles
is influenced by the timing of competitive product releases and the similarity of such products to our titles and may result in
loss of shelf space or a reduction in sell-through of our titles at retail stores.

International Operations

International sales are a significant part of our business. For the fiscal years ended March 31, 2020, 2019 and 2018, we
earned 42.5%, 46.5% and 41.3%, respectively, of our net revenue outside the United States. We are continuing to execute on
our growth initiatives in Asia, where our strategy is to broaden the distribution of our existing products and expand our online
gaming presence, especially in China and South Korea. We are subject to risks inherent in foreign trade, including increased
credit risks, tariffs and duties, fluctuations in foreign currency exchange rates, shipping delays and international political,
regulatory and economic developments, all of which can have a significant effect on our operating results. See Notes 1 and 2 to
the Consolidated Financial Statements.

Segment and Geographic Information

See Notes 1, 2, and 9 to the Consolidated Financial Statements.

Employees

As of March 31, 2020, we had 5,800 full-time employees, of which 3,123 were employed outside of the United States.
None of our regular employees is subject to collective bargaining agreements. We consider our relations with employees to be
satisfactory.

Item 1A. Risk Factors

Our business is subject to many risks and uncertainties, which may affect our future financial performance. Because of
the risks and uncertainties described below, as well as other factors affecting our operating results and financial condition,
past financial performance should not be considered to be a reliable indicator of future performance and our business and
financial performance could be harmed and the market value of our securities could decline.

Risks relating to our business

We are dependent on the future success of our Grand Theft Auto products and we must continue to publish "hit" titles or
sequels to such "hit" titles in order to compete successfully in our industry.

Grand Theft Auto and certain of our other titles, such as Red Dead Redemption or NBA 2K, are "hit" products and have
historically accounted for a substantial portion of our revenue. Grand Theft Auto products contributed 23.0% of our net revenue
for the fiscal year ended March 31, 2020, and the five best-selling franchises (including Grand Theft Auto), which may change
year over year, in the aggregate accounted for 87.4% of our net revenue for the fiscal year ended March 31, 2020. If we fail to
continue to develop and sell new commercially successful "hit" titles or sequels to such "hit" titles or experience any delays in
product releases or disruptions following the commercial release of our "hit" titles or their sequels, our revenue and profits may
decrease substantially and we may incur losses. In addition, competition in our industry is intense and a relatively small number
of hit titles account for a large portion of total revenue in our industry. Hit products offered by our competitors may take a
larger share of consumer spending than we anticipate, which could cause revenue generated from our products to fall below our
expectations. If our competitors develop more successful products or services at lower price points or based on payment models
perceived as offering better value, or if we do not continue to develop consistently high quality and well-received products and
services, our revenue and profitability may decline. In addition, both the online and mobile games marketplaces are
characterized by frequent product introductions, relatively low barriers to entry, and new and evolving business methods,
technologies and platforms for development. Widespread consumer adoption of these new platforms for games and other
technological advances in and/or new business or payment models in online or mobile game offerings could negatively affect
our sales of console and traditional PC products before we have an opportunity to develop profitable businesses in such
markets.

Our results of operations may be materially adversely impacted by the coronavirus pandemic (COVID-19).

Our results of operations may be materially adversely affected by COVID-19. The global spread of COVID-19 has
created significant uncertainty, resulting in volatility and economic disruption. The extent to which COVID-19 has an impact
on our business, operations and financial results will depend on numerous evolving factors that we may not be able to
accurately predict, including the duration and scope of the pandemic; governmental, business and individuals’ actions that have
been and continue to be taken in response to the pandemic; economic activity and related actions taken in response to the
pandemic; the effect on consumer demand for our products and the discretionary spending patterns of our customers, including
the ability of our customers to pay for our products; our ability to develop, market, and sell our products, including as a result of

travel restrictions and people working from home; the impact on the operations of our counterparties, including the physical
retail, digital download online platforms, and cloud streaming services we rely on for the distribution of our products, the
suppliers who manufacture our physical products, and other third parties with which we partner (e.g. to market or ship our
products); any closures of our, our customers’, and counterparties' offices and facilities; additional volatility in exchange rates;
the impact of potential inflation; and the impact of reductions in interest rates by the Federal Reserve and other central banks,
including on our short-term investment portfolio.

Further, “shelter-in-place,” quarantine, or other such initiatives by governmental entities could also disrupt our
operations. In such situations, if employees or third-party developers who cannot optimally perform their responsibilities from
home are not able to or are unwilling to report to work, we may experience material interruptions in product development and
delays in bringing products to market. Such circumstances may also impact the effectiveness of the Company's quality controls
and game testing measures. An increase in the number of employees working remotely also increases the potential adverse
impact of risk associated with information technology systems and networks, including cyber-attacks, computer viruses,
malicious software, security breach, and telecommunication failures, both for systems and networks we control directly and for
those that employees and third-party developers rely on to work remotely. Any failure to prevent or mitigate security breaches
or cyber risks or detect, or respond adequately to, a security breach or cyber risk, or any other disruptions to our information
technology systems and networks, can have adverse effects on our business. The spread of COVID-19 has caused us to modify
our business practices (including employee travel, employee work locations, and cancellation of physical participation in
meetings, events and conferences), and we may take further actions as may be required by government authorities or that we
determine are in the best interests of our employees, customers and business partners. Further, key personnel could contract
COVID-19 hindering their availability and productivity.

Additionally, sports organizations' operations and seasons may be altered or even canceled based on the response to

COVID-19. Such events could affect the demand for our sports titles.

While we have developed and continue to develop plans to help mitigate the negative impact of the outbreak on our
business, these efforts may not be effective, and a protracted economic downturn may limit the effectiveness of our mitigation
efforts. Any of these considerations described above could cause or contribute to the risks described elsewhere herein and could
materially adversely affect our business, financial condition, results of operations or stock price.

We are subject to product development risks which could result in delays and additional costs, and we must adapt to changes
in software technologies.

We depend on our internal development studios and third-party software developers to develop new interactive
entertainment software within anticipated release schedules and cost projections. The development cycle for new titles
generally ranges from 12 months for annual sports releases, to multiple years for certain of our top-selling titles. Therefore, our
development costs can be substantial. If we or our third-party developers experience unanticipated development delays,
financial difficulties, or additional costs, for example as a result of the coronavirus pandemic (COVID-19), we may not be able
to release titles according to our schedule and at budgeted costs. There can be no assurance that our products will be sufficiently
successful so that we can recoup these costs or make a profit on these products.

Additionally, in order to stay competitive, our internal development studios must anticipate and adapt to rapid
technological changes affecting software development, such as cloud-based game streaming. Any inability to respond to
technological advances and implement new technologies could render our products obsolete or less marketable. Further, the
failure to pursue the development of new technology, platforms, or business models that obtain meaningful commercial success
in a timely manner may negatively affect our business, resulting in increased production or development costs and more
strenuous competition.

The inability of our products to achieve significant market acceptance, delays in product releases or disruptions following
the commercial release of our products may have a material adverse effect on our business, financial condition and
operating results.

New products may not achieve significant market acceptance, generate sufficient sales, or be introduced in a timely
manner to permit us to recover development, manufacturing and marketing costs associated with these products. The life cycle
of a title generally involves a relatively high level of sales during the first few months after introduction followed by a rapid
decline in sales. Because sales associated with an initial product launch generally constitute a high percentage of the total sales
associated with the life of a product, delays in product releases or disruptions following the commercial release of one or more
new products could have a material adverse effect on our business, financial condition, and operating results and therefore
cause our operating results to be materially different from our expectations.

Our business is subject to our ability to develop commercially successful products for the current video game platforms.

We derive most of our revenue from the sale of products made for video game platforms manufactured by third
parties, such as Sony's PS4 and Microsoft's Xbox One, which comprised 74.7% of our net revenue by product platform for the
fiscal year ended March 31, 2020. The success of our business is subject to the continued popularity of these platforms and our
ability to develop commercially successful products for these platforms.

In 2020, we expect Sony and Microsoft to launch their respective next generation consoles, although COVID-19 or
other events may impact the timing of release and availability of these new consoles. When next generation consoles are
announced or introduced into the market, consumers have typically reduced their purchases of products for prior-generation
consoles in anticipation of purchasing a next-generation console and products for that console. During these periods, sales of
the products we publish may decline until new platforms achieve wide consumer acceptance. Console transitions may have a
comparable impact on sales of downloadable content, amplifying the impact on our revenues. This decline may not be offset by
increased sales of products for the next-generation consoles. In addition, as console hardware moves through its life cycle,
hardware manufacturers typically enact price reductions, and decreasing prices may put downward pressure on software prices.
During console transitions, we may simultaneously incur costs both in continuing to develop and market new titles for prior-
generation video game platforms, which may not sell at premium prices, and also in developing products for next-generation
platforms, which may not generate immediate or near-term revenues. As a result, our business and operating results may be
more volatile and difficult to predict during console transitions than during other times.

We may experience declines or fluctuations in the recurring portion of our business.

Our business model includes revenue that we expect to be recurring in nature, such as revenue from our annualized
titles and associated services, and ongoing mobile businesses. While we have been able to forecast the revenue from these areas
of our business with greater certainty than for new offerings, we cannot provide assurances that consumers will purchase these
games and services on a consistent basis. Furthermore, we may cease to offer games and services that we previously had
deemed to be recurring in nature. Consumer purchases of our games and services may decline or fluctuate as a result of a
number of factors, including their level of satisfaction with our games and services, our ability to improve and innovate our
annualized titles, our ability to adapt our games and services to new platforms, outages and disruptions of online services, the
games and services offered by our competitors, our marketing and advertising efforts or declines in consumer activity generally
as a result of economic downturns, for example as a result of COVID-19, among others. Any decline or fluctuation in this
portion of our business may have a negative impact on our financial and operating results.

Connectivity issues could affect our ability to sell and provide online services for our products and could affect our
profitability.

We rely upon third-party digital delivery platforms, such as Microsoft's Xbox Live, PlayStation Network, Steam, Epic,
and other third-party service providers, to provide connectivity from the consumer to our digital products and our online
services. Connectivity issues could prevent customers from accessing this content and our ability to successfully market and sell
our products could be adversely affected. Given the increasing global usage of online platforms as a result of the COVID-19
pandemic, the risks of connectivity issues may be heightened. In addition, we could experience similar issues related to services
we host on our internal servers. Such issues also could affect our ability to provide game-related services and could have a
material adverse effect on our business, financial condition and operating results.

We rely on complex information technology systems and networks to operate our business. Any significant system or
network disruption could have a negative impact on our business.

We rely on the efficient and uninterrupted operation of complex information technology systems and networks, some
of which are within Take-Two and some of which are managed and/or hosted by third-party providers. All information
technology systems and networks are potentially vulnerable to damage or interruption from a variety of sources, including but
not limited to cyber-attacks, computer viruses, malicious software, security breach, energy blackouts, natural disasters,
terrorism, war and telecommunication failures. We may also face sophisticated attacks, referred to as advanced persistent
threats, which are cyber-attacks aimed at compromising our intellectual property and other commercially-sensitive information,
such as the source code and game assets for our software or confidential customer or employee information, which remain
undetected for prolonged periods of time. Information technology system, network failures, or security breaches could
negatively affect our business continuity, operations and financial results. These risks extend to the networks and e-commerce
sites of console platform providers and other partners who sell or host our content online. The risk of such threats may be
heightened as a result of an extended period of remote work arrangements due to COVID-19. Along with our partners, we have
expended, and expect to continue to expend, financial and operational resources to implement certain systems, processes and
technologies to guard against cyber risks and to help protect our data and systems. However, the techniques used to exploit,
disable, damage, disrupt or gain access to our networks, our products and services, supporting technological infrastructure,

intellectual property and other assets change frequently, continue to evolve in sophistication and volume, and often are not
detected for long periods of time. Our systems, processes and technologies, and the systems, processes and technologies of our
business partners or our third-party service providers, may not be adequate against all eventualities. In addition, the costs to
respond to, mitigate, and/or notify affected parties of cyber-attacks and other security vulnerabilities are significant. Any failure
to prevent or mitigate security breaches or cyber risks, or detect or respond adequately to a security breach or cyber risk, could
result in a loss of anticipated revenue, interruptions to our products and services, cause us to incur significant remediation and
notification costs, degrade the user experience, cause consumers to lose confidence in our products and services and significant
legal and financial costs. Additionally, applicable insurance policies may be insufficient to reimburse the company for all such
losses, and it is uncertain whether we will be able to maintain the current level of insurance coverage in the future on reasonable
terms or at all.

Successful exploitation of our systems can have other negative effects upon the products, services and user experience
we offer. In particular, the virtual economies that we have established in many of our games are subject to abuse, exploitation
and other forms of fraudulent activity that can negatively affect our business. Virtual economies involve the use of virtual
currency and/or virtual assets that can be used or redeemed by a player within a particular game or service. Although we have
implemented and continue to develop programs reasonably designed to prevent such negative impacts, the abuse or exploitation
of our virtual economies can include the illegitimate generation and sale of virtual items in black markets. These kinds of
activities and the steps that we take to address and prevent these issues may result in a loss of anticipated revenue, interfere with
players’ enjoyment of a balanced game environment and cause reputational harm.

Our business could be adversely affected if our consumer data protection measures are not seen as adequate or there are
breaches of our security measures or unintended disclosures of our consumer data.

We are collecting and storing consumer information, including personal information. We take measures to protect our
consumer information from unauthorized access or disclosure. It
is possible that our security controls over consumer
information may not prevent the improper access or disclosure of personal information. In addition, due to the high-profile
nature of our products, we may draw a disproportionately higher amount of attention and attempts to breach our security
controls than companies with lower profile products. A security incident that leads to disclosure of consumer information
(including personal information) could harm our reputation, compel us to comply with disparate breach notification laws in
various jurisdictions and otherwise subject us to liability under laws that protect personal information, any of which could result
in increased costs or loss of revenue. A resulting perception that our products or services do not adequately protect the privacy
of personal information could result in a loss of current or potential consumers and business partners. In addition, if any of our
business partners experience a security incident that leads to disclosure of consumer information, our reputation could be
harmed, resulting in loss of revenue.

In addition, certain of our products are online enabled. The ability of our products to offer online functionality, and our
ability to offer content through a video game platform's digital distribution channel, is dependent upon the continued operation
and security of such platform's online network. These third party networks, as well as our own internal systems and websites,
and the related security measures may be breached as a result of third-party action, including intentional misconduct by
computer hackers, employee error, malfeasance or otherwise, and result in someone obtaining unauthorized access to our
customers' information or our data—including our intellectual property and other confidential business information—or our
information technology systems. Because the techniques used to obtain unauthorized access, or to sabotage systems, change
frequently and generally are not recognized until launched against a target, we may be unable to anticipate these techniques or
to implement adequate preventative measures. If an actual or perceived breach of our safeguards occurs, we may lose business,
suffer irreparable damage to our reputation, and/or incur significant costs and expenses relating to the investigation and possible
litigation of claims relating to such event.

The laws and regulations concerning data privacy and certain other aspects of our business are continually evolving.
Failure to comply with these laws and regulations could harm our business.

We are subject to certain privacy and data protection laws, including those in the United States ("U.S."). Certain
activities related to processing the personal data of individuals in the European Union ("E.U.") are conducted by our United
Kingdom ("U.K.")-based data controller or our local entities in the E.U. The U.S. Children's Online Privacy Protection Act also
regulates the collection, use, and disclosure of personal information from children under 13 years of age. Failure to comply with
privacy and data protection laws or age restrictions may increase our costs, subject us to expensive and distracting government
investigations, and result in substantial fines, or result in lawsuits and claims against us to the extent these laws include a private
right of action.

Privacy and data protection laws are rapidly changing and likely will continue to do so for the foreseeable future,
which could have an impact on our approach to operating and marketing our games. For example, the E.U. General Data
Protection Regulation ("GDPR") became effective on May 25, 2018, replacing Data Protection Directive 95/46/EC. GDPR

applies to us because we receive and process the personal information of individuals in the E.U., and we maintain certain local
entities in the E.U. responsible for processing personal information. GDPR contains significant penalties for non-compliance.
Countries in the E.U. are still enacting national laws that correspond to certain portions of the GDPR. In the U.S., the California
Consumer Privacy Act ("CCPA") became effective on January 1, 2020 and applies to processing of personal information of
California residents. Other states, including Nevada, have enacted or are considering similar privacy or data protection laws that
may apply to us. The U.S. government, including the Federal Trade Commission and the Department of Commerce, also
continue to review the need for greater or different regulation over the collection of personal information and information about
consumer behavior on the Internet and on mobile devices, and the U.S. Congress is considering a number of legislative
proposals to regulate in this area. Various government and consumer agencies worldwide have also called for new regulation
and changes in industry practices.

Player use of our games is subject to our privacy policy, end user license agreements ("EULA"), and terms of service.
If we fail to comply with our posted privacy policy, EULA, or terms of service, or if we fail to comply with existing privacy or
data protection laws and regulations, it could result in proceedings or litigation against us by governmental authorities or others,
which could result in fines or judgments against us, damage our reputation, affect our financial condition, and harm our
business. If regulators, the media, or consumers raise any concerns about our privacy and data protection or consumer
protection practices, even if unfounded, this could also result in fines or judgments against us, damage our reputation,
negatively affect our financial condition, and damage our business.

It is possible that a number of laws and regulations may be adopted or construed to apply to us in the U.S. and
elsewhere that could restrict the interactive entertainment industry, including player privacy, advertising, taxation, content
suitability, copyright, distribution, and antitrust. Furthermore, the growth and development of electronic commerce and virtual
goods may prompt calls for more stringent consumer protection laws that may impose additional burdens on companies such as
ours conducting business through digital sales. Any such changes would require us to devote legal and other resources to
address such regulation. For example, existing laws or new laws regarding the regulation of currency, banking institutions, and
unclaimed property may be interpreted to cover virtual currency or virtual goods. If that were to occur we may be required to
seek licenses, authorizations, or approvals from relevant regulators, the granting of which may be dependent on us meeting
certain capital and other requirements and we may be subject to additional regulation and oversight, all of which could
significantly increase our operating costs. Changes in current laws or regulations or the imposition of new laws and regulations
in the U.S. or elsewhere regarding these activities may lessen the growth of the interactive entertainment industry and impair
our business, financial condition, and operating results.

Although we have structured and operate our skill tournaments with applicable laws in mind, including any applicable
laws relating to gambling, and believe that playing these games does not constitute gambling, our skill tournaments could in the
future become subject to gambling-related rules and regulations and expose us to civil and criminal penalties. We also
sometimes offer consumers of our online and casual games various types of contests and promotional opportunities. We are
subject to laws in a number of jurisdictions concerning the operation and offering of such activities and games, many of which
are still evolving and could be interpreted in ways that could harm our business. Further, some of our online games and other
services include random digital item mechanics, which may become subject to regulations in various jurisdictions. If these were
to occur, we might be required to seek licenses, authorizations, or approvals from relevant regulators, the granting of which
may be dependent on us meeting certain capital and other requirements, and we may be subject to additional regulation and
oversight, such as reporting to regulators, all of which could significantly increase our operating costs. Changes in current laws
or regulations or the imposition of new laws and regulations in the U.S., the E.U., or elsewhere regarding these activities may
lessen the growth of online or casual game services and impair our business. Also, existing laws or new laws regarding the
marketing of in-game or in-app purchases, regulation of currency, banking institutions, unclaimed property, or money
laundering may be interpreted to cover virtual currency or goods.

Security breaches involving the source code for our products or other sensitive and proprietary information could adversely
affect our business.

We securely store the source code for our interactive entertainment software products as it is created. A breach,
whether physical, electronic or otherwise, of the systems on which such source code and other sensitive data are stored could
lead to damage or piracy of our software. In addition, certain parties with whom we do business are given access to our
sensitive and proprietary information in order to provide services and support our team. These third parties may misappropriate
our information and engage in unauthorized use of it. If we or these third parties are subject to data security breaches, we may
have a loss in sales or increased costs arising from the restoration or implementation of additional security measures which
could materially and adversely affect our business, financial condition and operating results. Any theft and/or unauthorized use
or publication of our trade secrets and other confidential business information as a result of such an event could adversely affect
our competitive position, reputation, brand, and future sales of our products. Our business could be subject to significant
disruption, and we could suffer monetary and other losses and reputational harm, in the event of such incidents and claims.

Our efforts to expand into new products and services may subject us to additional risks.

In recent years, we have continued to invest in emerging opportunities in interactive entertainment played on mobile
platforms, including tablets and smartphones, and online platforms, including social networks. We have also grown our product
offerings that are available through digital download, including virtual currency, through our existing franchises such as Grand
Theft Auto and NBA 2K, as well as through our mobile product offerings. We are actively investing to capitalize on these trends
in order to diversify our product mix, reduce our operating risks, and increase our revenue. There are risks and uncertainties
associated with these efforts, particularly in instances where the markets are not fully developed. There is no assurance that we
will be able to attract a sufficiently large number of customers or recover costs incurred for developing and marketing any of
these new products or services. For example, we may offer games that do not attract sufficient purchases of virtual currency,
which may cause our investments into this product space, such as through our acquisition of Social Point, to fail to realize the
expected benefits. External factors, such as competitive alternatives and shifting market preferences, may also have an impact
on the successful
implementation of any new products or services. Failure to successfully manage these risks in the
development and implementation of new products or services could have a material adverse effect on our business, financial
condition and operating results.

We depend on our key management and product development personnel.

Our continued success will depend to a significant extent on our senior management team and our relationship with
ZelnickMedia Corporation ("ZelnickMedia"). Our Executive Chairman/Chief Executive Officer and President are partners of
ZelnickMedia. We are also highly dependent on the expertise, skills and knowledge of our key creative personnel responsible
for content creation and development of our Grand Theft Auto and other hit titles and titles based on other brands. We may not
be able to continue to retain these personnel at current compensation levels, or at all.

The loss of the services of our executive officers, ZelnickMedia, or certain key creative personnel could significantly
harm our business. In addition, if one or more key employees were to join a competitor or form a competing company, we may
lose additional personnel, experience material interruptions in product development, delays in bringing products to market and
difficulties in our relationships with licensors, suppliers and customers, which would significantly harm our business. Failure to
continue to attract and retain qualified management and creative personnel could adversely affect our business and prospects.

Declines in consumer spending and other adverse changes in the economy could have a material adverse effect on our
business, financial condition and operating results.

Most of our products involve discretionary spending on the part of consumers. We believe that consumer spending is
influenced by general economic conditions and the availability of discretionary income. This makes our products particularly
sensitive to general economic conditions and economic cycles as consumers are generally more willing to make discretionary
purchases, including purchases of products like ours, during periods in which favorable economic conditions prevail. Adverse
economic conditions, such as a prolonged U.S. or international general economic downturn, such as those caused by
COVID-19, including periods of increased inflation, unemployment levels, tax rates, interest rates, energy prices, or declining
consumer confidence, could also reduce consumer spending. Reduced consumer spending has and may in the future continue to
result in reduced demand for our products and may also require increased selling and promotional expenses, which has had and
may continue to have an adverse effect on our business, financial condition and operating results. In addition, during periods of
relative economic weakness, our consolidated credit risk, reflecting our counterparty dealings with distributors, customers,
capital providers and others may increase, perhaps materially so. As a result of COVID-19, our counterparty credit risk may be
particularly exacerbated, as certain of our counterparties may face financial difficulties in paying owed amounts on a timely
basis or at all. Furthermore, uncertainty and adverse changes in the economy could also increase the risk of material losses on
our investments, increase costs associated with developing and publishing our products, increase the cost and availability of
sources of financing, and increase our exposure to material losses from bad debts, any of which could have a material adverse
effect on our business, financial condition and operating results. If economic conditions worsen, our business, financial
condition and operating results could be adversely affected.

We are particularly susceptible to market conditions and risks associated with the entertainment industry, which, in
addition to general macroeconomic downturns, also include the popularity, price, and timing of our products; changes in
consumer demographics; the availability and popularity of other forms of entertainment and leisure; and critical reviews and
public tastes and preferences, which may change rapidly and cannot necessarily be predicted.

Changes in our tax rates or exposure to additional tax liabilities could adversely affect our earnings and financial condition.

We are a multinational corporation with operations in the U.S. and various other jurisdictions around the world.
Accordingly, we are subject to tax in the U.S. and in various other jurisdictions. Significant judgment is required in determining
our worldwide provision for income taxes, and, in the ordinary course of business, there are many transactions and calculations
where the ultimate tax determination is uncertain. We are required to estimate future taxes. Although we currently believe our

tax estimates are reasonable, the estimation process is inherently uncertain, and such estimates are not binding on tax
authorities. Further, our effective tax rate could be adversely affected by a variety of factors, including changes in the business,
the mix of earnings between countries with differing statutory tax rates, changes in tax elections, and changes in applicable tax
laws. Additionally, tax determinations are regularly subject to audit by tax authorities, and developments in those audits could
adversely affect our income tax provision. Should the ultimate tax liability exceed estimates, our income tax provision and net
income or loss could be materially affected.

In addition, numerous countries are evaluating their existing tax laws due in part to recommendations made by the
Organization for Economic Co-operation and Development’s (“OECD’s”) Base Erosion and Profit Shifting (“BEPS”) project.
Although we cannot predict whether, or in what form, any legislation based on such proposals may be adopted by the countries
in which we do business, future tax reform based on such proposals may increase the amount of taxes we pay and adversely
affect our operating results and cash flows.

In the fiscal year ended March 31, 2019, we released our valuation allowance on certain U.S. deferred tax assets as a
result of a determination that it was more-likely-than-not that such deferred tax assets would be realized. We will continue to
evaluate our ability to realize our U.S. deferred tax assets. If future evidence suggests that any changes are required to reflect
the amount of our U.S. deferred tax asset that is more-likely-than-not to be realized, we will adjust our valuation allowance as
needed in the appropriate period.

On June 21, 2018, the U.S. Supreme Court issued its decision in South Dakota v. Wayfair, which overturned previous
case law that precluded states from requiring retailers to collect and remit sales tax on sales made to in-state customers unless
the retailer had a physical presence in the state. Although this case is limited to sales tax collection obligations, we continue to
monitor the potential impact of this decision on our state income tax footprint.

The ultimate amount of tax payable in a given financial statement period may be materially affected by sudden or
unforeseen changes in tax laws, changes in the mix and level of earnings by taxing jurisdictions, or changes to existing
accounting rules or regulations. For example, on July 27, 2015, the U.S. Tax Court issued an opinion in Altera Corp. v.
Commissioner, which concluded that related parties in an intercompany cost-sharing arrangement are not required to share costs
related to stock-based compensation. In February 2016, the U.S. Internal Revenue Service appealed the decision to the U.S
Court of Appeals for the Ninth Circuit. On June 7, 2019, the Ninth Circuit reversed the 2015 decision of the U.S. Tax Court. As
a result of this decision, we are no longer reflecting a net tax benefit within our financial statements related to the removal of
stock-based compensation from our intercompany cost-sharing arrangement. The taxpayer in the case requested a rehearing
before the full Ninth Circuit which was denied on November 12, 2019. The case remains potentially open for judicial review by
the U.S. Supreme Court. As a result, the final outcome of the case is uncertain. In February 2020, the taxpayer petitioned the
U.S. Supreme Court to review the Ninth Circuit’s decision and is awaiting the Supreme Court’s decision as to whether it will
hear the case. We will continue to monitor ongoing developments and potential impacts to our financial statements.

We earn a significant amount of our operating income and continue to hold a significant portion of our cash outside the
U.S. Our current intention is to reinvest indefinitely earnings of our foreign subsidiaries, and therefore we have not recorded
any tax liabilities associated with the repatriation of foreign earnings.

The Tax Cuts and Jobs Act (the "Tax Act") subjects a U.S. shareholder to current tax on GILTI earned by foreign
subsidiaries. The FASB Staff Q&A Topic No. 5, Accounting for Global Intangible Low-Taxed Income, states that an entity can
make an accounting policy election either to recognize deferred taxes for temporary differences that are expected to reverse as
GILTI in future years or provide for the tax expense related to GILTI resulting from those items in the year the tax is incurred.
We have elected to recognize the resulting tax on GILTI as an expense in the period incurred.

We are also required to pay taxes other than income taxes, such as payroll, sales, use, value-added, net worth, property,
and goods and services taxes, in both the U.S. and foreign jurisdictions. We are regularly under examination by tax authorities
with respect to these non-income taxes. There can be no assurance that the outcomes from these examinations, changes in our
business or changes in applicable tax law or interpretations will not have an adverse effect on our net income or loss and
financial condition.

Our quarterly operating results are dependent on the release of "hit" titles and therefore dependent on the timing of our
product releases, which may cause our quarterly operating results to fluctuate significantly.

We have experienced and may continue to experience wide fluctuations in quarterly operating results. The release of a
"hit" title typically leads to a high level of sales during the first few months after introduction followed by a rapid decline in
sales. In addition, the interactive entertainment industry is highly seasonal, with sales typically higher during the fourth calendar
quarter, due primarily to increased demand for games during the holiday season. Demand for and sales of titles in our NBA 2K
series are also seasonal in that they are typically released just prior to the start of the NBA season. If a key event or sports
season to which our product release schedule is tied were to be delayed or canceled, our sales might also suffer

disproportionately. For example, the NBA season, along with several other professional sports leagues, have cancelled or
delayed their seasons as a result of the COVID-19 outbreak. Our failure or inability to produce "hit" titles or introduce products
on a timely basis to meet seasonal fluctuations in demand could adversely affect our business, financial condition and operating
results. The uncertainties associated with software development, manufacturing lead times, production delays and the approval
process for products by hardware manufacturers and other licensors make it difficult to predict the quarter in which our
products will ship and therefore may cause us to fail to meet financial expectations.

Price protection granted to our customers and returns of our published titles by our customers may adversely affect our
operating results.

We are exposed to the risk of price protection and product returns with respect to our customers. Our distribution
arrangements with customers generally do not give them the right to return titles to us or to cancel firm orders. However, we
sometimes accept product returns from our distribution customers for stock balancing and negotiate accommodations for
customers, which include credits and returns, when demand for specific products falls below expectations. We grant price
protection and accept returns in connection with our publishing arrangements, and revenue is recognized after deducting
estimated price protection and reserves for returns. While we believe that we can reliably estimate price protection and returns,
if price protection and return rates for our products exceed our reserves, our revenue could decline, which could have a material
adverse effect on our business, financial condition, and operating results.

Increased sales of used video game products could lower our sales.

Certain of our larger customers sell used video games, which are generally priced lower than new video games. If our
customers increase their sales of used video games, it could negatively affect our sales of new video games and have an adverse
influence on our business, financial condition and operating results.

A limited number of customers account for a significant portion of our sales. The loss of a principal customer or other
significant business relationship could seriously hurt our business.

A substantial portion of our product sales are made to a limited number of customers. Sales to our five largest
customers during the fiscal year ended March 31, 2020 accounted for 71.5% of our net revenue, with Sony and Microsoft each
accounting for more than 10.0% of our net revenue during the fiscal year ended March 31, 2020. Our sales are made primarily
without long-term agreements or other commitments, and our customers may terminate their relationship with us at any time.
Certain of our customers may decline to carry products containing mature content. The loss of our relationships with principal
customers or a decline in sales to principal customers, including as a result of a product being rated "AO" (age 18 and over)
could materially adversely affect our business, financial condition and operating results. In addition, if our customers are
subject to pricing pressures due to deteriorating demand for our products, competitive pressure, or otherwise, such customers
may pass those pricing pressures through to us, which could materially adversely affect our business, financial condition and
operating results.

In addition, because some of our customers are also publishers of games for their own hardware platforms and may
manufacture products for other licensees, such customers may give priority to their own products or those of our competitors.
Accordingly, console manufacturers like Sony or Microsoft could cause unanticipated delays in the release of our products, as
well as increases to projected development, manufacturing, marketing, or distribution costs, any of which could negatively
impact our business.

Furthermore, our customers may also be placed into bankruptcy, become insolvent, or be liquidated due to economic
downturns, global contractions of credit, or for other factors. This risk has been heightened by the COVID-19 pandemic.
Bankruptcies or consolidations of certain large retail customers could seriously hurt our business, including as a result of
uncollectible accounts receivable from such customers and the concentration of purchasing power among remaining large
retailers. In addition, our results of operations may be adversely affected if certain of our customers who purchase on credit
terms are no longer eligible to purchase on such terms due to their financial distress or lack of credit insurance, which may
reduce the quantity of products they demand from us.

If our marketing and advertising efforts fail to resonate with consumers, our business, financial condition and operating
results could be adversely affected.

Our products are marketed worldwide through a diverse spectrum of promotional programs, such as social media
advertising, digital and online marketing, television advertising, print advertising, retail merchandising, website development,
and event sponsorship. Our ability to sell our products and services is dependent in part on the success of these programs. If the
marketing for our products and services fails to resonate with consumers, particularly during the holiday season or other key
selling periods, or if advertising rates or other media placement costs increase, these factors could have a material adverse
influence on our business, financial condition and operating results.

The interactive entertainment software industry is highly competitive.

We compete for both licenses to properties and the sale of interactive entertainment software with Sony and Microsoft,
each of which is a large developer and marketer of software for its own platforms. We also compete with game publishers, such
as Activision Blizzard, Inc., Electronic Arts Inc., and Ubisoft Entertainment S.A. As our business is dependent upon our ability
to develop hit titles, which require increasing budgets for development and marketing, the availability of significant financial
resources has become a major competitive factor in developing and marketing software games. Some of our competitors have
greater financial, technical, personnel, and other resources than we do and are able to finance larger budgets for development
and marketing and make higher offers to licensors and developers for commercially desirable properties. Our titles also
compete with other forms of entertainment, such as social media and casual games, in addition to motion pictures, television
and audio and video products featuring similar themes, online computer programs and other entertainment, which may be less
expensive or provide other advantages to consumers.

A number of software publishers who compete with us have developed and commercialized or are currently
developing online games. If technological advances significantly increase the availability of online games and if consumer
acceptance of online gaming grows substantially, it could result in a decline in our platform-based software sales and negatively
affect sales of such products.

Additionally, we compete with other forms of entertainment and leisure activities. While we monitor general market
conditions, significant shifts in consumer demand that could materially alter public preferences for different forms of
entertainment and leisure activities are difficult to predict. Failure to adequately identify and adapt to these competitive
pressures could have a negative impact on our business.

Increased competition for limited shelf space and promotional support from retailers could affect the success of our business
and require us to incur greater expenses to market our titles.

While digital sales are increasingly important to our business, for physical sales, retailers have limited shelf space and
promotional resources. Competition is intense among newly introduced interactive entertainment software titles for adequate
levels of shelf space and promotional support, with most and highest quality shelf space devoted to those products expected to
be best sellers. We cannot be certain that our new products will consistently achieve best seller status. Competition for retail
shelf space is expected to continue to increase, which may require us to increase our marketing expenditures to maintain
desirable sales levels of our titles. Competitors with more extensive lines and more popular titles may have greater bargaining
power with retailers. Accordingly, we may not be able, or we may have to pay more than our competitors, to achieve similar
levels of promotional support and shelf space. Similarly, as digital sales increase in importance to our business, there is
increasing competition for premium placements of products on websites. Such placement is subject to many similar risks as
physical shelf space discussed above.

The increasing importance of digital sales to our business exposes us to the risks of that business model, including greater
competition.

The proportion of our revenues derived from digital content delivery, as compared to traditional retail sales, may
continue to increase. The increased importance of digital content delivery in our industry, including through subscription-based
access to a portfolio of interactive content, increases our potential competition, as the minimum capital needed to produce and
publish a digitally delivered game is significantly less than that needed to produce and publish one that is purchased through
retail distribution. This will also require us to dedicate capital to developing and implementing alternative marketing strategies,
which we may not do successfully. If either occurs, we may be unable to effectively market and distribute our products, which
could materially adversely affect our business, financial condition and operating results. In addition, a continuing shift to digital
delivery could result in a deprioritization of our products by traditional retailers. The increasing importance of digital sales to
our business could also result in increasing issues with our digital distribution process, including difficulties our distributors
have with collecting from consumers and any associated rebates we would owe.

Our business is partly dependent on our ability to enter into successful software development arrangements with third
parties.

Our success depends on our ability to continually identify and develop new titles on a timely basis. We rely on third-
party software developers for the development of some of our titles. Quality third-party developers are continually in high
demand. Software developers who have developed titles for us in the past may not be available to develop software for us in the
future. Due to the limited availability of third-party software developers and the limited control that we exercise over them,
these developers may not be able to complete titles for us on a timely basis or within acceptable quality standards, if at all. We
have entered into agreements with third parties to acquire the rights to publish and distribute interactive entertainment software
as well as to use licensed intellectual properties in our titles. These agreements typically require us to make development
payments, pay royalties and satisfy other conditions. Our development payments may not be sufficient to permit developers to

develop new software successfully, which could result in material delays and significant increases in our costs to bring
particular products to market. Software development costs, promotion and marketing expenses and royalties payable to
software developers and third-party licensors have continued to increase and reduce potential profits derived from sales of our
software. Future sales of our titles may not be sufficient to recover development payments and advances to software developers
and licensors, and we may not have adequate financial and other resources to satisfy our contractual commitments to such
developers. If we fail to satisfy our obligations under agreements with third-party developers and licensors, the agreements may
be terminated or modified in ways that are burdensome to us and have a material adverse effect on our business, financial
condition and operating results.

We cannot publish our titles without the approval of hardware licensors that are also our competitors.

We are required to obtain licenses from certain of our competitors, including Sony and Microsoft, to develop and
publish titles for their respective hardware platforms. Our existing platform licenses require that we obtain approval for the
publication of new titles on a title-by-title basis. As a result, the number of titles we are able to publish for these hardware
platforms, our ability to manage the timing of the release of these titles, and, accordingly, our net revenue from titles for these
hardware platforms, may be limited. If a licensor chooses not to renew or extend our license agreement at the end of its current
term, or if a licensor were to terminate our license for any reason or does not approve one or more of our titles, we may be
unable to publish that title as well as additional titles for that licensor's platform. During a console transition, like the one that is
expected to occur in 2020, hardware platform manufacturers may seek to change the terms governing our relationships with
them. Termination of any such agreements or disapproval of titles could seriously hurt our business and prospects. We may be
unable to continue to enter into license agreements for certain current generation platforms on satisfactory terms or at all.
Failure to enter into any such agreement could also seriously hurt our business.

We rely on a limited number of channel partners some of whom influence the fee structures for online distribution of our
games on their platforms.

We rely on a limited number of channel partners, some of whom have retained the right to change the fee structures for
online distribution of both paid content and free content (including patches and corrections) that we license to them for
distribution on their platforms. Such channel partners' ability to set or influence royalty rates may increase costs, which could
negatively affect our operating margins. We may be unable to distribute our content in a cost-effective or profitable manner
through such distribution channel, which could adversely affect our business, financial condition and operating results.

Outside of fee arrangements, our agreements with our channel partners sometimes give them significant control over
other aspects of the distribution of our products and services that we develop for their platform. If our channel partners establish
terms that restrict our offerings through their channels, or significantly affect the financial terms on which these products or
services are offered to our customers, we may be unable to distribute our product offerings through them or be forced to do so
on a materially worse financial or business terms in negotiating such various aspects of distribution. Increased competition for
digital “shelf space” has put channel partners in more favorable bargaining positions in relation to such terms of distribution.

We may not be able to adequately adjust our cost structure in a timely fashion in response to a sudden decrease in demand.

In the event of a significant decline in revenue, we may not be able to dispose of facilities, reduce personnel, or make
other changes to our cost structure without disruption to our operations or without significant termination and exit costs.
Management may not be able to implement such actions in a timely manner, if at all, to offset an immediate shortfall in revenue
and profit. Moreover, reducing costs may impair our ability to produce and develop software titles at sufficient levels in the
future.

We use open source software in connection with certain of our games and services, which may pose particular risks to our
proprietary software, products, and services in a manner that could have a negative impact on our business.

We use open source software in connection with certain of our games and the services we offer. Some open source
software licenses require users who distribute open source software as part of their software to publicly disclose all or part of
the source code to such software or make available any derivative works of the open source code on unfavorable terms or at no
cost. The terms of various open source licenses have not been interpreted by courts, and there is a risk that such licenses could
be construed in a manner that imposes unanticipated conditions or restrictions on our use of the open source software. If it were
determined that our use was not in compliance with a particular license, we may be required to release our proprietary source
code, pay damages for breach of contract, re-engineer our games, discontinue distribution in the event re-engineering cannot be
accomplished on a timely basis or take other remedial action that may divert resources away from our game development
efforts, any of which could harm our business.

We depend on servers and Internet bandwidth to operate our games and digital services with online features. If we were to
lose server capacity or lack sufficient Internet bandwidth for any reason, our business could suffer.

We rely on data servers, including those owned or controlled by third parties, to enable our customers to download our
games and other downloadable content, and to operate our online games and other products with online functionality. Events
such as limited hardware failure, any broad-based catastrophic server malfunction, a significant intrusion by hackers that
circumvents security measures, or a failure of disaster recovery services would likely interrupt the functionality of our games
with online services and could result in a loss of sales for games and related services. An extended interruption of service could
materially adversely affect our business, financial condition and operating results.

We expect a significant portion of our games to be on-line enabled in the future, and therefore we must project our
future server needs and make advance purchases of servers or server capacity to accommodate expected business demands. If
we underestimate the amount of server capacity our business requires or if our business were to grow more quickly than
expected or if internet bandwidth becomes limited as a result of COVID-19 related increased worldwide demand, our
consumers may experience service problems, such as slow or interrupted gaming access. Insufficient server capacity may result
in decreased sales, a loss of our consumer base and adverse consequences to our reputation. Conversely, if we overestimate the
amount of server capacity required by our business, we may incur additional operating costs.

Because of the potential importance of our online business to our revenues and results of operations, our ability to
access adequate Internet bandwidth and online computational resources to support our business is critical. If the price of such
resources increases, we may not be able to increase our prices or subscriber levels to compensate for such costs, which could
materially adversely affect our business, financial condition, and operating results.

We submit our products for rating by the Entertainment Software Rating Board ("ESRB") in the United States and other
voluntary or government ratings organizations in foreign countries. Failure to obtain a target rating for certain of our
products could negatively affect our ability to distribute and sell those games, as could the re-rating of a game for any
reason.

We voluntarily submit our game products to the ESRB, a U.S.-based non-profit and independent ratings organization.
The ESRB system provides consumers with information about game content using a rating symbol that generally suggests the
appropriate player age group and specific content descriptors, such as graphic violence, profanity or sexually explicit material.
The ESRB may impose significant penalties on game publishers for violations of its rules related to rating or marketing games,
including revocation of a rating or monetary fines. Other countries require voluntary or government backed ratings as
prerequisites for product sales. In some instances, we may have to modify our products in order to market them under the target
rating, which could delay or disrupt the release of our products. In addition, some of our titles may not be sold at all or without
extensive edits in certain countries, such as Germany.

In the U.S., if the ESRB rates a game as "AO" (age 18 and older), platform licensors may not certify the game and
retailers may refuse to sell it. In addition, some consumers have reacted to re-ratings or controversial game content by refusing
to purchase such games, demanding refunds for games that they had already purchased, and refraining from buying other games
published by us. Many of our Rockstar titles and certain of our 2K titles have been rated "M" (age 17 and older) by the ESRB.
If we are unable to obtain "M" ratings and instead receive "AO" ratings on future versions of those or similar titles as a result of
changes in the ESRB's ratings standards or for other reasons, including the adoption of legislation in this area, our business and
prospects could be negatively affected. If any of our games are re-rated by the ESRB or other foreign based ratings
organizations, we could be exposed to litigation, administrative fines and penalties and other potential liabilities, and our
operating results and financial condition could be significantly affected.

We have implemented processes to comply with the requirements of the ESRB and other ratings organizations and
properly display the designated rating symbols and content descriptions. Nonetheless, these processes are subject to human
error, circumvention, overriding and reasonable resource constraints. If a video game we published were found to contain
undisclosed pertinent content, the ESRB could re-rate a game, retailers could refuse to sell it and demand that we accept the
return of any unsold copies or returns from customers, and consumers could refuse to buy it or demand that we refund their
money. This could have a material negative effect on our operating results and financial condition. In addition, we may be
exposed to litigation, administrative fines, and penalties, and our reputation could be harmed, which could affect sales of other
video games we sell. If any of these consequences were to occur, our business and financial performance could be significantly
harmed.

Content policies adopted by retailers, consumer opposition and litigation could negatively affect sales of our products.

Retailers, including digital storefronts and platform partners, may decline to sell interactive entertainment software
containing what they judge to be graphic violence or sexually explicit material or other content that they deem inappropriate for
their businesses. If retailers decline to sell our products based upon their opinion that they contain objectionable themes, graphic

violence or sexually explicit material or other generally objectionable content, or if any of our previously "M" rated series
products are rated "AO," we might be required to significantly change or discontinue particular titles or series, which in the case
of our best-selling Grand Theft Auto titles could seriously affect our business. Consumer advocacy groups have opposed sales
of interactive entertainment software containing objectionable themes, violence or sexual material or other objectionable
content by pressing for legislation in these areas and by engaging in public demonstrations and media campaigns. Additionally,
although lawsuits seeking damages for injuries allegedly suffered by third parties as a result of video games have generally
been unsuccessful in the courts, claims of this kind have been asserted against us from time to time and may be asserted and be
successful in the future. An increase in the number of lawsuits filed by the families of victims of violence may trigger
supplemental governmental scrutiny, damage our reputation, and negatively affect the sale of our products. Further, in 2019, the
World Health Organization included "gaming disorder" in the 11th revision of the International Classification of Diseases
(ICD-11), leading some to consider legislation and policies aimed at addressing this issue. In addition, public dialogue
concerning interactive entertainment may have an adverse impact on our reputation and our customers' willingness to purchase
our products.

Our results of operations or reputation may be harmed as a result of offensive consumer-created content.

We are subject to risks associated with the collaborative online features in our games which allow consumers to post
narrative comments, in real time, that are visible to other consumers. From time to time, objectionable and offensive consumer
content may be posted to a gaming or other site with online chat features or game forums which allow consumers to post
comments. We may be subject to lawsuits, governmental regulation or restrictions, and consumer backlash (including decreased
sales and harmed reputation), as a result of consumers posting offensive content. We may also be subject to consumer backlash
from comments made in response to postings we make on social media sites such as Facebook, YouTube and Twitter.

We are subject to risks and uncertainties of international trade, including fluctuations in the values of local foreign
currencies against the dollar.

Sales in international markets, primarily in Europe, have accounted for a significant portion of our net revenue. For the
fiscal year ended March 31, 2020, 42.5% of our net revenue was earned outside the U.S. We are continuing to execute on our
growth initiatives in Asia, where our strategy is to broaden the distribution of our existing products and expand our online
gaming presence, especially in China and South Korea. We are subject to risks inherent in foreign trade, including increased
credit risks, tariffs, and duties, fluctuations in foreign currency exchange rates, shipping delays, and international political,
regulatory and economic developments, all of which can have a significant influence on our operating results. Many of our
international sales are made in local currencies, which could fluctuate against the dollar. While we may use forward exchange
contracts to a limited extent to seek to mitigate foreign currency risk, our operating results could be adversely affected by
unfavorable foreign currency fluctuations.

We face risks from our international operations.

We are subject to certain risks because of our international operations, particularly as we continue to grow our business
and presence in Asia, Latin America, and other parts of the world. Changes to and compliance with a variety of foreign laws
and regulations may increase our cost of doing business and our inability or failure to obtain required approvals could harm our
international and domestic sales. Trade legislation in either the U.S. or other countries, such as a change in the current tariff
structures, import/export compliance laws, or other trade laws or policies, could adversely affect our ability to sell or to
distribute in international markets. Additionally, cultural differences may affect consumer preferences and as a result, some of
our “hit” products may not sell as well as they do in the U.S. Cultural differences may also require us to modify the content of
our products or the method by which we charge our customers. If we do not correctly assess consumer preferences in the
countries in which we sell our products, or respond to other risks related to our international operations, it could negatively
impact our business.

The current U.S. administration has voiced concerns about imports from countries potentially engaging in unfair trade
practices, increased tariffs on certain goods imported into the U.S. from those countries, including China and other countries to
which we sell products, and raised the possibility of imposing significant additional tariff increases. The announcement of
tariffs and proposed tariffs on imported products by the U.S. has triggered actions from certain foreign governments, including
China, and may trigger additional actions by those and other foreign governments that could have a negative impact on our
business. Further, the enforcement of regulations relating to mobile and other games with an online element in China remains
uncertain, and further changes, either in the regulation or their enforcement could have a negative impact on our business in
China. In order to operate in China, all games must have regulatory approval. A decision by the Chinese government to revoke
its approval for any of our games or to decline to approve any products we desire to sell in China in the future could have a
negative impact on our business.

We incur additional legal compliance costs associated with our international operations and could become subject to
legal penalties in foreign countries if we do not comply with local laws and regulations which may be substantially different
from those in the U.S. In many foreign countries, particularly in those with developing economies, it may be common to engage
in business practices that are prohibited by U.S. laws and regulations, such as the Foreign Corrupt Practices Act, and by local
laws, such as laws prohibiting corrupt payments to government officials. Although we implement policies and procedures
designed to ensure compliance with these laws, there can be no assurance that all of our employees, contractors and agents, as
well as those companies to which we outsource certain of our business operations, including those based in or from countries
where practices which violate such laws may be customary, will not take actions in violation of our policies. Any such
violation, even if prohibited by our policies, could have a material adverse effect on our business.

On January 31, 2020, the U.K. left the E.U. (“Brexit”) and entered a transition period expected to last until the end of
calendar 2020 during which the U.K. will continue to be subject to E.U. rules and regulations while it negotiates the future
terms of its relationship with the E.U. A substantial amount of uncertainty remains regarding the outcome of the ongoing
negotiations. We continue to assess and monitor the risks our business is likely to face as a result of Brexit. We are preparing to
mitigate those risks with operational and commercial changes to the extent possible and warranted. However, the legal and
regulatory landscape remains uncertain, and we have no assurance that such preparations will enable us to avoid a material
adverse impact on our business from Brexit. For example, Brexit could lead to legal uncertainty and potentially divergent
national laws and regulations as the U.K. determines which E.U. laws to replace and replicate. If there are changes to U.K.
immigration policy as a result of Brexit, this could affect our employees and their ability to move freely between the E.U.
member states for work related matters.

The effects of the U.K.'s future trade agreements with the E.U. or other nations could potentially disrupt the markets
we serve and may cause us to lose customers, distributors, and employees. Access to the single E.U. market and benefits from
the E.U. global trade deals depend on the U.K.'s future trade agreements with the E.U., and the terms of such agreements could
have a detrimental impact on our U.K. growth. Such a decline could also make our doing business in Europe more difficult,
which could negatively affect sales to consumers of our products. Without access to the single E.U. market, it may be more
challenging and costly to distribute our products in Europe.

If we are unable to protect the intellectual property relating to our software, the commercial value of our products will be
adversely affected and our competitive position could be harmed.

We develop proprietary software and have obtained the rights to publish and distribute software developed by third
parties. We attempt to protect our software and production techniques under patent, copyright, trademark and trade secret laws
as well as through contractual restrictions on disclosure, copying and distribution. Nonetheless, our software is susceptible to
piracy and unauthorized copying, and third parties may potentially exploit or misappropriate our intellectual property and
proprietary information, causing significant reputational damage. Unauthorized third parties, for example, may be able to copy
or to reverse engineer our software to obtain and use programming or production techniques that we regard as proprietary. Well
organized piracy operations have also proliferated in recent years, resulting in the ability to download pirated copies of our
software over the Internet. Although we attempt to incorporate protective measures into our software, piracy of our products
could negatively affect our future profitability. In addition, "cheating" programs or other unauthorized software tools and
modifications that enable consumers to cheat in games harm the experience of players who play fairly and could negatively
impact the volume of microtransactions or purchases of downloadable content. Also, vulnerabilities in the design of our
applications and of the platforms upon which they run could be discovered after their release. This may lead to lost revenues
from paying consumers or increased cost of developing technological measures to respond to these, either of which could
negatively affect our business.

If we infringe on or are alleged to infringe on the intellectual property rights of third parties, our business could be
adversely affected.

As our industry grows, we may be subject to an increasing amount of litigation that is common in the software
industry based on allegations of infringement or other alleged violations of patent, copyright, or trademarks. In addition, we
believe that interactive entertainment software will increasingly become the subject of claims that such software infringes on
the intellectual property rights of others with both the growth of online functionality and advances in technology, game content
and software graphics as games become more realistic. From time to time, we receive notices from third parties or are named in
lawsuits by third parties alleging infringement of their proprietary rights. Although we believe that our software and
technologies and the software and technologies of third-party developers and publishers with whom we have contractual
relations do not and will not infringe or violate proprietary rights of others, it is possible that infringement of proprietary rights
of others may occur. Any claims of infringement, with or without merit, could be time consuming, costly and difficult to
defend. Moreover, intellectual property litigation or claims could require us to discontinue the distribution of products, obtain a
license or redesign our products, which could result in additional substantial costs and material delays.

Our software is susceptible to errors, which can harm our financial results and reputation.

The technological advancements of new hardware platforms result in the development of more complex software
products. As software products become more complex, the risk of undetected errors in new products increases. We may need to
produce and distribute patches in order to repair such errors, which could be costly and may distract our developers from
working on new products. If, despite testing, errors are found in new products or releases after shipments have been made, we
may have to consider suspending distribution of defective products or offering refunds, and we could experience a loss of or
delay in timely market acceptance, product returns, loss of revenue, increases in costs relating to the repair of such errors and
damage to our reputation.

If we acquire or invest in other businesses, intellectual properties or other assets, we may be unable to integrate them with
our business, our financial performance may be impaired and/or we may not realize the anticipated financial and strategic
goals for such transactions.

If appropriate opportunities present themselves, we may acquire or make investments in businesses, intellectual
properties and other assets that we believe are strategic. We may not be able to identify, negotiate or finance any future
acquisition or investment successfully. Even if we do succeed in acquiring or investing in a business, intellectual property or
other asset, such acquisitions and investments involve a number of risks, including:

•

retaining key employees and maintaining the key business and customer relationships of the businesses we acquire;

cultural challenges associated with integrating employees from an acquired company or business into our organization;

the possibility that the combined company would not achieve the expected benefits, including any anticipated
operating and product synergies, of the acquisition as quickly as anticipated or that the costs of, or operational
difficulties arising from, an acquisition would be greater than anticipated;

significant acquisition-related accounting adjustments, particularly relating to an acquired company's deferred revenue,
that may cause reported revenue and profits of the combined company to be lower than the sum of their stand-alone
revenue and profits;

significant accounting charges resulting from the completion and integration of a sizable acquisition and increased
capital expenditures, including potential impairment charges incurred to write down the carrying amount of intangible
assets generated as a result of an acquisition;

the possibility that significant acquisitions, when not managed cautiously, may result in the over-extension of our
existing operating infrastructures, internal controls and information technology systems;

the possibility that we will not discover important facts during due diligence that could have a material adverse effect
on the value of the businesses we acquire, including the possibility that a change of control of a company we acquire
triggers a termination of contractual or intellectual property rights important to the operation of its business;

the need to integrate an acquired company's accounting, management information, human resource and other
administrative systems to permit effective management and timely reporting, and the need to implement or remediate
controls, procedures and policies appropriate for a public company in an acquired company that, prior to the
acquisition, lacked these controls, procedures and policies;

litigation or other claims in connection with, or inheritance of claims or litigation risks as a result of, an acquisition,
including claims from terminated employees, customers or other third parties; and

to the extent that we engage in strategic transactions outside of the U.S., we face additional risks, including risks
related to integration of operations across different cultures and languages, currency risks and the particular economic,
political and regulatory risks associated with specific countries.

Future acquisitions and investments could also involve the issuance of our equity and equity-linked securities
(potentially diluting our existing stockholders), the incurrence of debt, contingent liabilities or amortization expenses, write-offs
of goodwill, intangibles, or acquired in-process technology, or other increased cash and non-cash expenses such as stock-based
compensation. Any of the foregoing factors could harm our financial condition or prevent us from achieving improvements in
our financial condition and operating performance that could have otherwise been achieved by us on a stand-alone basis. Our
stockholders may not have the opportunity to review, vote on or evaluate future acquisitions or investments.

Our ability to acquire and maintain licenses to intellectual property, especially for sports titles, affects our revenue and
profitability. Competition for these licenses may make them more expensive and increase our costs.

Certain of our products are based on or incorporate intellectual property owned by others. For example, certain of our
2K products include rights licensed from major sports leagues and players' associations. Similarly, some of our other titles are
based on licenses of popular entertainment products. Competition for these licenses is intense. If we are unable to maintain and
renew these licenses or obtain additional licenses on reasonable economic terms or with significant commercial value, our
revenue and profitability could decline significantly. Competition for these licenses may also increase the advances, guarantees
and royalties that we must pay to the licensor, which could significantly increase our costs and adversely affect our profitability.
In addition, on certain intellectual property licenses, we are subject to guaranteed minimum payments, royalties or standards of
performance and may not be able to terminate these agreements prior to their stated expiration. If such licensed products do not
generate revenues in excess of such minimum guarantees, our profitability will be adversely affected.

We are subject to contractual covenants which place certain limitations on how we manage our business.

Our credit agreement (the "Credit Agreement") may limit our ability to take various actions, including incurring
additional debt, paying dividends, repurchasing shares, and acquiring or disposing of assets or businesses. In addition, we have
granted a security interest in connection with certain compensatory arrangements which limits our ability to incur senior debt in
excess of certain amounts. Accordingly, we may be restricted from taking actions that management believes would be desirable
and in the best interests of us and our stockholders. Our Credit Agreement also requires us to satisfy specified financial
covenants and comply with other affirmative and negative covenants. A breach of any of the covenants contained in our Credit
Agreement could result in an event of default, which would allow our lenders to pursue various remedies, including
accelerating the repayment of any outstanding indebtedness under our Credit Agreement.

Our business and products are subject to potential legislation. The adoption of such proposed legislation could limit the
retail market for our products.

Several proposals have been made for federal legislation to regulate our industry. Such proposals seek to prohibit the
sale of products containing certain content included in some of our games. If any such proposals are enacted into law, it may
limit the potential market for some of our games in the U.S., and adversely affect our business, financial condition and
operating results. Other countries, such as Germany, have adopted laws regulating content both in packaged games and those
transmitted over the Internet that are stricter than current U.S. laws. In the U.S., proposals have also been made by numerous
state legislators to regulate and prohibit the sale of interactive entertainment software products containing certain types of
violent or sexual content to under 17 or 18 audiences, such as the State of California's "ultraviolent video games law" that
sought to ban the sale or rental of violent video games to minors. While such legislation to date has been enjoined by industry
and retail groups or been found unconstitutional, the adoption into law of such legislation in federal and/or in state jurisdictions
in which we do significant business could severely limit the retail market for some of our games.

Change in government regulations relating to the Internet could have a negative impact on our business.

We rely on our consumers' access to significant levels of Internet bandwidth for the sale and digital delivery of our
content and the functionality of our games with online features. Changes in laws or regulations that adversely affect the growth,
popularity or use of the Internet, including laws affecting "net neutrality" or measures enacted in certain jurisdictions as a result
of the COVID-19 pandemic, could decrease the demand for our products and services or increase our cost of doing business.
Although certain jurisdictions have implemented laws and regulations intended to prevent Internet service providers from
discriminating against particular types of legal traffic on their networks, other jurisdictions may lack such laws and regulations
or repeal existing laws or regulations. For example, on December 14, 2017, the Federal Communications Commission voted to
repeal net neutrality regulations in the U.S. Given uncertainty around these rules,
including changing interpretations,
amendments, or repeal, coupled with the potentially significant political and economic power of local Internet service providers
and the relatively significant level of Internet bandwidth access our products and services require, we could experience
discriminatory or anti-competitive practices that could impede our growth, cause us to incur additional expenses, or otherwise
negatively affect our business.

We may be required to record a significant charge to earnings if our goodwill becomes impaired.

We are required under U.S. generally accepted accounting principles to review our goodwill for impairment at least
annually or more frequently when events or changes in circumstances indicate the carrying value may not be recoverable.
Factors that may be considered a change in circumstances, indicating a requirement to reevaluate whether our goodwill
continues to be recoverable, include a significant decline in stock price and market capitalization, slower growth rates in our
industry or other materially adverse events. We may be required to record a significant charge to earnings in our financial

statements during the period in which any impairment of our goodwill is determined. This may adversely affect our operating
results.

Our reported financial results could be adversely affected by the application of existing or future accounting standards to
our business as it evolves.

Our financial results are reported under the accounting policies promulgated by the SEC and national accounting
standards bodies and the methods, estimates, and judgments that we use in applying our accounting policies. For example,
standards regarding revenue recognition have and could further significantly affect the way we account for revenue related to
our products and services. We expect that an increasing number of our games will be supported with material post-release
activities, such as content updates and online-enabled features, and we could therefore be required to recognize more of the
related revenues for those games over a period of time rather than at the time of sale. Further, as we increase our downloadable
content and add new features to our online services, user playing patterns can affect our estimate of the service period, and we
could be required to recognize revenues, and defer related costs, over a shorter or longer period of time than we initially
allocated. As we enhance, expand and diversify our business and product offerings, the application of existing or future
financial accounting standards, particularly those relating to the way we account for revenue, could have a significant adverse
effect on our reported results although not necessarily on our cash flows.

We are subject to risks related to corporate and social responsibility and reputation.

Many factors influence our reputation including the perception held by our customers, business partners and other key
stakeholders. Our business faces increasing scrutiny related to environmental, social and governance activities. We risk damage
to our reputation if we fail to act responsibly in a number of areas, such as diversity and inclusion, environmental stewardship,
supply chain management, climate change, workplace conduct, human rights and philanthropy. Any harm to our reputation
could impact employee engagement and retention and the willingness of customers and our partners to do business with us,
which could have a material adverse effect on our business, results of operations and cash flows.

Climate change may have a long-term impact on our business.

Climate change could result in an increase in the frequency or severity of natural disasters, such as earthquakes, fires,
floods, or significant power outages and other catastrophic events. Such events may adversely impact critical infrastructure,
have the potential to disrupt our business, our third-party suppliers, or the business of our customers, and may cause us to
experience higher attrition, losses and additional costs to maintain or resume operations.

Risks relating to our common stock

For purposes of this section "Risks relating to our common stock," references to "the Company," "we," "our," and "us"

refer only to Take-Two Interactive Software, Inc. and not to its subsidiaries.

Additional issuances or sales of equity securities by us would dilute the ownership of our existing stockholders and could
adversely affect the market price of our common stock.

We may issue equity or equity-based securities in the future to facilitate acquisitions or strategic transactions, to adjust
our ratio of debt to equity, to fund expansion of our operations or for other purposes. To the extent we issue additional equity
securities, the percentage ownership of our existing stockholders would be reduced. The sale of substantial amounts of our
common stock could adversely affect its price. The sale or the availability for sale of a large number of shares of our common
stock in the public market could cause the price of our common stock to decline.

There is no guarantee that we will do additional share repurchases in the future.

The share repurchase program authorized by the Board of Directors, which authorized the repurchase of up to 14.2
million shares of our common stock and had 3.8 million shares available for repurchase as of the date of this filing, does not
obligate us to make any purchases at any specific time or situation. Discontinuing repurchases could adversely affect the price
of our common stock. The program may be suspended or discontinued at any time for any reason.

Our stock price has been volatile and may continue to fluctuate significantly.

The market price of our common stock historically has been, and we expect will continue to be, subject to significant
fluctuations. These fluctuations may be due to factors specific to us including those discussed in the risk factors in this section
as well as others not currently known to us or that we currently do not believe are material, to changes in securities analysts'
earnings estimates or ratings, to our results or future financial guidance falling below our expectations and analysts' and
investors' expectations, to factors affecting the computer, software, entertainment, media or electronics industries, or to national
or international economic conditions, such as the impact of COVID-19.

Stock markets, in general, have experienced over the years, and continue to experience significant price and volume
fluctuations that have affected market prices for companies such as ours and that may be unrelated or disproportionate to the
operating performance of the affected companies. These broad market and industry fluctuations may adversely affect the price
of our stock, regardless of our operating performance.

Delaware law, our charter documents, and provisions of our debt agreements may impede or discourage a takeover, which
could cause the market price of our shares to decline.

We are a Delaware corporation, and the anti-takeover provisions of Delaware law impose various impediments to the
ability of a third party to acquire control of us, even if a change in control would be beneficial to our existing stockholders. Our
Board of Directors has the power, without stockholder approval, to adopt a stockholder rights plan and/or to designate the terms
of one or more series of preferred stock and issue shares of preferred stock. The ability of our Board of Directors to create and
issue a new series of preferred stock and certain provisions of Delaware law, our certificate of incorporation and bylaws could
impede a merger, takeover or other business combination involving us or discourage a potential acquirer from making a tender
offer for our common stock, which, under certain circumstances, could reduce the market price of our common stock and the
value of any outstanding notes.

Our ability to use net operating loss and tax credit carryforwards to reduce future years' taxes could be substantially limited
under Internal Revenue Code Sections 382 and 383 if we experience an ownership change as defined in the Internal
Revenue Code Section 382.

Section 382 of the Internal Revenue Code contains rules that limit the ability of a company to use its net operating loss
and tax credit carryforwards in years after an ownership change, which is generally defined as any change in ownership of more
than 50% of its stock over a three-year testing period. These rules generally operate by focusing on ownership changes among
stockholders owning directly or indirectly 5% or more of the stock of a company and/or any change in ownership arising from a
new issuance of stock by the company. If, as a result of future transactions involving our common stock, including purchases or
sales of stock by 5% stockholders, we undergo cumulative ownership changes which exceed 50% over the testing period, our
ability to use our net operating loss and tax credit carryforwards would be subject to additional limitations under Sections 382
and 383.

Generally, if an ownership change occurs, the annual taxable income limitation on the use of net operating loss and tax
credit carryforwards is equal to the product of the applicable long-term tax-exempt rate and the value of the company's stock
immediately before the ownership change. Depending on the resulting limitation, a portion of our net operating loss and tax
credit carryforwards could expire before we would be able to use them.

Our inability to fully utilize any net operating losses or tax credit carryforwards to reduce tax liability in the future

could have a material and negative affect on our future financial position and results of operations.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

Our principal executive offices are located at 110 West 44th Street (also known as 1133 Avenue of the Americas),

New York, New York, in approximately 76,000 square feet of space under a lease expiring in December 2032.

We also lease approximately 64,000 square feet of space under a lease expiring in March 2023 at 622 Broadway, New

York, New York.

Take-Two Interactive Software Europe Ltd, our wholly-owned subsidiary, leases approximately 39,500 square feet of
office space in London, United Kingdom, which expires in December 2034, and approximately 12,500 square feet of office
space in Windsor, United Kingdom, which expires in January 2022. Rockstar North, our wholly-owned subsidiary, leases
72,000 square feet of office space in Edinburgh, Scotland, which expires in June 2024.

2K corporate offices and two development studios occupy approximately 123,000 square feet of leased office space in
Novato, California. The lease expires in June 2023 with respect to approximately 59,000 square feet and July 2025 with respect
to approximately 64,000 square feet.

In addition, our other subsidiaries lease office space in Sydney, Australia; Oakville, Montreal, and Parksville Canada;
Chengdu and Shanghai, China; Brno, Czech Republic; Paris, France; Munich, Germany; Budapest, Hungary; Bangalore, India;
Dublin, Ireland; Tokyo, Japan; Mexico City, Mexico, Breda, Netherlands; Auckland, New Zealand; Singapore; Seoul, South
Korea; Madrid and Barcelona, Spain; Luzerne, Switzerland; Taipei, Taiwan; Brighton, London, Lincoln, Leeds, and Oxford,

United Kingdom; and, in the United States, Carlsbad, Foothill Ranch, Petaluma, Moorpark, and San Mateo California; Sparks,
Maryland; Andover and Westwood, Massachusetts; Las Vegas, Nevada; Bethpage and New York, New York; and Kirkland,
Seattle and Vancouver, Washington.

For information regarding our lease commitments, see Note 14 to the Consolidated Financial Statements.

Item 3. Legal Proceedings

We are, or may become, subject to demands and claims (including intellectual property and employment related
claims) and are involved in routine litigation in the ordinary course of business which we do not believe to be material to our
business or financial statements. We have appropriately accrued amounts related to certain of these claims and legal and other
proceedings. While it is reasonably possible that a loss may be incurred in excess of the amounts accrued in our financial
statements, we believe that such losses, unless otherwise disclosed, would not be material.

Item 4. Mine Safety Disclosures

Not applicable.

PART II

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities

Market Information and Holders

Our common stock trades on the NASDAQ Global Select Market under the symbol "TTWO." The number of record

holders of our common stock was 61 as of May 7, 2020.

Dividend Policy

We have never declared or paid cash dividends. We currently anticipate that all future earnings will be retained to
finance the growth of our business and we do not expect to declare or pay any cash dividends in the foreseeable future. The
payment of dividends in the future is within the discretion of our Board of Directors and will depend upon future earnings,
capital requirements and other relevant factors. Our Credit Agreement requires us to meet certain incurrence tests prior to
paying a dividend. See "Liquidity and Capital Resources" under Item 7 for additional information on our Credit Agreement.

Securities Authorized for Issuance under Equity Compensation Plans

The table setting forth this information is included in Part III—Item 12, Security Ownership of Certain Beneficial

Owners and Management and Related Stockholder Matters.

Stock Performance Graph

This performance graph shall not be deemed "filed" for purposes of Section 18 of the Exchange Act or otherwise
subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of the
Company under the Exchange Act or the Securities Act of 1933.

The following line graph compares, from March 31, 2015 through March 31, 2020, the cumulative total stockholder
return on our common stock with the cumulative total return on the stocks comprising the NASDAQ Composite Index and the
stocks comprising a peer group index consisting of Activision Blizzard, Inc. and Electronic Arts Inc. The comparison assumes
$100 was invested on March 31, 2015 in our common stock and in each of the following indices and assumes reinvestment of
all cash dividends, if any, paid on such securities. We have not paid any cash dividends and, therefore, our cumulative total
return calculation is based solely upon stock price appreciation and not upon reinvestment of cash dividends. Historical stock
price is not necessarily indicative of future stock price performance.

Among Take-Two Interactive Software, Inc., the NASDAQ Composite Index and a Peer Group

Comparison of 5 Year Cumulative Total Return*

March 2020

* $100 invested on March 31, 2015 in stock or index - including reinvestment of dividends.

Take-Two Interactive Software, Inc.

$ 100.00

$ 147.96

$ 232.80

$ 384.05

$ 370.66

$ 465.87

2015

2016

2017

2018

2019

2020

March 31,

NASDAQ Composite Index

Peer Group

Issuer Purchases of Equity Securities

100.00

100.55

130.29

123.56

185.60

149.21

251.95

165.07

188.13

166.22

217.73

Share Repurchase Program—Our Board of Directors has authorized the repurchase of up to 14,217,683 shares of our
common stock. Under this program, we may purchase shares from time to time through a variety of methods, including in the
open market or through privately negotiated transactions, in accordance with applicable securities laws. Repurchases are subject
to the availability of stock, prevailing market conditions, the trading price of the stock, our financial performance and other
conditions. The program does not require us to repurchase shares and may be suspended or discontinued at any time for any
reason.

During the fiscal years ended March 31, 2020, 2019, and 2018 we repurchased 0, 3,715,642, and 1,512,557 shares of
our common stock in the open market, respectively, for $0.0 million, $362.4 million, and $154.8 million, respectively,
including commissions, as part of the program. As of March 31, 2020, we had repurchased a total of 10,399,529 shares of our
common stock under the program, and 3,818,154 shares of our common stock remained available for repurchase under the
share repurchase program. All of the repurchased shares are classified as Treasury stock in our Consolidated Balance Sheets.

Summary Table—The table below details the share repurchases that were made by us during the three months ended

March 31, 2020:

Period
January 1 - 31, 2020
February 1 - 28, 2020
March 1 - 31, 2020

Shares
purchased

Average price
per share

— $
— $
— $

—
—
—

Total number of shares
purchased as part of publicly
announced plans or programs
—
—
—

Maximum number of shares that
may yet be purchased under the
repurchase program

3,818
3,818
3,818

Item 6. Selected Financial Data

The following Selected Financial Data should be read in conjunction with our Consolidated Financial Statements and
related Notes, and Management's Discussion and Analysis of Financial Condition and Results of Operations included elsewhere
in this Annual Report on Form 10-K. (in thousands, except per share data)

STATEMENT OF OPERATIONS DATA:

2020

2019(1)

2018

2017

2016

Fiscal Year Ended March 31,

Net revenue

Gross profit

Net income (loss)

Earnings per share:

Basic:

Earnings (loss) per share:

Diluted:

Earnings (loss) per share:

BALANCE SHEET DATA:
Total assets
Long-term debt

$ 3,088,970

$ 2,668,394

$ 1,792,892

$ 1,779,748

$ 1,413,698

1,546,520

1,144,750

894,581

756,789

599,825

404,459

333,837

173,533

67,303

(8,302)

3.58

3.54

2.95

2.90

1.57

1.54

0.73

0.72

(0.10)

2020
$ 4,948,832
—

2019
$ 4,243,065
—

As of March 31,

2018
$ 3,737,841
8,068

2017
$ 3,149,154
251,929

2016
$ 2,590,277
497,935

(1) During fiscal 2019, we adopted Accounting Standards Update 2014-09, "Revenue from Contracts with Customers (Topic 606)," using a modified
retrospective method. Therefore, prior periods were not restated.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

Overview

Our Business

We are a leading developer, publisher, and marketer of interactive entertainment for consumers around the globe. We
develop and publish products principally through Rockstar Games, 2K, Private Division, and Social Point. Our products are
currently designed for console gaming systems, such as Sony's PS4, Microsoft's Xbox One, and Nintendo's Switch, and PC,
including smartphones and tablets. We deliver our products through physical retail, digital download, online platforms and
cloud streaming services.

We endeavor to be the most creative, innovative and efficient company in our industry. Our core strategy is to
capitalize on the popularity of video games by developing and publishing high-quality interactive entertainment experiences
across a range of genres. We focus on building compelling entertainment franchises by publishing a select number of titles for
which we can create sequels and incremental revenue opportunities through virtual currency, add-on content, and in-game
purchases. Most of our intellectual property is internally owned and developed, which we believe best positions us financially
and competitively. We have established a portfolio of proprietary software content for the major hardware platforms in a wide
range of genres, including action, adventure, family/casual, racing, role-playing, shooter, sports and strategy, which we
distribute worldwide. We believe that our commitment to creativity and innovation is a distinguishing strength, enabling us to
differentiate our products in the marketplace by combining advanced technology with compelling storylines and characters that
provide unique gameplay experiences for consumers. We have created, acquired or licensed a group of highly recognizable
brands to match the broad consumer demographics that we serve, ranging from adults to children and game enthusiasts to
casual gamers. Another cornerstone of our strategy is to support the success of our products in the marketplace through
innovative marketing programs and global distribution on platforms and through channels that are relevant to our target
audience.

Software titles published by our Rockstar Games label are primarily internally developed. We expect Rockstar Games,
our wholly-owned publisher of the Grand Theft Auto, Max Payne, Midnight Club, Red Dead Redemption, and other popular
franchises, to continue to be a leader in the action/adventure product category and to create groundbreaking entertainment. We
believe that Rockstar Games has established a uniquely original, popular cultural phenomenon with its Grand Theft Auto series,
which is the interactive entertainment industry's most iconic and critically acclaimed brand and has sold-in over 320 million
units. The latest installment, Grand Theft Auto V, has sold-in over 125 million units worldwide and includes access to Grand
Theft Auto Online. On October 26, 2018, Rockstar Games launched Red Dead Redemption 2, which has been a critical and
commercial success that set numerous entertainment industry records. To date, Red Dead Redemption 2 has sold-in more than
30 million units worldwide. Rockstar Games is also well known for developing brands in other genres, including the L.A. Noire,
Bully and Manhunt franchises. Rockstar Games continues to expand on our established franchises by developing sequels,
offering downloadable episodes, content, and virtual currency.

Our 2K label has published a variety of popular entertainment properties across all key platforms and across a range of
genres including shooter, action, role-playing, strategy, sports and family/casual entertainment. We expect 2K to continue to
develop new, successful franchises in the future. 2K's internally owned and developed franchises include the critically
acclaimed, multi-million unit selling BioShock, Mafia, Sid Meier's Civilization, and XCOM series. 2K also publishes successful
externally developed franchises, such as Borderlands. 2K's realistic sports simulation titles include our flagship NBA 2K series,
which continues to be the top-ranked NBA basketball video game, the WWE 2K professional wrestling series, and PGA Tour
2K. In March 2020, 2K announced a multi-year partnership with the National Football League encompassing multiple future
video games that will be non-simulation football game experiences and will launch starting in fiscal year 2022.

Our Private Division label is dedicated to bringing titles from top independent developers to market and is the
publisher and owner of Kerbal Space Program. During the fiscal year 2020, Private Division released The Outer Worlds and
Ancestors: The Humankind Odyssey, based on new IP from renowned industry creative talent. Additionally, Private Division,
has announced that Disintegration is planned for release in fiscal year 2021 and Kerbal Space Program 2 in fiscal year 2022.

Social Point develops and publishes popular free-to-play mobile games that deliver high quality, deeply-engaging
entertainment experiences, including its two most successful games, Dragon City and Monster Legends. In addition, Social
Point has a robust development pipeline with a number of exciting games planned for launch in the coming years.

We are continuing to execute on our growth initiatives in Asia, where our strategy is to broaden the distribution of our
existing products and expand our online gaming presence, especially in China and South Korea. 2K has secured a multi-year
license from the NBA to develop an online version of the NBA simulation game in China, Taiwan, South Korea, and Southeast
Asia. NBA 2K Online, our free-to-play NBA simulation game, which was co-developed by 2K and Tencent, is the top online PC
sports game in China with over 49 million registered users. We have released two iterations of NBA 2K Online and continue to
enhance the title with new features.

In February 2017, we expanded our relationship with the NBA through the creation of the NBA 2K League. Launched
in May 2018, this groundbreaking competitive gaming league is jointly owned by us and the NBA and consists of teams
operated by actual NBA franchises. The NBA 2K League follows a professional sports league format: head-to-head
competition throughout a regular season followed by a bracketed playoff system and a finals match-up that was held in August
in each of the NBA 2K League's first two seasons.

Trends and Factors Affecting our Business

Product Release Schedule.

Our financial results are affected by the timing of our product releases and the
commercial success of those titles. Our Grand Theft Auto products in particular have historically accounted for a significant
portion of our revenue. Sales of Grand Theft Auto products generated 23.0% of our net revenue for the fiscal year ended
March 31, 2020. The timing of our Grand Theft Auto product releases may affect our financial performance on a quarterly and
annual basis.

Economic Environment and Retailer Performance. We continue to monitor economic conditions, including the
impact of the COVID-19 pandemic, that may unfavorably affect our businesses, such as deteriorating consumer demand, delays
in development, pricing pressure on our products, credit quality of our receivables, and foreign currency exchange rates. The
COVID-19 pandemic has affected and may continue to affect our business operations, including our employees, customers,
partners, and communities, and there is substantial uncertainty in the nature and degree of its continued effects over time. In the
final quarter of fiscal year 2020, we noted a positive impact to our results that we believe was partly due to increased consumer
engagement with our products because of COVID-19 related business closures and movement restrictions, such as "shelter in
place" and "lockdown" orders, being implemented around the world, as well as the online accessibility and social nature of our
products. However, we cannot be certain as to the duration of these effects and the potential offsetting impacts of deteriorating
economic conditions and decreased consumer spending generally. We have developed and continue to develop plans to help
mitigate the negative impact of the pandemic on our business, such as our transition, based on our concern for the health and

safety of our teams, to working from home for the vast majority of our teams, which to date has resulted in minimal disruption.
However, these efforts may not be effective, and a protracted economic downturn may limit the effectiveness of our mitigation
efforts. Any of these considerations described above could cause or contribute to the risks described, above, in Item 1A of this
Form 10-K and could materially adversely affect our business, financial condition, results of operations, or stock price.
Therefore, the effects of COVID-19 will not be fully reflected in our financial results until future periods, and, at this time, we
are not able to predict its ultimate impact on our business.

Additionally, our business is dependent upon a limited number of customers that account for a significant portion of
our revenue. Our five largest customers accounted for 71.5%, 70.1% and 70.7% of net revenue during the fiscal years ended
March 31, 2020, 2019 and 2018, respectively. As of March 31, 2020 and 2019, five customers comprised 58.1% and 66.6% of
our gross accounts receivable, respectively, with our significant customers (those that individually comprised more than 10% of
our gross accounts receivable balance) accounting for 48.8% and 55.8% of such balance at March 31, 2020 and 2019,
respectively. We had two customers who accounted for 29.4% and 19.4% of our gross accounts receivable as of March 31,
2020 and two customers who accounted for 40.1% and 15.7% of our gross accounts receivable as of March 31, 2019. We did
not have any additional customers that exceeded 10% of our gross accounts receivable as of March 31, 2020 and 2019. The
economic environment has affected our customers in the past, and may do so in the future, including as a result of the
COVID-19 pandemic. Bankruptcies or consolidations of our large retail customers could seriously hurt our business, due to
uncollectible accounts receivables and the concentration of purchasing power among the remaining large retailers. The
COVID-19 pandemic may lead to increased consolidation as larger, better capitalized competitors will be in a stronger position
to withstand prolonged periods of economic downturn and sustain their business through the financial volatility. Certain of our
large customers sell used copies of our games, which may negatively affect our business by reducing demand for new copies of
our games. While the downloadable content that we now offer for certain of our titles may serve to reduce used game sales, we
expect used game sales to continue to adversely affect our business.

Hardware Platforms. We derive most of our revenue from the sale of products made for video game consoles
manufactured by third parties, such as Sony's PS4 and Microsoft's Xbox One, which comprised 74.7% of our net revenue by
product platform for the fiscal year ended March 31, 2020. The success of our business is dependent upon the consumer
acceptance of these platforms and the continued growth in the installed base of these platforms. When new hardware platforms
are introduced, such as those slated for release in calendar 2020 by Sony and Microsoft, demand for interactive entertainment
used on older platforms typically declines, which may negatively affect our business during the market transition to the new
consoles. The new Sony and Microsoft consoles are expected to provide "backwards compatibility" (i.e. the ability to play
games for the previous generation of consoles), which could mitigate the risk of such a decline. However, we cannot be certain
how backwards compatibility will affect demand for our products. Further, COVID-19 or other events, may impact the timing
of release and availability of these new consoles, which may also affect demand. We manage our product delivery on each
current and future platform in a manner we believe to be most effective to maximize our revenue opportunities and achieve the
desired return on our investments in product development. Accordingly, our strategy is to focus our development efforts on a
select number of the highest quality titles for these platforms, while also expanding our offerings for other platforms such as
tablets, smartphones, and online games.

Online Content and Digital Distribution.

The interactive entertainment software industry is delivering a growing
amount of content through digital online delivery methods. We provide a variety of online delivered products and offerings.
Virtually all of our titles that are available through retailers as packaged goods products are also available through direct digital
download (from websites we own and others owned by third parties) as well as a large selection of our catalog titles. In
addition, we aim to drive ongoing engagement and incremental revenue from recurrent consumer spending on our titles through
virtual currency, add-on content, and in-game purchases. We also publish an expanding variety of titles for tablets and
smartphones, which are delivered to consumers through digital download. As disclosed in our "Results of Operations," below,
net revenue from digital online channels comprised 77.0% of our net revenue for the fiscal year ended March 31, 2020. We
expect online delivery of games and game offerings to continue to grow and to become the primary part of our business over
the long-term.

Product Releases

We released the following key titles in fiscal year 2020:

Title

Publishing Label

Borderlands: Game of the Year Edition

NBA 2K Mobile

Ancestors: The Humankind Odyssey

Private Division

NBA 2K20

Borderlands 3

WWE 2K20

The Outer Worlds

Red Dead Redemption 2

NBA 2K20

Sid Meier's Civilization VI

Private Division

Rockstar Games

Internal or
External
Development

External

Internal

External

Internal

Platform(s)

PS4, Xbox One, PC

Android

PC (digital only)

PS4, Xbox One, Nintendo
Switch, PC, iOS, Android

Internal/External

PS4, Xbox One, PC

Internal

External

Internal

PS4, Xbox One, PC

Google Stadia

PS4, Xbox One

Ancestors: The Humankind Odyssey

Private Division

External

PS4, Xbox One

Borderlands 3

Borderlands 3 (for Steam and other
retailers)

Product Pipeline

Internal/External

Google Stadia

Internal/External

Date Released

April 3, 2019

April 17, 2019

August 27, 2019

September 6, 2019

September 13, 2019

October 22, 2019

October 25, 2019

November 5, 2019

November 19, 2019

November 22, 2019

December 6, 2019

December 17, 2019

March 13, 2020

We have announced the following key titles to date (this list does not represent all titles currently in development):

Title

XCOM: Chimera Squad

BioShock: The Collection

Borderlands Legendary Collection

XCOM 2 Collection

The Outer Worlds

Disintegration

PGA Tour 2K21

NBA 2K21

Private Division

Kerbal Space Program 2

Private Division

Fiscal 2020 Financial Summary

Publishing Label

Internal or
External
Development

Platform(s)

Expected Release Date

Internal

Internal/External

Switch

Internal/External

Switch

External

Internal

Switch

PS4, Xbox One, PC
PS4, Xbox One, Switch, PC,
Stadia
TBA

PS4, Xbox One, PC

April 24, 2020
(released)

May 29, 2020

June 5, 2020

June 16, 2020

August 21, 2020

Fall 2020

Fall 2021

Our Net revenue for fiscal year ended March 31, 2020 was led by titles from a variety of our top franchises, primarily
NBA 2K; Grand Theft Auto V and Grand Theft Auto Online; Red Dead Redemption 2 and Red Dead Online, which released on
PC in November 2019; Borderlands 3, which released in September 2019; and The Outer Worlds, which released in October
2019. Our Net revenue increased to $3,089.0 million, an increase of $420.6 million or 15.8% compared to the fiscal year ended
March 31, 2019.

For the fiscal year ended March 31, 2020, our Net income was $404.5 million, as compared to Net income of $333.8
million in the prior year. Diluted earnings per share for the fiscal year ended March 31, 2020 was $3.54, as compared to Diluted
income per share of $2.90 for the fiscal year ended March 31, 2019. Our operating income for the fiscal year ended March 31,
2020 increased compared to the operating income for fiscal year ended March 31, 2019, due primarily to higher Gross profit,
which was due primarily to higher revenue from the titles described above and lower internal royalties as a percentage of net
revenue, partially offset by higher Operating expenses primarily due to higher Selling and marketing expense.

At March 31, 2020, we had $1,993.4 million of Cash and cash equivalents and Restricted cash and cash equivalents,
compared to $1,392.0 million at March 31, 2019. The increase in Cash and cash equivalents and Restricted cash and cash
equivalents from March 31, 2019 was due primarily to Net cash provided by operating activities from sales primarily from the
previously mentioned titles, partially offset by investments in software development and licenses as well as royalty payments,

and to a lesser extent Net cash from investing activities. These net increases were offset by Net cash used in financing activities,
which was primarily related to tax payments related to net share settlements of our restricted stock.

Critical Accounting Policies and Estimates

Our most critical accounting policies, which are those that require significant judgment, include revenue recognition;
price protection and allowances for returns; capitalization and recognition of software development costs and licenses; fair
value estimates including valuation of goodwill, and intangible assets; valuation and recognition of stock-based compensation;
and income taxes. See Note 1 - Basis of Presentation and Significant Accounting Policies in the Notes to our Consolidated
Financial Statements in this Annual Report on Form 10-K.

Recently Adopted and Recently Issued Accounting Pronouncements

See Note 1 - Basis of Presentation and Significant Accounting Policies.

Operating Metric

Net Bookings

We monitor Net Bookings as a key operating metric in evaluating the performance of our business. Net Bookings is
defined as the net amount of products and services sold digitally or sold-in physically during the period and includes licensing
fees, merchandise, in-game advertising, strategy guides, and publisher incentives. Net Bookings were as follows:

2020

Fiscal Year Ended March 31,
2019

Increase/(decrease)

Increase/(decrease) %

Net Bookings

2,990,358

2,928,724

61,634

2.1 %

For the fiscal year ended March 31, 2020, Net Bookings increased by $61.6 million as compared to the prior year
period due primarily to Borderlands 3, which released in September 2019, Grand Theft Auto Online and Grand Theft Auto V,
our NBA 2K franchise, The Outer Worlds which released in October 2019, Red Dead Online, Civilization VI, and Ancestors:
The Humankind Odyssey, which released in August 2019, partially offset by a decrease in Net Bookings from Red Dead
Redemption 2, which released on PS4 and Xbox One in October 2018 and PC in November 2019.

Results of Operations

In this section, we discuss the results of our operations for the fiscal year ended March 31, 2020 compared to the
fiscal year ended March 31, 2019. For the comparison of fiscal year 2019 to fiscal year 2018, refer to Part II, Item 7
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-
K for the year ended March 31, 2019.

The following table sets forth, for the periods indicated, our statements of operations, net revenue by geographic

region, net revenue by platform, net revenue by distribution channel, and net revenue by content type:

Net revenue
Cost of goods sold
Gross profit

Selling and marketing
General and administrative
Research and development
Depreciation and amortization
Business reorganization
Total operating expenses
Income from operations
Interest and other, net
Loss on long-term investments
Income before income taxes
Provision for (benefit from) income taxes
Net income

Fiscal Year Ended March 31,

2020

2019

2018

$ 3,088,970
1,542,450
1,546,520
458,424
318,235
296,398
48,113
83
1,121,253
425,267
38,505
5,333
458,439
53,980
404,459

100.0 % $2,668,394
49.9 % 1,523,644
50.1 % 1,144,750
14.8 % 391,400
10.3 % 281,234
9.6 % 230,170
1.6 %
40,232
— %
(4,958)
36.3 % 938,078
13.8 % 206,672
1.2 %
26,113
0.2 %
—
14.8 % 232,785
1.7 % (101,052)
13.1 % $ 333,837

100.0 % $1,792,892
898,311
57.1 %
894,581
42.9 %
256,092
14.7 %
247,828
10.5 %
196,373
8.6 %
43,969
1.5 %
14,742
(0.2)%
759,004
35.2 %
135,577
7.7 %
1,048
1.0 %
—
— %
136,625
8.7 %
(3.8)%
(36,908)
12.5 % $ 173,533

100.0 %
50.1 %
49.9 %
14.3 %
13.8 %
11.0 %
2.5 %
0.8 %
42.3 %
7.6 %
0.1 %
— %
7.6 %
(2.1)%
9.7 %

Net revenue by geographic region:

United States
International

Net revenue by platform:

Console
PC and other

Net revenue by distribution channel:

Digital online
Physical retail and other
Net revenue by content:
Full game and other
Recurrent consumer spending

Fiscal Years ended March 31, 2020 and 2019

Fiscal Year Ended March 31,

2020

2019

2018

$ 1,775,682
1,313,288

57.5 % $1,426,906
42.5 % 1,241,488

53.5 % $1,052,313
740,579
46.5 %

$ 2,308,602
780,368

74.7 % $2,233,861
25.3 % 434,533

83.7 % 1,463,306
329,586
16.3 %

$ 2,378,563
710,407

77.0 % $1,681,609
23.0 % 986,785

63.0 % 1,130,946
661,946
37.0 %

58.7 %
41.3 %

81.6 %
18.4 %

63.1 %
36.9 %

$ 1,703,971
1,384,999

55.2 % $1,597,478
44.8 % 1,070,916

59.9 % $1,046,176
746,716
40.1 %

58.4 %
41.6 %

(thousands of dollars)
Net revenue

Software development costs and royalties(1)
Internal royalties
Product costs
Licenses

Cost of goods sold
Gross profit

2020
$ 3,088,970
611,198
483,697
277,147
170,408
1,542,450
$ 1,546,520

2019

% of net
revenue
100.0 % $2,668,394
19.8 % 449,198
15.7 % 610,804
9.0 % 322,148
5.5 % 141,494
49.9 % 1,523,644
50.1 % $1,144,750

Increase/
(decrease)

% of net
revenue
100.0 % $ 420,576
162,000
16.8 %
(127,107)
22.9 %
(45,001)
12.1 %
28,914
5.3 %
57.1 %
18,806
42.9 % $ 401,770

% Increase/
(decrease)

15.8 %
36.1 %
(20.8)%
(14.0)%
20.4 %
1.2 %
35.1 %

(1) Includes $154,031 and $149,075 of stock-based compensation expense in 2020 and 2019, respectively.

For the fiscal year ended March 31, 2020, net revenue increased by $420.6 million, as compared to the prior year. The
increase was due primarily to (i) $371.8 million in net revenue from Borderlands 3, which released in September 2019, (ii) an
increase of $185.5 million in net revenue from our NBA 2K franchise, (iii) $159.8 million in net revenue from The Outer
Worlds, which released in October 2019, and (iv) an increase of $46.6 million in net revenue from Red Dead Online. These
increases were partially offset by a decrease of $402.9 million in net revenue from Red Dead Redemption 2.

Net revenue from console games increased by $74.7 million and accounted for 74.7% of our total net revenue in the
fiscal year ended March 31, 2020, as compared to 83.7% in the prior year. The increase was due to an increase in net revenue
from Borderlands 3, our NBA 2K franchise, The Outer Worlds, and Red Dead Online. These increases were partially offset by a
decrease in net revenue from Red Dead Redemption 2. Net revenue from PC and other increased by $345.8 million and
accounted for 25.3% of our total net revenue in the fiscal year ended March 31, 2020, as compared to 16.3% in the prior year.
The increase was due to an increase in net revenue from Borderlands 3, Red Dead Redemption 2, which released for PC in
November 2019, and The Outer Worlds.

Net revenue from digital online channels increased by $697.0 million and accounted for 77.0% of our total net revenue
for the fiscal year ended March 31, 2020, as compared to 63.0% in the prior year. The increase was due to an increase in net
revenue from Borderlands 3, our NBA 2K franchise, and The Outer Worlds. Net revenue from physical retail and other channels
decreased by $276.4 million and accounted for 23.0% of our total net revenue for the fiscal year ended March 31, 2020, as
compared to 37.0% for the prior year. The decrease was due to a decrease in net revenue from Red Dead Redemption 2,
partially offset by an increase in net revenue from Borderlands 3.

Net revenue from full game and other increased by $106.5 million and accounted for 55.2% of net revenue for the
fiscal year ended March 31, 2020, as compared to 59.9% for the prior year. The increase was due to an increase in net revenue
from Borderlands 3, The Outer Worlds, and Civilization VI, partially offset by a decrease in net revenue from Red Dead
Redemption 2. Recurrent consumer spending is generated from ongoing consumer engagement and includes revenue from
virtual currency, add-on content, and in-game purchases. Net revenue from recurrent consumer spending increased by $314.1
million and accounted for 44.8% of net revenue for the fiscal year ended March 31, 2020, as compared to 40.1% for the prior
year. The increase was due to an increase in net revenue from our NBA 2K franchise, Borderlands 3, and Red Dead Online,
partially offset by a decrease in net revenue from Grand Theft Auto Online.

Gross profit as a percentage of net revenue for the fiscal year ended March 31, 2020 was 50.1%, as compared to 42.9%
in the prior year. The percentage increase was due primarily to lower internal royalties as a percentage of net revenue due to the
timing of when royalties are earned and our release slate.

Net revenue earned outside of the United States increased by $71.8 million and accounted for 42.5% of our total net
revenue in the fiscal year ended March 31, 2020, as compared to 46.5% in the prior year. The increase was due to an increase in
net revenue from Borderlands 3, The Outer Worlds, our NBA 2K franchise, Red Dead Online, Civilization VI, Ancestors: The
Humankind Odyssey, and Grand Theft Auto V, partially offset by a decrease in net revenue from Red Dead Redemption 2 and
Grand Theft Auto Online. Changes in foreign currency exchange rates decreased net revenue and gross profit by $11.5 million
and $4.0 million, respectively, in the fiscal year ended March 31, 2020 as compared to the prior year.

Operating Expenses

(thousands of dollars)

Selling and marketing

General and administrative

Research and development

Depreciation and amortization

Business reorganization
Total operating expenses

2020

% of net
revenue

2019

% of net
revenue

Increase/
(decrease)

% Increase/
(decrease)

$ 458,424

14.8 % $ 391,400

14.7 % $

318,235

296,398

48,113

10.3 % 281,234

10.5 %

9.6 % 230,170

1.6 %

40,232

8.6 %

1.5 %

67,024

37,001

66,228

7,881

17.1 %

13.2 %

28.8 %

19.6 %

83
$ 1,121,253

— %

(4,958)
36.3 % $ 938,078

5,041
(0.2)%
35.2 % $ 183,175

(101.7)%
19.5 %

Includes stock-based compensation expense, which was allocated as follows (in thousands):

Selling and marketing

General and administrative

Research and development

2020

2019

18,680

53,607

31,563

23,685

51,903

23,037

Foreign currency exchange rates decreased total operating expenses by $6.7 million in the fiscal year ended March 31,

2020 as compared to the prior year.

Selling and marketing

Selling and marketing expenses increased by $67.0 million in the fiscal year ended March 31, 2020 as compared to the
prior year, due primarily to $44.5 million in higher advertising and marketing expenses. Advertising and marketing expenses
were higher in the current year due primarily to Borderlands 3, Grand Theft Auto Online, Red Dead Online, and The Outer
Worlds, partially offset by lower advertising expenses for Red Dead Redemption 2. The increase was also due to higher
personnel expenses, primarily due to increased headcount.

General and administrative

General and administrative expenses increased by $37.0 million for the fiscal year ended March 31, 2020, as compared
to the prior year, due primarily to increases in (i) personnel expenses due to additional headcount, (ii) IT related expenses for
cloud-based services, (iii) indirect tax expenses, and (iv) rent expenses.

General and administrative expenses for the fiscal years ended March 31, 2020 and 2019 include occupancy expense
(primarily rent, utilities and office expenses) of $25.9 million and $22.0 million, respectively, related to our development
studios.

Research and development

Research and development expenses increased by $66.2 million for the fiscal year ended March 31, 2020, as compared
to the prior year, due primarily to (i) an increase in production and development expenses for titles for which technological
feasibility has not been established or for ongoing development for titles that have already been released and (ii) increased
personnel expense due to increased headcount.

Depreciation and amortization

Depreciation and amortization expenses increased by $7.9 million for the fiscal year ended March 31, 2020, as

compared to the prior year, due primarily to an increase in IT infrastructure costs.

Business Reorganization

During the fiscal year ended March 31, 2020, business reorganization expense increased by $5.0 million due to a
benefit in the prior year related to updating estimates for and completing our 2016 Plan and updating estimates for our 2018
Plan.

Interest and other, net

(thousands of dollars)

Interest income

Interest expense

Foreign currency exchange loss

Other

2020

% of net
revenue

2019

% of net
revenue

Increase/
(decrease)

% Increase/
(decrease)

47,341

1.5 % $

38,019

1.4 % $

(2,637)

(3,589)

(2,610)

(0.1)%

(8,032)

(505)

(3,369)

(0.3)%

— %

(0.1)%

9,322

5,395

24.5 %

(67.2)%

(3,084)

610.7 %

759

(22.5)%

47.5 %

Interest and other, net

38,505

1.2 % $

26,113

1.0 % $

12,392

Interest and other, net was income of $38.5 million for the fiscal year ended March 31, 2020, as compared to income
of $26.1 million for the fiscal year ended March 31, 2019. The increase was due primarily to a $9.3 million increase in interest
income due to the nature of our investments, higher invested balances, and higher interest rates on those investments.

Provision from income taxes

Our income tax expense was $54.0 million for the fiscal year ended March 31, 2020 as compared to a benefit of

$101.1 million for the fiscal year ended March 31, 2019.

When compared to the statutory rate of 21.0%, the effective tax rate of 11.8% for the fiscal year ended March 31, 2020
was due primarily to a $37.9 million tax benefit from tax credits anticipated to be utilized, $12.7 million from our geographic
mix of earnings, $11.9 million due to net deferred tax asset arising from a step up in tax basis related to the Federal Act on Tax
Reform and AVH (Old-Age and Survivors Insurance) Financing ("TRAF") enacted in Switzerland during the fiscal year,
discussed below, $9.2 million in changes in unrecognized tax benefits primarily due to audit settlements, and $8.4 million in
excess tax benefits from employee stock compensation. These benefits were partially offset by tax expense of $19.8 million
from the reversal of net deferred tax benefits relating to the Altera case, discussed below.

When compared to the statutory rate of 21%, the effective tax rate of (43.4)% for the fiscal year ended March 31, 2019
was primarily due to a $107.1 million tax benefit from changes in valuation allowance, a benefit of $35.0 million for tax credits,
$13.3 million from excess tax benefits from employee stock compensation, and $9.0 million from our geographic mix of
earnings, partially offset by tax expense from other immaterial items, which include the impact of the Tax Act.

The effective tax rate in the current year was higher compared to the prior year primarily due to decreased tax benefits

from (i) changes in valuation allowance and (ii) geographic mix of earnings.

The accounting for share-based compensation will increase or decrease our effective tax rate based upon the difference
between our share-based compensation expense and the deductions taken on our tax return, which depends upon the stock price
at the time of employee award vesting. Since we recognize excess tax benefits and shortfalls on a discrete basis, we anticipate
that our effective tax rate will vary from quarter to quarter depending on our stock price in each period.

We anticipate that additional excess tax benefits or shortfalls from employee stock compensation, tax credits, and
changes in our geographic mix of earnings could have a significant impact on our effective tax rate in the future. In addition, we
are regularly examined by domestic and foreign taxing authorities. Examinations may result in tax assessments in excess of
amounts claimed and the payment of additional taxes. We believe our tax positions comply with applicable tax law, and that we
have adequately provided for reasonably foreseeable tax assessments. It is possible that settlement of audits or the expiration of
the statute of limitations could have an impact on our effective tax rate in future periods.

On July 27, 2015, the U.S. Tax Court issued an opinion in Altera Corp. v. Commissioner, which concluded that related
parties in an intercompany cost-sharing arrangement are not required to share costs related to stock-based compensation. In
February 2016, the U.S. Internal Revenue Service appealed the decision to the U.S. Court of Appeals for the Ninth Circuit. On
June 7, 2019, the Ninth Circuit reversed the 2015 decision of the U.S. Tax Court. As a result of this decision, we are no longer
reflecting a net tax benefit within our financial statements related to the removal of stock-based compensation from our
intercompany cost-sharing arrangement. During the three months ended December 31, 2019, we removed the deferred tax asset
and a deferred tax liability associated with this matter resulting in a cumulative net discrete income tax expense of
$19.8 million. In February 2020, the taxpayer petitioned the U.S. Supreme Court to review the Ninth Circuit's decision and is
awaiting the Supreme Court's decision as to whether it will hear the case. We will continue to monitor the case.

On June 21, 2018, the U.S. Supreme Court issued its decision in South Dakota v. Wayfair, which overturned previous
case law that precluded states from requiring retailers to collect sales tax on sales made to in-state customers unless the retailer
had physical presence in the state. Although this case is limited to sales tax collection obligations, we continue to monitor the
potential impact of this decision on our state income tax footprint.

On May 19, 2019, a public referendum held in Switzerland approved the TRAF, which was effective for us on January
1, 2020. The tax reform abolished preferential tax regimes for holding companies, domicile companies and mixed companies at
the cantonal level. The TRAF allows the cantons to establish transition rules, the implementation of which may be subject to a
ruling from the canton. For the three months ended March 31, 2020, we recorded a deferred tax asset of $45.3 million offset by
a valuation allowance of $33.4 million rising from the Swiss cantonal tax basis step-up.

On March 27, 2020, the U.S. enacted the Coronavirus Aid, Relief and Economic Security Act (the "CARES Act"),
which provides numerous tax and other stimulus measures. Although we are currently reviewing the potential implications of
the CARES Act, we do not expect that it will have a material impact to our Consolidated Financial Statements.

As of March 31, 2020, we had gross unrecognized tax benefits, including interest and penalties, of $134.3 million, of
which $30.7 million would affect our effective tax rate if realized. For the fiscal year ended March 31, 2020, gross
unrecognized tax benefits decreased by $4.7 million.

We are no longer subject to audit for U.S. federal income tax returns for periods prior to our fiscal year ended
March 31, 2017 and state income tax returns for periods prior to the fiscal year ended March 31, 2016. With few exceptions, we
are no longer subject to income tax examinations in non-U.S. jurisdictions for years prior to fiscal year ended March 31, 2014.
Certain taxing authorities are currently examining our income tax returns for the fiscal years ended March 31, 2015 through
March 31, 2018.

Net income and earnings per share

For the fiscal year ended March 31, 2020, our net income was $404.5 million, as compared to $333.8 million in the
prior year. Diluted earnings per share for the fiscal year ended March 31, 2020 was $3.54, as compared to $2.90 for the fiscal
year ended March 31, 2019. Diluted weighted average shares outstanding of 114.1 million were 1.1 million lower compared to
the prior fiscal year due primarily to share repurchases in the last three quarters of fiscal year 2019.

Liquidity and Capital Resources

Our primary cash requirements have been to fund (i) the development, manufacturing and marketing of our published
products, (ii) working capital, (iii) acquisitions and (iv) capital expenditures. We expect to rely on cash and cash equivalents as
well as on short-term investments, funds provided by our operating activities, and our Credit Agreement to satisfy our working
capital needs.

Short-term Investments

As of March 31, 2020, we had $644.0 million of short-term investments, which are highly-liquid in nature and
represent an investment of cash that is available for current operations. From time to time, we may purchase additional short-
term investments depending on future market conditions and liquidity needs. As of March 31, 2020, based on the composition
of our investment portfolio and relatively lower interest rates as a result of the recent actions by central banks around the world,
including the interest rate cuts by the U.S. Federal Reserve, in response to the COVID-19 pandemic and related adverse
economic conditions, we anticipate investment yields may remain low, which would lower our future interest income. Such
impact is not expected to be material to our liquidity.

Credit Agreement

On February 8, 2019, we entered into an unsecured Credit Agreement (the “Credit Agreement”). The Credit
Agreement replaced our existing Credit Agreement, which was terminated on the same day. The Credit Agreement runs
through February 8, 2024. The Credit Agreement provides for an unsecured five-year revolving credit facility with
commitments of $200,000, including sublimits for (i) the issuance of letters of credit in an aggregate face amount of up to
$25,000 and (ii) borrowings and letters of credit denominated in Pounds Sterling, Euros and Canadian Dollars in an aggregate
principal amount of up to $25,000. In addition, the Credit Agreement contains uncommitted incremental capacity permitting the
incurrence of up to an additional $250,000 in term loans or revolving credit facilities. Loans under the Credit Agreement will
bear interest at a margin of (a) 0.125% to 0.750% above a certain base rate (5.50% at March 31, 2020), or (b) 1.125% to
1.750% above LIBOR (approximately 1.66% at March 31, 2020), which margins are determined by reference to our
consolidated total net leverage ratio.

As of March 31, 2020, there was $198.3 million available to borrow under the Credit Agreement and we had $1.7

million of letters of credit outstanding. At March 31, 2020, we had no outstanding borrowings under the Credit Agreement.

The Credit Agreement also includes, among other terms and conditions, maximum leverage ratio, minimum cash
reserves and, in certain circumstances, minimum interest coverage ratio financial covenants, as well as limitations on the
Company’s and each of its subsidiaries’ ability to create, incur, assume or be liable for indebtedness; dispose of assets outside
the ordinary course; acquire, merge or consolidate with or into another person or entity; create, incur or allow any lien on any of
its property; make investments; or pay dividends or make distributions, in each case subject to certain exceptions. In addition,
the Credit Agreement provides for certain events of default such as nonpayment of principal and interest when due thereunder,
breaches of representations and warranties, noncompliance with covenants, acts of insolvency and default on indebtedness held
by third parties (subject to certain limitations and cure periods).

Financial Condition

We are subject to credit risks, particularly if any of our receivables represent a limited number of customers or are
concentrated in foreign markets. If we are unable to collect our accounts receivable as they become due, it could adversely
affect our liquidity and working capital position.

Generally, we have been able to collect our accounts receivable in the ordinary course of business. We do not hold any
collateral to secure payment from customers. We have trade credit insurance on the majority of our customers to mitigate
accounts receivable risk.

A majority of our trade receivables are derived from sales to major retailers, including digital storefronts and platform
partners, and distributors. Our five largest customers accounted for 71.5%, 70.1%, and 70.7% of net revenue during the fiscal
years ended March 31, 2020, 2019, and 2018, respectively. As of March 31, 2020 and 2019, five customers accounted for
58.1% and 66.6% of our gross accounts receivable, respectively. Customers that individually accounted for more than 10% of
our gross accounts receivable balance comprised 48.8% and 55.8% of such balances at March 31, 2020 and 2019, respectively.
We had two customers who accounted for 29.4% and 19.4% of our gross accounts receivable as of March 31, 2020 and two
customers who accounted for 40.1%, and 15.7% of our gross accounts receivable as of March 31, 2019. We did not have any
additional customers that exceeded 10% of our gross accounts receivable as of March 31, 2020 and 2019. Based upon
performing ongoing credit evaluations, maintaining trade credit insurance on a majority of our customers and our past
collection experience, we believe that the receivable balances from these largest customers do not represent a significant credit
risk, although we actively monitor each customer's credit worthiness and economic conditions that may affect our customers'
business and access to capital. We are monitoring the current global economic conditions, including credit markets and other
factors as it relates to our customers in order to manage the risk of uncollectible accounts receivable, including as a result of
COVID-19.

We believe our current cash, short-term investments and projected cash flow from operations, along with availability
under our Credit Agreement will provide us with sufficient liquidity to satisfy our cash requirements for working capital, capital
expenditures, and commitments on both a short-term and long-term basis. Our liquidity and capital resources were not
materially affected by the COVID-19 pandemic and related volatility and slowdown in the global financial markets during the
fourth quarter of fiscal year 2020. For further discussion regarding the potential future impacts of the COVID-19 pandemic and
related economic conditions on our business, refer to "Part II, Item 1A, Risk Factors."

As of March 31, 2020, the amount of cash and cash equivalents held outside of the U.S. by our foreign subsidiaries
was $573.5 million. These balances are dispersed across various locations around the world. We believe that such dispersion
meets the business and liquidity needs of our foreign affiliates. In addition, we expect to have the ability to generate sufficient
cash domestically to support ongoing operations for the foreseeable future.

The Tax Act, as enacted in December 2017 includes a number of provisions, which generally establish a territorial-
style system for taxing foreign income of domestic multinational corporations. Our current intention is to reinvest indefinitely
earnings of our foreign subsidiaries, and therefore we have not recorded any tax liabilities associated with the repatriation of
foreign earnings.

Our Board of Directors has authorized the repurchase of up to 14.2 million shares of our common stock. Under this
program, we may purchase shares from time to time through a variety of methods, including in the open market or through
privately negotiated transactions, in accordance with applicable securities laws. Repurchases are subject to the availability of
stock, prevailing market conditions, the trading price of the stock, our financial performance and other conditions. The program
does not require us to repurchase shares and may be suspended or discontinued at any time for any reason. During the fiscal
years ended March 31, 2020, 2019, and 2018, we repurchased zero, 3.7 million, and 1.5 million shares of our common stock,
respectively, in the open market for $0.0 million, $362.4 million, and $154.8 million, respectively, including commissions as

part of the program. As of March 31, 2020, we had repurchased a total of 10.4 million shares of our common stock under the
program, and 3.8 million shares of our common stock remained available for repurchase under the share repurchase program.

Our changes in cash flows were as follows:

(thousands of dollars)

Fiscal Year Ended March 31,

2020

2019

2018

Net cash provided by operating activities

685,678

843,515

493,527

Net cash provided by (used in) investing activities

Net cash used in financing activities
Effects of foreign currency exchange rates on cash, cash equivalents,
and restricted cash and cash equivalents

Net change in cash, cash equivalents, and restricted cash and cash
equivalents

4,049

(77,453)

(223,576)

(463,685)

(271,827)

(281,467)

(10,868)

(10,639)

24,924

601,406

145,615

(34,843)

At March 31, 2020, we had 1,993.4 million of Cash, cash equivalents, and Restricted cash and cash equivalents,
compared to 1,392.0 million at March 31, 2019. The increase in Cash, cash equivalents, and Restricted cash and cash
equivalents from March 31, 2019 was due primarily to Net cash provided by operating activities from sales, partially offset by
investments in software development and licenses as well as royalty payments, and to a lesser extent Net cash from investing
activities. These net increases were offset by Net cash used in financing activities, which was primarily related to tax payments
related to net share settlements of our restricted stock.

Contractual Obligations and Commitments

We have entered into various agreements in the ordinary course of business that require substantial cash commitments

over the next several years. Generally, these include:

•

Software Development and Licensing: We make payments to third-party software developers that include contractual
payments to developers under several software development agreements that expire at various times through March
2025. Our aggregate outstanding software development commitments assume satisfactory performance by third-party
software developers. We also have licensing commitments that primarily consist of obligations to holders of
intellectual property rights for use of their trademarks, copyrights, technology or other intellectual property rights in
the development of our products.

• Marketing: We have certain minimum marketing support commitments where we commit to spend specified amounts

related to marketing our products. Marketing commitments expire at various times through September 2025.

•

Operating Leases: Our offices are occupied under non-cancelable operating leases expiring at various times through
December 2032. We also lease certain furniture, equipment and automobiles under non-cancelable leases expiring
through June 2023. Some of the leases have fixed rent increases and also include inducements to enter into the lease.
The effect of such amounts are deferred and recognized on a straight-line basis over the related lease term.

Purchase obligations: These obligations are primarily related to agreements to purchase services that are enforceable
and legally binding on us that specifies all significant terms, including fixed, minimum or variable pricing provisions;
and the approximate timing of the transactions, expiring at various times through March 2024.

A summary of annual minimum contractual obligations and commitments as of March 31, 2020 is as follows (in

thousands of dollars):

Fiscal Year Ending March 31,

Software
Development
and Licensing

Marketing

Operating
Leases

Purchase
Obligations

Total

2021

2022

2023

2024

2025

Thereafter

Total

151,123

11,891

34,119

38,477

144,975

150,775

122,285

69,188

52,880

38,881

40,914

89,260

35,528

24,788

36,352

34,056

26,919

21,549

83,801

23,910

12,503

1,239

947

—

235,610

244,118

238,248

239,703

127,212

161,469

691,226

241,262

236,796

77,076

1,246,360

•

Income Taxes: At March 31, 2020, we had recorded a liability for gross unrecognized tax benefits, including interest
and penalties, of $30.7 million, for which we are unable to make a reasonable and reliable estimate of the period in
which these liabilities will be settled with the respective tax authorities; therefore, these liabilities have not been
included in the contractual obligations table.

Legal and Other Proceedings: We are, or may become, subject to demands and claims (including intellectual property
and employment related claims) and are involved in routine litigation in the ordinary course of business which we do
not believe to be material to our business or financial statements. We have appropriately accrued amounts related to
certain of these claims and legal and other proceedings. While it is reasonably possible that a loss may be incurred in
excess of the amounts accrued in our financial statements, we believe that such losses, unless otherwise disclosed,
would not be material.

Off-Balance Sheet Arrangements

As of March 31, 2020 and 2019, we did not have any material relationships with unconsolidated entities or financial
parties, such as entities often referred to as structured finance or variable interest entities, which would have been established
for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. As such, we are
not exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in such relationships.

International Operations

Net revenue earned outside of the United States is principally generated by our operations in Europe, Asia, Australia,
Canada and Latin America. For the fiscal years ended March 31, 2020, 2019 and 2018, 42.5%, 46.5% and 41.3%, respectively,
of our net revenue was earned outside the United States. We are subject to risks inherent in foreign trade, including increased
credit risks, tariffs and duties, fluctuations in foreign currency exchange rates, shipping delays and international political,
regulatory and economic developments, all of which can have a significant effect on our operating results.

Fluctuations in Quarterly Operating Results and Seasonality

We have experienced fluctuations in quarterly and annual operating results as a result of the timing of the introduction
of new titles, variations in sales of titles developed for particular platforms, market acceptance of our titles, development and
promotional expenses relating to the introduction of new titles, sequels or enhancements of existing titles, projected and actual
changes in platforms, the timing and success of title introductions by our competitors, product returns, changes in pricing
policies by us and our competitors, the accuracy of retailers' forecasts of consumer demand, the size and timing of acquisitions,
the timing of orders from major customers, and order cancellations and delays in product shipment. Sales of our products are
also seasonal, with peak demand typically occurring in the fourth calendar quarter during the holiday season. For certain of our
software products with multiple performance obligations, we defer the recognition of our net revenue over an estimated service
period which generally ranges from 6 to 15 months. As a result, the quarter in which we generate the highest net bookings may
be different from the quarter in which we recognize the highest amount of net revenue. Quarterly comparisons of operating
results are not necessarily indicative of future operating results.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market risk is the potential loss arising from fluctuations in market rates and prices. Our market risk exposures

primarily include fluctuations in interest rates and foreign currency exchange rates.

Interest Rate Risk

Our exposure to fluctuations in interest rates relates primarily to our short-term investment portfolio and variable rate

debt under the Credit Agreement.

We seek to manage our interest rate risk by maintaining a short-term investment portfolio that includes corporate
bonds with high credit quality and maturities less than two years. Since short-term investments mature relatively quickly and
can be reinvested at the then-current market rates, interest income on a portfolio consisting of short-term securities is more
subject to market fluctuations than a portfolio of longer-term maturities. However, the fair value of a short-term portfolio is less
sensitive to market fluctuations than a portfolio of longer-term securities. We do not currently use derivative financial
instruments in our short-term investment portfolio. Our investments are held for purposes other than trading.

As of March 31, 2020, we had $644.0 million of short-term investments, which included $453.0 million of available-
for-sale securities. The available-for-sale securities were recorded at fair market value with unrealized gains or losses resulting
from changes in fair value reported as a separate component of accumulated other comprehensive income (loss), net of tax, in
stockholders' equity. We also had $1,357.7 million of cash and cash equivalents that are comprised primarily of money market

funds and bank-time deposits. We determined that, based on the composition of our investment portfolio, there was no material
interest rate risk exposure to our Consolidated Financial Statements or liquidity as of March 31, 2020.

Historically, fluctuations in interest rates have not had a significant effect on our operating results. Under our Credit
Agreement, loans will bear interest at a rate of (a) 0.250% to 0.750% above a certain base rate (5.50% at March 31, 2020) or
(b) 1.125% to 1.750% above LIBOR (approximately 1.66% at March 31, 2020), which rates are determined by reference to our
consolidated total net leverage ratio. Changes in market rates may affect our future interest expense if there is an outstanding
balance on our line of credit. At March 31, 2020, there were no outstanding borrowings under our Credit Agreement.

Foreign Currency Exchange Rate Risk

We transact business in foreign currencies and are exposed to risks resulting from fluctuations in foreign currency
exchange rates. Accounts relating to foreign operations are translated into United States dollars using prevailing exchange rates
at the relevant period end. Translation adjustments are included as a separate component of stockholders' equity on our
Consolidated Balance Sheets. For the fiscal years ended March 31, 2020 and 2019, our foreign currency translation adjustment
was a loss of $27.4 million and a loss of $28.8 million, respectively. We recognized a foreign currency exchange transaction
loss of $3.6 million, a loss of $0.5 million, and a loss of $3.0 million for the fiscal years ended March 31, 2020, 2019, and 2018,
respectively, in Interest and other, net in our Consolidated Statements of Operations.

Balance Sheet Hedging Activities

We use foreign currency forward contracts to mitigate foreign currency exchange rate risk associated with non-
functional currency denominated cash balances and inter-company funding loans, non-functional currency denominated
accounts receivable and non-functional currency denominated accounts payable. These transactions are not designated as
hedging instruments and are accounted for as derivatives whereby the fair value of the contracts is reported as either assets or
liabilities on our Consolidated Balance Sheets, and gains and losses resulting from changes in the fair value are reported in
interest and other, net, in our Consolidated Statements of Operations. We do not enter into derivative financial contracts for
speculative or trading purposes. At March 31, 2020, we had $52.6 million of forward contracts outstanding to buy foreign
currencies in exchange for U.S. dollars and $122.0 million of forward contracts outstanding to sell foreign currencies in
exchange for U.S. dollars all of which have maturities of less than one year. At March 31, 2019, we had $116.6 million of
forward contracts outstanding to buy foreign currencies in exchange for U.S. dollars and $87.8 million of forward contracts
outstanding to sell foreign currencies in exchange for U.S. dollars all of which have maturities of less than one year. For the
fiscal years ended March 31, 2020, 2019 and 2018, we recorded a loss of $1.0 million, a gain of $16.8 million, and a loss of
$19.5 million, respectively, related to foreign currency forward contracts in Interest and other, net on the Consolidated
Statements of Operations. As of March 31, 2020 and 2019, the fair value of these outstanding forward contracts was a loss of
$0.0 million and a loss $0.4 million, respectively, and is included in accrued and other current liabilities. The fair value of these
outstanding forward contracts is estimated based on the prevailing exchange rates of the various hedged currencies as of the end
of the period.

Our hedging programs are designed to reduce, but do not entirely eliminate, the effect of currency exchange rate
movements. We believe the counterparties to these foreign currency forward contracts are credit-worthy multinational
commercial banks and that the risk of counterparty nonperformance is not material. Notwithstanding our efforts to mitigate
some foreign currency exchange rate risks, there can be no assurance that our hedging activities will adequately protect us
against the risks associated with foreign currency fluctuations, which may be more volatile as a result of COVID-19. For the
fiscal year ended March 31, 2020, 42.5% of our revenue was generated outside the United States. Using sensitivity analysis, a
hypothetical 10% increase in the value of the U.S. dollar against all currencies would decrease revenue by 4.3%, while a
hypothetical 10% decrease in the value of the U.S. dollar against all currencies would increase revenue by 4.3%. In the opinion
of management, a substantial portion of this fluctuation would be offset by cost of goods sold and operating expenses incurred
in local currency.

Item 8. Financial Statements and Supplementary Data

The financial statements and supplementary data appear in a separate section of this report following Part IV. We
provide details of our valuation and qualifying accounts in Note 22 - Supplementary Financial Information to the Consolidated
Financial Statements. All schedules have been omitted since the information required to be submitted has been included on the
Consolidated Financial Statements or notes thereto or has been omitted as not applicable or not required.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Definition and Limitations of Disclosure Controls and Procedures

Our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange
Act of 1934, as amended (the "Exchange Act")) are designed to reasonably ensure that information required to be disclosed in
our reports filed under the Exchange Act is (i) recorded, processed, summarized, and reported within the time periods specified
in the Securities and Exchange Commission's rules and forms and (ii) accumulated and communicated to management,
including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding
required disclosures.

There are inherent limitations to the effectiveness of any system of disclosure controls and procedures. These
limitations include the possibility of human error, the circumvention or overriding of the controls and procedures and
reasonable resource constraints. In addition, because we have designed our system of controls based on certain assumptions,
which we believe are reasonable, about the likelihood of future events, our system of controls may not achieve its desired
purpose under all possible future conditions. Accordingly, our disclosure controls and procedures provide reasonable assurance,
but not absolute assurance, of achieving their objectives.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer and principal financial officer, has evaluated
the effectiveness of our disclosure controls and procedures at March 31, 2020, the end of the period covered by this report.
Based on this evaluation, the principal executive officer and principal financial officer concluded that, at March 31, 2020, our
disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by
us in the reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized, and reported on a timely
basis, and (ii) accumulated and communicated to management, including our principal executive officer and principal financial
officer, as appropriate to allow timely decisions regarding required disclosures.

Management's Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as
defined in Rule 13a-15(f) under the Exchange Act). Management conducted an evaluation of the effectiveness of our internal
control over financial reporting based on the criteria set forth in Internal Control—Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission 2013 framework ("COSO"). Based on this evaluation,
management has concluded that our internal control over financial reporting was effective as of March 31, 2020.

Our independent registered public accounting firm, Ernst & Young LLP, has issued an audit report on our internal
control over financial reporting. The report on the audit of internal control over financial reporting is included in this Form 10-K.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the fiscal quarter ended March 31, 2020,
which were identified in connection with management's evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under
the Exchange Act, that have materially affected, or are reasonably likely to materially affect, our internal control over financial
reporting. We have not experienced any material impact to our internal controls over financial reporting despite the fact that
most of our employees are working remotely due to the COVID-19 pandemic. We are continually monitoring and assessing the
effect of the COVID-19 situation on our internal controls to minimize the impact on their design and operating effectiveness.

Item 9B. Other Information

None.

PART III

Item 10. Directors, Executive Officers and Corporate Governance

The information required by this Item is incorporated herein by reference to the sections entitled "Proposal 1—
Election of Directors" and "Executive Compensation—Section 16(a) Beneficial Ownership Reporting Compliance" in our
definitive Proxy Statement (the "Proxy Statement") for the Annual Meeting of Stockholders to be held in 2020. We intend to
file the Proxy Statement within 120 days after the end of the fiscal year (i.e. on or before July 29, 2020). Our Code of Business
Conduct and Ethics applicable to our directors and all employees, including senior financial officers, is available on our website
at www.take2games.com. If we make any amendment to our Code of Business Conduct and Ethics that is required to be
disclosed pursuant to the Exchange Act, we will make such disclosures on our website.

Item 11. Executive Compensation

The information required by this Item is incorporated herein by reference to the section entitled "Executive

Compensation" in our Proxy Statement.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information required by this Item is incorporated herein by reference to the sections entitled "Voting Security
Ownership of Certain Beneficial Owners and Management" and "Equity Compensation Plan Information" in our Proxy
Statement.

Item 13. Certain Relationships and Related Transactions, and Director Independence

The information required by this Item is incorporated herein by reference to the section entitled "Certain Relationships

and Related Transactions" in our Proxy Statement.

Item 14. Principal Accounting Fees and Services

The information required by this Item is incorporated herein by reference to the section entitled "Independent Auditor

Fee Information" in our Proxy Statement.

PART IV

Item 15. Exhibits, Financial Statement Schedules

(a) The following documents are filed as part of this Report:

(i) Financial Statements. See Index to Financial Statements on page 53 of this Report.

(ii) Financial Statement Schedule. See Note 22 to the Consolidated Financial Statements.

(iii) Index to Exhibits:

Exhibit Number
3.1

Restated Certificate of Incorporation

Exhibit Description

3.1.1

3.1.2

3.1.3

3.1.4

3.2

3.3

3.4

4.1

10.1

10.2

10.3

10.4

10.5

10.6

10.7

10.8

10.9

10.10

10.11

10.12

10.13

10.14

Certificate of Amendment of Restated Certificate of
Incorporation, dated April 30, 1998
Certificate of Amendment of Restated Certificate of
Incorporation, dated November 17, 2003
Certificate of Amendment of Restated Certificate of
Incorporation, dated April 23, 2009
Certificate of Amendment of Restated Certificate of
Incorporation, dated September 21, 2012
Certificate of Designation of Series A Preferred Stock, dated
March 11, 1998
Certificate of Designation of Series B Preferred Stock, dated
March 26, 2008
Second Amended and Restated Bylaws of Take-Two
Interactive Software, Inc., effective as of June 20, 2019
Description of Registrant's Securities Registered Pursuant to
Section 12 of the Securities Exchange Act of 1934
Take-Two Interactive Software, Inc. Change in Control
Employee Severance Plan+
Amended and Restated Take-Two Interactive Software, Inc.
2009 Stock Incentive Plan, effective as of July 21, 2016+
Form of Employee Restricted Stock Agreement+
Form of Non-Employee Director Restricted Stock
Agreement+
Form of Employee Restricted Unit Agreement+
Form of Employee Restricted Unit Agreement+

Form of Employee Global Restricted Unit Agreement+
Form of Employee Restricted Unit Agreement +
Form of Employee Global Restricted Unit Agreement+
Form of Employee Global Restricted Unit Agreement
Pursuant to the Take-Two Interactive Software, Inc. 2009
Stock Incentive Plan+
Take-Two Interactive Software, Inc. 2017 Stock Incentive
Plan, effective as of September 15, 2017+
Take-Two Interactive Software, Inc. 2017 Stock Incentive
Plan Qualified RSU Sub-Plan for France, effective as of
September 15, 2017+
Take-Two Interactive Software, Inc. 2017 Second Amended
and Restated Global Employee Stock Purchase Plan,
effective as of March 28, 2019+
Form of Global Restricted Stock Unit Agreement Pursuant
to the Take-Two Interactive Software, Inc. 2017 Stock
Incentive Plan+

Filed
Herewith

Incorporated by Reference

Form
10-K

10-K

Filing Date
2/12/2004

2/12/2004

Exhibit
3.1

3.1.2

10-K

2/12/2004

3.1.3

8-K

4/23/2009

8-K

9/24/2012

3.1

10-K

2/12/2004

3.1.1

8-A12B

3/26/2008

8-K

6/25/2019

4.2

3.1

8-K

3/7/2008

10.1

14A

7/28/2016

Annex A

10-Q

6/5/2009

8/1/2012

10/30/2013

10.2

10.3

10.1

10.2

10.3

10.4

10.5

14A

7/27/2017

Annex B

14A

7/27/2017

Annex C

10-K

5/14/2019

10.13

10-Q

11/8/2017

10.4

Exhibit Number
10.15

10.16

10.17

10.18

10.19

10.20

10.21

10.22

10.23

10.24

10.25

10.26

10.27

10.28

10.29

10.30

10.31

10.32

10.33

10.34

Exhibit Description

Form of Global Restricted Stock Performance Unit
Agreement Pursuant to the Take-Two Interactive Software,
Inc. 2017 Stock Incentive Plan+
Form of Non-Employee Director Restricted Stock
Agreement Pursuant to the Take-Two Interactive Software
Inc. 2017 Stock Incentive Plan+
Form of Non-Employee Director Stock Grant Agreement
Pursuant to the Take-Two Interactive Software Inc. 2017
Stock Incentive Plan+
Employment Agreement, dated May 12, 2010, between the
Company and Lainie Goldstein+
First Amendment to Employment Agreement, dated
October 25, 2010, between the Company and Lainie
Goldstein+
Second Amendment to Employment Agreement, dated
August 27, 2012, between the Company and Lainie
Goldstein+
Third Amendment to Employment Agreement dated May 7,
2018, between the Company and Lainie Goldstein+
Employment Agreement, dated February 14, 2008, by and
between the Company and Karl Slatoff+
Employment Agreement dated January 28, 2015 between
the Company and Daniel Emerson+
Management Agreement, dated as of March 10, 2014, by
and between the Company and ZelnickMedia Corporation+
Restricted Unit Agreement, dated as of May 20, 2015, by
and between the Company and ZelnickMedia Corporation+
Amended and Restated Restricted Unit Agreement Pursuant
to the Take-Two Interactive Software, Inc. 2009 Incentive
Stock Plan, dated as of June 30, 2015+
Amendment to the Restricted Stock Unit Agreement, dated
as of March 31, 2016, by and between Take-Two Interactive
Software, Inc. and ZelnickMedia Corporation+
Restricted Unit Agreement, dated as of May 20, 2016, by
and between Take-Two Interactive Software, Inc. and
ZelnickMedia Corporation+
Amendment to Amended and Restated Restricted Unit
Agreement Pursuant to the Take Two Interactive Software,
Inc. 2009 Incentive Stock Plan, dated as of February 7,
2017+
Restricted Unit Agreement, dated as of May 25, 2017, by
and between Take-Two Interactive Software, Inc. and
ZelnickMedia Corporation+
Amendment to Amended and Restated Restricted Unit
Agreement Pursuant to the Take-Two Interactive Software,
Inc. 2009 Incentive Stock Plan, dated as of December 15,
2017+
Management Agreement, dated as of November 17, 2017,
by and between the Company and ZelnickMedia
Corporation+
Restricted Unit Agreement, dated as of April 13, 2018, by
and between Take-Two Interactive Software, Inc. and
ZelnickMedia Corporation+
Restricted Unit Agreement, dated as of April 15, 2019, by
and between Take-Two Interactive Software, Inc. and
ZelnickMedia Corporation +

Incorporated by Reference

Form
10-Q

Filing Date
11/8/2017

Exhibit
10.5

Filed
Herewith

10-Q

11/8/2017

10.6

10-Q

11/8/2017

10.7

8-K

5/14/2010

10.1

8-K

10/25/2010

10.1

10-Q

10/31/2012

10.6

10-Q

8/3/2018

8-K

2/15/2008

10-Q

2/6/2015

10.2

10.3

10.1

8-K

3/10/2014

10.1

S-3
ASR
10-Q

5/20/2015

10.2

8/10/2015

10.1

10-K

5/19/2016

10.50

S-3
ASR

5/20/2016

10.2

10-Q

2/8/2017

10.3

S-3
ASR

5/25/2017

10.2

10-Q

2/8/2018

10.4

8-K

11/22/2017

10.1

S-3
ASR

4/13/2018

10.2

4/15/2019

10.2

Incorporated by Reference

Filing Date
4/13/2020

Exhibit
10.2

Filed
Herewith

Form
S-3
ASR

10-K

5/14/2019

10.35

10-Q

11/8/2011

10.3

10-Q

6/5/2009

10.1

10-Q

2/3/2012

10.1

10-Q

2/6/2013

10.2

10-Q

2/4/2014

10.2

10-Q

10/30/2014

10.1

10-Q

2/8/2018

10.2

10-Q

2/4/2014

10-Q

8/6/2014

10.1

10-K

5/19/2016

10.48

10-K

5/19/2016

10.49

10-Q/A

5/23/2017

10.2

10-K

5/17/2018

10.55

10-Q

8/6/2019

10.1

10-K

5/24/2017

10.48

Exhibit Number
10.35

10.36

10.37

10.38

10.39

10.40

10.41

10.42

10.43

10.44

10.45

10.46

10.47

10.48

10.49

10.50

10.51

Exhibit Description

Restricted Unit Agreement dated as of April 13, 2020, by
and between Take-Two Interactive Software, Inc. and
ZelnickMedia Corporation +
Credit Agreement, dated as of February 8, 2019, by and
among Take-Two Interactive Software, Inc., the lender
parties thereto, Wells Fargo Bank, National Association, as
administrative agent for the Lenders, Wells Fargo
Securities, LLC and JP Morgan Chase Bank, N.A., as joint
lead arrangers and joint bookrunners, and JPMorgan Chase
Bank, N.A. as syndication agent

Xbox 360 Publisher License Agreement dated
November 17, 2005, between Microsoft Licensing, GP and
the Company*

Amendment to Xbox 360 Publisher License Agreement,
dated December 4, 2008, between Microsoft Licensing, GP
and the Company*

Amendment to the Xbox 360 Publisher License Agreement,
dated November 22, 2011, between the Company and
Microsoft Licensing, GP*

Amendment to the Xbox 360 Publisher License Agreement,
dated December 11, 2012, between the Company and
Microsoft Licensing, GP*

Amendment to the Xbox 360 Publisher License Agreement,
dated November 13, 2013, between the Company and
Microsoft Licensing, GP*

Amendment to the Xbox 360 Publisher License Agreement,
dated September 30, 2014, between Microsoft Corporation
and the Company*

Amendment to the Xbox 360 Publisher License Agreement,
signed on December 21, 2017, between Microsoft
Corporation and the Company*

Xbox One Publisher License Agreement dated October 31,
2013, between Microsoft Licensing, GP and the Company*
Amendment to the Xbox One Publisher License Agreement,
dated May 7, 2014, between Microsoft Licensing, GP and
the Company*

Amendment to the Xbox One Publisher License Agreement,
dated January 30, 2015, between Microsoft Corporation and
the Company*

Amendment No. 3 to the Xbox One Publisher License
Agreement, dated August 13, 2015, between Microsoft
Corporation and the Company*

Amendment No. 4 to the Xbox One Publisher License
Agreement, dated December 15, 2016, between Microsoft
Corporation and the Company*

Amendment No. 5 to the Xbox One Publisher License
Agreement, signed on January 10, 2018, between Microsoft
Corporation and the Company*

Amendment No. 6 to the Xbox One Publisher License
Agreement, dated as of April 9, 2019, between Microsoft
Corporation and the Company**

PlayStation Global Developer and Publisher Agreement,
dated as of March 23, 2017, between the Company and
certain of its affiliates and Sony Interactive Entertainment,
Inc., Sony Interactive Entertainment America LLC, and
Sony Interactive Entertainment Europe Ltd.*

Exhibit Number
10.52

10.53

10.54

10.55

10.56

10.57

10.58

21.1

23.1

31.1

31.2

32.1

32.2

Exhibit Description

Lease Agreement between the Company and Moklam
Enterprises, Inc. dated July 1, 2002
Sixth Lease Modification Agreement, dated January 18,
2012, between the Company and Moklam Enterprises, Inc.
Seventh Lease Modification Agreement, dated April 8,
2014, between the Company and Moklam Enterprises, Inc.
Eighth Lease Modification Agreement, dated as of
January 6, 2015, by and between Take-Two Interactive
Software, Inc. and Moklam Enterprises, Inc.

Ninth Lease Modification Agreement, dated as of December
15, 2015, by and between Take-Two Interactive
Software, Inc. and Moklam Enterprises, Inc.

Lease Agreement, dated as of December 12, 2016, by and
between Take-Two Interactive Software, Inc. and DOLP
1133 Properties II LLC for a premises with entrances at
1133 Avenue of the Americas and 110 West 44th Street,
New York, New York 10036
First Amendment to Lease, dated as of July 25, 2018 by and
between Take-Two Interactive Software, Inc. and DOLP
1133 Properties II LLC

Subsidiaries of the Company

Consent of Ernst & Young LLP

Chief Executive Officer Certification Pursuant to
Rules 13a-15(e) and 15d-15(e) under the Securities and
Exchange Act of 1934, as adopted pursuant to Section 302
of the Sarbanes-Oxley Act of 2002

Chief Financial Officer Certification Pursuant to
Rules 13a-15(e) and 15d-15(e) under the Securities and
Exchange Act of 1934, as adopted pursuant to Section 302
of the Sarbanes-Oxley Act of 2002

Chief Executive Officer Certification pursuant to 18 U.S.C.
Section 1350, as adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002

Chief Financial Officer Certification pursuant to 18 U.S.C.
Section 1350, as adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002

101.INS

The Instance Document does not appear in the Interactive
Data File because its XBRL tags are embedded
within the Inline XBRL document.

101.SCH

XBRL Taxonomy Extension Schema Document

101.CAL

101.LAB

101.PRE

101.DEF

104

XBRL Taxonomy Calculation Linkbase Document

XBRL Taxonomy Label Linkbase Document

XBRL Taxonomy Presentation Linkbase Document

XBRL Taxonomy Extension Definition Document

Cover Page Interactive Data File (formatted as Inline XBRL
and contained in Exhibit 101)

Filed
Herewith

Incorporated by Reference

Form
10-Q

Filing Date
9/16/2002

Exhibit
10.2

10-K

5/23/2012

10.45

10-K

5/14/2014

10.39

10-K

5/19/2016

10.47

10-Q

2/4/2016

10.1

10-Q

2/8/2017

10.1

10-Q

11/8/2018

10.1

_______________________________________________________________________________

Schedules omitted pursuant to item 601(b)(2) of Regulation S-K. The Company agrees to furnish supplementally a copy of any omitted schedule to the
SEC upon its request.

Represents a management contract or compensatory plan or arrangement.

Portions thereof were omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment that
was granted in accordance with Exchange Act Rule 24b-2.

†

Portions of this exhibit have been redacted in compliance with Regulation S-K Item 601(b)(10).

Attached as Exhibit 101 to this report are the following formatted in XBRL (Extensible Business Reporting
Language): (i) Consolidated Balance Sheets at March 31, 2020 and 2019, (ii) Consolidated Statements of Operations for the
fiscal years ended March 31, 2020, 2019 and 2018, (iii) Consolidated Statements of Comprehensive Income for the fiscal years
ended March 31, 2020, 2019 and 2018, (iv) Consolidated Statements of Cash Flows for the fiscal years ended March 31, 2020,
2019 and 2018, (v) Consolidated Statements of Stockholders' Equity for the fiscal years ended March 31, 2020, 2019 and 2018;
and (vi) Notes to the Consolidated Financial Statements.

Item 16. Form 10-K Summary

Not applicable.

TAKE-TWO INTERACTIVE SOFTWARE, INC.
FISCAL YEAR ENDED MARCH 31, 2020

INDEX TO FINANCIAL STATEMENTS

Reports of Independent Registered Public Accounting Firm

Consolidated Balance Sheets—At March 31, 2020 and 2019

Consolidated Statements of Operations—For the fiscal years ended March 31, 2020, 2019 and 2018

Consolidated Statements of Comprehensive Income—For the fiscal years ended March 31, 2020, 2019 and 2018

Consolidated Statements of Cash Flows—For the fiscal years ended March 31, 2020, 2019 and 2018

Consolidated Statements of Stockholders' Equity—For the fiscal years ended March 31, 2020, 2019 and 2018

Notes to the Consolidated Financial Statements

(All other items in this report are inapplicable)

Page

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Take-Two Interactive Software, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Take-Two Interactive Software, Inc. (the Company) as of
the related consolidated statements of operations, comprehensive income, cash flows, and
March 31, 2020 and 2019,
stockholders’ equity for each of the three years in the period ended March 31, 2020, and the related notes (collectively referred
to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material
respects, the financial position of the Company at March 31, 2020 and 2019, and the results of its operations and its cash flows
for each of the three years in the period ended March 31, 2020, in conformity with U.S. generally accepted accounting
principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the Company's internal control over financial reporting as of March 31, 2020, based on criteria established in
Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission
(2013 framework) and our report dated May 22, 2020 expressed an unqualified opinion thereon.

Adoption of ASU No. 2016-02

As discussed in Note 1 to the consolidated financial statements, the Company changed its method of accounting for leases
effective April 1, 2019 due to the adoption of Accounting Standards Update (ASU) No. 2016-02, Leases (Topic 842) and the
related amendments.

Adoption of ASU No. 2014-09

As discussed in Note 1 to the consolidated financial statements, the Company changed its method of accounting for revenue
recognition effective April 1, 2018 due to the adoption of Accounting Standards Update (ASU) No. 2014-09, Revenue from
Contracts with Customers (Topic 606), and the related amendments.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on
the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to
error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial
statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included
examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included
evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall
presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that
were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that
are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The
communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as
a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit
matters or on the accounts or disclosures to which they relate.

Description of
the Matter

Revenue recognition

As described in Note 1 to the consolidated financial statements, a significant portion of the Company’s
revenue recognized is for full game software products that management evaluates whether such products sold
have distinct and separable performance obligations. Such performance obligations can be licenses for
intellectual property that provides a functional offline gaming experience or game related services. If
multiple performance obligations are identified, management must estimate a standalone selling price for
each identified performance obligation which is used to allocate the full game software product transaction
price. Revenue for amounts allocated to offline functionality is recognized upon delivery of the product.
Separately, revenue for amounts allocated to the game related services is recognized ratably over an
estimated service period.

Significant judgment is exercised by the Company in identifying performance obligations within its full
game software products that should be accounted for separately in each revenue arrangement, estimating the
standalone selling price for each performance obligation and determining the service period to recognize
revenue over time. Auditing the identification of performance obligations for full game software products
requires complex auditor judgment as each full game software product has unique features that management
must determine whether to be accounted for separately. Auditing the judgments and estimates made by
management in determining the standalone selling prices for identified performance obligations is especially
challenging as the Company typically does not have observable standalone selling prices for each
performance obligation and must rely on an expected cost-plus margin methodology, taking into account
relevant cost assumptions including estimates of post-release support. Similarly, auditing the estimated
service period for the game related services is especially challenging as the Company must consider a variety
of data points. Such data points include the weighted average number of days between players’ first and last
days played online, known online trends, the service periods of the Company’s previously released products,
and, to the extent publicly available, the service periods of the Company’s competitors’ products that are
similar in nature.

How We
Addressed the
Matter in Our
Audit

We obtained an understanding, evaluated the design and tested the operating effectiveness of the Company's
controls over the revenue recognition process. We selected a sample of transactions and tested the
Company’s controls over evaluating and identifying performance obligations, determining the estimated
selling price and estimating the service period for revenue recognized over time.

Our audit procedures to test the Company’s identification of performance obligations included, among
others, inspecting product-specific marketing materials for promised full game software product features,
inspecting summaries of product features from Company personnel in product development roles, and
independently evaluating the full game software product to corroborate identified product features on a
the Company’s estimates of standalone selling price for
sample basis. Our audit procedures to test
performance obligations included, among others,
testing the underlying data used in management’s
calculations for completeness and accuracy as well as evaluating the reasonableness of significant
assumptions used and other factors utilized in making estimates of standalone selling price. For example, for
a selection of full game software products which included multiple performance obligations, we tested the
Company’s expected cost-plus margin analysis by testing the appropriateness of the assumptions used in the
analysis, including product development costs and forecasted post-release support costs, marketing costs and
licensing costs. Our audit procedures to test and evaluate the reasonableness of the Company’s estimated
service period included, among others, testing the completeness and accuracy of management’s player data
analysis, testing qualitative factors utilized such as reviewing online trends, comparing to similar or historical
products and analyzing competitor information.

Capitalized internally developed software costs

Description of
the Matter

the Company capitalizes internally
As described in Note 1 to the consolidated financial statements,
developed software development costs, subsequent to establishing technological feasibility of a product.
Amortization of internally developed software costs commences when a product is available for general
release and is recorded on a product-by-product basis in cost of goods sold. As noted in Note 8, the Company
had approximately $323.3 million of capitalized internally developed software as of March 31, 2020.

Auditing the Company’s capitalization of internally developed software costs was especially challenging
because management’s determination of which products qualify for capitalization and the timing of
establishing technological feasibility requires significant
judgment. The auditing of amortization of
capitalized internally developed software costs is especially challenging as the calculation is dependent on
judgments around the estimated economic life and estimates of total revenue of the product. Changes in
management’s assumptions of product revenue can have a material effect on amortization.

How We
Addressed the
Matter in Our
Audit

We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over
the internally developed software costs process. For example, we tested controls over management’s
determination of products that qualify for capitalization. We also tested management's review controls
related to the estimation of product revenue forecasts used in the calculation of amortization.

To test the Company’s capitalization of internally developed software costs, we performed audit procedures
that included, among others, inspecting underlying documentation to evaluate whether the costs to develop
products were capitalizable in accordance with the applicable accounting standards. This included inspecting
the product’s technical and game design documentation. We also held corroborative inquiries of Company
personnel in product development roles to assess the Company’s conclusions as to the technological
feasibility of its products. For a sample of transactions our audit procedures included, among others, testing
amortization source data by product, including current period and forecasted revenue by product. Our audit
procedures included assessing the reasonableness of the Company’s product specific revenue forecasts and
performing sensitivity analyses to evaluate the changes in amortization that would result from changes in the
Company's significant assumptions. We also tested the mathematical accuracy of management’s calculations
of amortization expense recognized in the consolidated financial statements.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2006.

New York, New York
May 22, 2020

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of Take-Two Interactive Software, Inc.

Opinion on Internal Control over Financial Reporting

We have audited Take-Two Interactive Software, Inc.'s (the Company) internal control over financial reporting as of March 31,
2020, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, the Company maintained,
in all material respects, effective internal control over financial reporting as of March 31, 2020, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the consolidated balance sheets of the Company as of March 31, 2020 and 2019, the related consolidated statements
of operations, comprehensive income, cash flows and stockholders’ equity for each of the three years in the period ended March
31, 2020, and the related notes and our report dated May 22, 2020 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting included in the accompanying Management's Report
on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control
over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be
independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all
material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material
weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and
performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a
reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Ernst & Young LLP

New York, New York
May 22, 2020

TAKE-TWO INTERACTIVE SOFTWARE, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)

Current assets:

ASSETS

Cash and cash equivalents
Short-term investments
Restricted cash and cash equivalents
Accounts receivable, net of allowances of $443 and $995 at March 31, 2020 and 2019,
respectively
Inventory
Software development costs and licenses
Deferred cost of goods sold
Prepaid expenses and other
Total current assets

Fixed assets, net
Right-of-use assets
Software development costs and licenses, net of current portion
Goodwill
Other intangibles, net
Deferred tax assets
Long-term restricted cash and cash equivalents
Other assets

Total assets

Current liabilities:

LIABILITIES AND STOCKHOLDERS' EQUITY

Accounts payable
Accrued expenses and other current liabilities
Deferred revenue
Lease liabilities

Total current liabilities
Non-current deferred revenue
Non-current lease liabilities
Other long-term liabilities

Total liabilities

Commitments and contingencies
Stockholders' equity:

Preferred stock, $0.01 par value, 5,000 shares authorized: no shares issued and
outstanding at March 31, 2020 and 2019
Common stock, $0.01 par value, 200,000 shares authorized; 135,927 and 134,602 shares
issued and 113,506 and 112,181 outstanding at March 31, 2020 and 2019, respectively

Additional paid-in capital

Treasury stock, at cost; 22,421 common shares at March 31, 2020 and 2019, respectively
Retained earnings
Accumulated other comprehensive loss

Total stockholders' equity
Total liabilities and stockholders' equity

See accompanying Notes.

March 31,

2020

2019

1,357,664
644,003
546,604

826,525
744,485
565,461

592,555
19,108
40,316
19,598
273,503
3,493,351
131,888
154,284
401,778
386,494
51,260
116,676
89,124
123,977
4,948,832

65,684
1,169,884
777,784
25,187
2,038,539
28,339
152,059
190,651
2,409,588

395,729
28,200
28,880
51,867
186,688
2,827,835
127,882
—
603,436
381,717
73,115
134,732
—
94,348
4,243,065

72,797
1,035,695
843,302
—
1,951,794
21,058
—
229,633
2,202,485

—

1,359

2,134,748

(820,572)
1,282,085
(58,376)
2,539,244
4,948,832

1,346

2,019,369

(820,572)
877,626
(37,189)
2,040,580
4,243,065

TAKE-TWO INTERACTIVE SOFTWARE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)

Net revenue
Cost of goods sold
Gross profit

See accompanying Notes.

Fiscal Year Ended March 31,

2020
3,088,970
1,542,450
1,546,520
458,424
318,235
296,398
48,113
83
1,121,253
425,267
38,505
5,333
458,439
53,980
404,459

3.58
3.54

$
$

2019
2,668,394
1,523,644
1,144,750
391,400
281,234
230,170
40,232
(4,958)
938,078
206,672
26,113
—
232,785
(101,052)
333,837

2.95
2.90

$
$

2018
1,792,892
898,311
894,581
256,092
247,828
196,373
43,969
14,742
759,004
135,577
1,048
—
136,625
(36,908)
173,533

1.57
1.54

$
$

TAKE-TWO INTERACTIVE SOFTWARE, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)

Net income

Other comprehensive (loss) income

Foreign currency translation adjustment

Cash flow hedges:

Change in unrealized gains

Reclassification to earnings

Tax effect on effective cash flow hedges

Change in fair value of cash flow hedges

Available-for-sale securities:

Net unrealized (loss) gain, net of taxes

Change in fair value of available-for-sale securities

Other comprehensive (loss) income

Comprehensive income

See accompanying Notes.

2020

March 31,

2019

2018

404,459

333,837

173,533

(27,445)

(28,803)

43,379

10,504

(1,689)

775

9,590

(3,332)

(3,332)
(21,187)

763

3,726

417

4,906

2,440

2,440
(21,457)

(8,153)

—

(2,038)

(10,191)

(1,778)

(1,778)
31,410

383,272

312,380

204,943

TAKE-TWO INTERACTIVE SOFTWARE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

Operating activities:

Net income

Adjustments to reconcile net income to net cash provided by operating activities:

Amortization and impairment of software development costs and licenses

Stock-based compensation

Amortization of intellectual property

Depreciation

Amortization of discount on Convertible Notes

Impairment of in-process research and development

Deferred income taxes

Impairment of long-term investments

Gain on redemption of Convertible Notes

Other, net

Changes in assets and liabilities:

Accounts receivable

Inventory

Software development costs and licenses

Prepaid expenses, other current and other non-current assets

Deferred revenue

Deferred cost of goods sold

Accounts payable, accrued expenses and other liabilities

Net cash provided by operating activities

Investing activities:

Change in bank time deposits

Proceeds from available-for-sale securities

Purchases of available-for-sale securities

Purchases of fixed assets

Purchase of long-term investments

Business acquisitions, net of cash acquired

Asset acquisition

Net cash provided by (used in) investing activities

Financing activities:

Tax payment related to net share settlements on restricted stock awards

Repurchase of common stock

Issuance of common stock

Other

Net cash used in financing activities

Effects of foreign currency exchange rates on cash, cash equivalents, and restricted cash
and cash equivalents

Net change in cash, cash equivalents, and restricted cash and cash equivalents

Cash, cash equivalents, and restricted cash and cash equivalents, beginning of year

Cash, cash equivalents, and restricted cash equivalents, end of year

Supplemental data:

Interest paid

Income taxes paid

Fiscal Year Ended March 31,

2020

2019

2018
(as Adjusted) (1)

404,459

333,837

173,533

167,925

257,881

20,990

47,628

—

(3,486)

5,333

—

3,741

(195,484)

8,489

(48,434)

(259,817)
(55,460)

32,180

299,733

685,678

196,720

400,635

(499,991)

(53,384)

(27,891)

(12,040)

—

4,049

(87,968)

—

10,515

—

(77,453)

(10,868)

601,406

1,391,986

1,993,392

4,750

27,998

201,221

247,700

23,879

39,726

—

110,603

—

584

(98,075)

(14,403)

(206,831)

(275,800)

304,713

(24,882)

201,152

843,515

(171,057)

325,133

(282,534)

(66,969)

—

(28,149)

—

(223,576)

(101,293)

(362,392)

—

(463,685)

(10,639)

145,615

1,246,371

1,391,986

5,265

19,280

77,887

116,349

34,830

32,202

15,662

11,257

(32,523)

—

(4,900)

6,953

(26,998)

3,917

(225,269)

(74,544)

198,397

(11,959)

198,733

493,527

(40,918)

241,012

(369,998)

(61,557)

(5,000)

(9,401)

(25,965)

(271,827)

(112,884)

(154,792)

—

(13,791)

(281,467)

24,924

(34,843)

1,281,214

1,246,371

4,121

8,790

(1) Prior period amounts have been adjusted retrospectively to reflect the adoption of ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash.
Refer to Note 1 for further discussion.

See accompanying Notes.

TAKE-TWO INTERACTIVE SOFTWARE, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(in thousands)

Common Stock

Amount

Additional
Paid-in
Capital

Treasury Stock

Amount

Retained
Earnings/
(Accumulated
Deficit)

Accumulated
Other
Comprehensive
Income (Loss)

Total
Stockholders'
Equity

Balance, March 31, 2017

119,813

1,198

$ 1,452,754

(17,192) $ (303,388) $

(99,694) $

(47,142) $

1,003,728

Net income

Change in cumulative foreign currency
translation adjustment

Net unrealized gain on available-for-sale
securities, net of taxes

Change in unrealized gains on cash flow
hedge, net

Stock-based compensation

Repurchased common stock

—

Issuance of restricted stock, net of forfeitures
and cancellations

2,151

—

293,214

—

(1,513)

(154,792)

(21)

Conversion of 1.00% Convertible Notes Due
2018

12,082

121

254,963

Net share settlement of restricted stock
awards

Adoption of ASU 2016-09, Stock Comp
Simplification

(1,303)

(13)

(112,871)

—

Balance, March 31, 2018

132,743

1,327

1,888,039

(18,705)

(458,180)

Net income

Change in cumulative foreign currency
translation adjustment

Net unrealized gain on available-for-sale
securities, net of taxes

Change in unrealized gains on cash flow
hedge, net

Stock-based compensation

Issuance of restricted stock, net of forfeitures
and cancellations

Repurchased common stock

Conversion of 1.00% Convertible Notes Due
2018

Net share settlement of restricted stock
awards

Impact from adoption of New Revenue
Accounting Standard

Employee share purchase plan settlement

—

2,345

—

377

—

219,460

(23)

—

8,108

(920)

(9)

(101,284)

—

5,069

—

(3,716)

(362,392)

—

Balance, March 31, 2019

134,602

1,346

2,019,369

(22,421)

(820,572)

Net income

Change in cumulative foreign currency
translation adjustment

Change in unrealized gains on cash flow
hedge, net

Net unrealized gain on available-for-sale
securities, net of taxes

Stock-based compensation

Issuance of restricted stock, net of forfeitures
and cancellations

Net share settlement of restricted stock
awards

Employee share purchase plan settlement

—

1,970

(771)

126

—

(8)

—

192,845

(19)

(87,960)

10,513

—

173,533

—

173,533

—

(323)

73,516

333,837

—

470,273

—

877,626

404,459

—

43,379

(1,778)

(10,191)

—

(10,191)

293,214

(154,792)

—

255,084

(112,884)

(323)

(15,732)

1,488,970

—

333,837

(33,456)

2,440

4,906

—

4,653

—

2,440

4,906

219,460

—

(362,392)

8,112

(101,293)

474,926

5,070

(37,189)

2,040,580

—

404,459

(27,445)

9,590

(3,332)

—

9,590

(3,332)

192,845

—

(87,968)

10,515

Balance, March 31, 2020

135,927

1,359

2,134,748

(22,421)

(820,572)

1,282,085

(58,376)

2,539,244

See accompanying Notes.

TAKE-TWO INTERACTIVE SOFTWARE, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except per share amounts)

1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Take-Two Interactive Software, Inc. (the "Company," "we," "us," or similar pronouns) was incorporated in the state of
Delaware in 1993. We are a leading developer, publisher, and marketer of interactive entertainment for consumers around the
globe. We develop and publish products principally through Rockstar Games, 2K, Private Division, and Social Point. Our
products are designed for console systems and personal computers, including smart phones and tablets, and are delivered
through physical retail, digital download, online platforms and cloud streaming services.

Principles of Consolidation

The Consolidated Financial Statements include the financial statements of the Company and its wholly-owned

subsidiaries. All inter-company balances and transactions have been eliminated in consolidation.

Reclassifications

Certain immaterial amounts in the financial statements of the prior years have been reclassified to conform to the

current year presentation for comparative purposes.

Use of Estimates

The preparation of

financial statements in conformity with U.S. generally accepted accounting principles
("U.S. GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities,
net revenue, and expense, as well as the disclosure of contingent assets and liabilities at the dates of the financial statements
during the reporting periods. Our most significant estimates relate to revenue recognition (see Note 2 - Revenue from Contracts
with Customers); the recoverability and amortization of software development costs, licenses, and intangible assets; the
realization of deferred income taxes; the valuation of stock-based compensation; and assumptions used in our goodwill
impairment tests. These estimates generally involve complex issues and require us to make judgments, involve analysis of
historical and the prediction of future trends, and are subject to change from period to period. Actual amounts could differ
significantly from these estimates, including as a result of the COVID-19 pandemic, which may affect economic conditions in a
number of different ways and result in uncertainty and risk. We consider transactions or events that occur after the balance sheet
date, but before the financial statements are issued, to provide additional evidence relative to certain estimates or to identify
matters that require additional disclosures.

Segments

We have one operating and reportable segment. Our operations involve similar products and customers worldwide.
Revenue earned is primarily derived from the sale of software titles, which are internally developed and developed by third
parties. Our Chief Executive Officer, who is our Chief Operating Decision Maker ("CODM"), manages our operations on a
consolidated basis--supplemented by sales information by product category, major product title, and platform--for the purpose
of evaluating performance and allocating resources. Financial information about our one segment and geographic areas is
included in Note 2 - Revenue from Contracts with Customers and Note 9 - Fixed Assets, Net.

Concentration of Credit Risk and Accounts Receivable

We maintain cash balances at several major financial institutions. While we attempt to limit credit exposure with any

single institution, balances often exceed insurable amounts.

If the financial condition and operations of our customers deteriorate, our risk of collection could increase
substantially. A majority of our trade receivables are derived from sales to major retailers, including digital storefronts and
platform partners, and distributors. Our five largest customers accounted for 71.5%, 70.1% and 70.7% of net revenue during the
fiscal years ended March 31, 2020, 2019 and 2018, respectively. One customer accounted for 31.9%, 31.3% and 30.2% of net
revenue during the fiscal years ended March 31, 2020, 2019, and 2018, respectively. A second customer accounted for 20.0%,
18.1%, and 17.6% of net revenue during the fiscal years ended March 31, 2020, 2019, and 2018 respectively. A third customer
accounted for 10.5% of net revenue during the fiscal year ended March 31, 2019. As of March 31, 2020 and 2019, five
customers accounted for 58.1% and 66.6% of our gross accounts receivable, respectively. Customers that individually
accounted for more than 10% of our gross accounts receivable balance comprised 48.8% and 55.8% of such balances at
March 31, 2020 and 2019, respectively. We had two customers who accounted for 29.4% and 19.4% of our gross accounts
receivable as of March 31, 2020 and two customers who accounted for 40.1% and 15.7% of our gross accounts receivable as of

March 31, 2019. We did not have any additional customers that exceeded 10% of our gross accounts receivable as of March 31,
2020 and 2019. Based upon performing ongoing credit evaluations, maintaining trade credit insurance on a majority of our
customers and our past collection experience, we believe that the receivable balances from these largest customers do not
represent a significant credit risk.

Cash and Cash Equivalents

We consider all highly liquid instruments purchased with original maturities of three months or less to be cash
equivalents. Our restricted cash and cash equivalents balances are primarily related to a dedicated account limited to the
payment of certain internal royalty obligations. Balances that are restricted from use for more than one year are classified as
non-current.

Short-term Investments

Short-term investments designated as available-for-sale securities are carried at fair value, which is based on quoted
market prices for such securities, if available, or is estimated on the basis of quoted market prices of financial instruments with
similar characteristics. Investments with original maturities greater than 90 days and remaining maturities of less than one year
are normally classified within Short-term investments on our Consolidated Balance Sheets. In addition, investments with
maturities beyond one year at the time of purchase that are highly liquid in nature and represent the investment of cash that is
available for current operations are classified as short-term investments.

Unrealized gains and losses of available-for-sale securities are excluded from earnings and are reported as a
component of Other comprehensive income (loss), net of tax, until the security is sold, the security has matured, or we
determine that the fair value of the security has declined below its adjusted cost basis and the decline is other-than-temporary.
Realized gains and losses on short-term investments are calculated based on the specific identification method and would be
reclassified from accumulated other comprehensive loss to Interest and other, net.

Short-term investments are evaluated for impairment quarterly. We consider various factors in determining whether we
should recognize an impairment charge, including the credit quality of the issuer, the duration that the fair value has been less
than the adjusted cost basis, the severity of the impairment, the reason for the decline in value, and our intent to sell and ability
to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value. If we conclude that
an investment is other-than-temporarily impaired, we recognize an impairment charge at that time in the Consolidated
Statements of Operations. Determining whether the decline in fair value is other-than-temporary requires management
judgment based on the specific facts and circumstances of each security. The ultimate value realized on these securities is
subject to market price volatility until they are sold.

Inventory

Inventory consists of materials, including manufacturing royalties paid to console manufacturers, and is stated at the
lower of weighted average cost or net realizable value. Estimated product returns are included in the inventory balance at their
cost. We regularly review inventory quantities on-hand and in the retail channels and record an inventory provision for excess
or obsolete inventory based on the future expected demand for our products. Significant changes in demand for our products
would affect management's estimates in establishing our inventory provision. We write down inventory based on excess or
obsolete inventories determined primarily by future anticipated demand for our products. Inventory write-downs are measured
as the difference between the cost of the inventory and market value, based upon assumptions about future demand that are
inherently difficult to assess.

Software Development Costs and Licenses

Capitalized software development costs include direct costs incurred for internally developed titles and payments made

to third-party software developers under development agreements.

We capitalize internal software development costs (including specifically identifiable payroll expense, employee
stock-based compensation, and incentive compensation costs related to the completion and release of titles, as well as third-
party production and other content costs), subsequent to establishing technological feasibility of a software title. Technological
feasibility of a product includes the completion of both technical design documentation and game design documentation.
Significant management judgments are made in the assessment of when technological feasibility is established. For products
where proven technology exists, this may occur early in the development cycle. Technological feasibility is evaluated on a
product-by-product basis. Prior to establishing technological feasibility of a product, we record any costs incurred by third-party
developers as research and development expenses.

We enter into agreements with third-party developers that require us to make payments for game development and
production services. In exchange for our payments, we receive the exclusive publishing and distribution rights to the finished

game title as well as, in some cases, the underlying intellectual property rights. Such agreements typically allow us to fully
recover these payments to the developers at an agreed upon royalty rate earned on the subsequent sales of such software, net of
any agreed upon costs. Subsequent to establishing technological feasibility of a product, we capitalize all development and
production service payments to third-party developers as software development costs and licenses. We typically enter into
agreements with third-party developers after completing the technical design documentation for our products and therefore
record the design costs leading up to a signed development contract as research and development expense. When we contract
with third-party developers, we generally select those that have proven technology and experience in the genre of the software
being developed, which often allows for the establishment of technological feasibility early in the development cycle. In
instances where the documentation of the design and technology are not in place prior to an executed contract, we monitor the
software development process and require our third-party developers to adhere to the same technological feasibility standards
that apply to our internally developed products.

Licenses consist of payments and guarantees made to holders of intellectual property rights for use of their trademarks,
copyrights or other intellectual property rights in the development of our products. Agreements with license holders generally
provide for guaranteed minimum payments for use of their intellectual property. Certain licenses, especially those related to our
sports products, extend over multi-year periods and encompass multiple game titles. In addition to guaranteed minimum
payments, these licenses frequently contain provisions that could require us to pay royalties to the license holder based on pre-
agreed unit sales thresholds.

Amortization of capitalized software development costs and licenses commences when a product is available for
general release and is recorded on a title-by-title basis in cost of goods sold. For capitalized software development costs, annual
amortization is calculated using (1) the proportion of current year revenue to the total revenue expected to be recorded over the
life of the title or (2) the straight-line method over the remaining estimated life of the title, whichever is greater. For capitalized
licenses, amortization is calculated as a ratio of (1) current year revenue to the total revenue expected to be recorded over the
remaining estimated life of the title or (2) the contractual royalty rate based on actual net product sales as defined in the
licensing agreement, whichever is greater. Amortization periods for our software products generally range from 12 to 36
months.

We evaluate the future recoverability of capitalized software development costs and licenses on a quarterly basis.
Recoverability is primarily assessed based on the title's actual performance. For products that are scheduled to be released in the
future, recoverability is evaluated based on the expected performance of the specific products to which the cost or license
relates. We use a number of criteria in evaluating expected product performance,
including historical performance of
comparable products developed with comparable technology, market performance of comparable titles, orders for the product
prior to its release, general market conditions, and past performance of the franchise. When we determine that capitalized cost
of the title is unlikely to be recovered by product sales, an impairment of software development and license costs capitalized is
charged to cost of goods sold in the period in which such determination is made.

We have profit and unit sales based internal royalty programs that allow selected employees to participate in the
success of software titles that they assist in developing. Royalties earned under this program are recorded as a component of
Cost of goods sold in the period earned. Amounts earned and not yet paid are reflected within the software development
royalties component of Accrued expenses and other current liabilities on our Consolidated Balance Sheets.

Fixed Assets, net

Office equipment, furniture and fixtures are depreciated using the straight-line method over their estimated useful life
of five years. Computer equipment and software are generally depreciated using the straight-line method over three to five
years. Leasehold improvements are amortized over the lesser of the term of the related lease or the useful life of the underlying
asset, typically seven years. The cost of additions and improvements are capitalized, and repairs and maintenance costs are
charged to operations, in the periods incurred. When depreciable assets are retired or sold, the cost and related allowances for
depreciation are removed from the accounts and the gain or loss, if any, is recognized. The carrying amounts of these assets are
recorded at historical cost.

Leases

In February 2016, the Financial Accounting Standards Board (“FASB”) issued new guidance related to the accounting
for leases codified under Topic 842, Leases. The new lease accounting standard replaced all prior U.S. GAAP guidance on this
topic as codified principally under Topic 840, Leases. The new standard, among other things, requires a lessee to classify a
lease as either an operating or financing lease and to recognize a lease liability and a right-of-use (“ROU”) asset for its leases.
On April 1, 2019, we adopted the new lease accounting standard using the alternative transition approach provided in ASU
2018-11, “Leases (Topic 842) - Targeted Improvements,” which allows initial application of the new standard using the

modified retrospective method. Refer to the Recently Adopted Accounting Pronouncements section below for the impact of
adoption on our Consolidated Financial Statements.

We determine if an arrangement is a lease at contract inception. If there is an identified asset in the contract (either
explicitly or implicitly) and we have control over its use, the contract is (or contains) a lease. In certain of our lease
arrangements, primarily those related to our data center arrangements, judgment is required in determining if a contract contains
a lease. For these arrangements, there is judgment in evaluating if the arrangement provides us with an asset that is physically
distinct, or that represents substantially all of the capacity of the asset, and if we have the right to direct the use of the asset.
Lease assets and liabilities are recognized based on the present value of future lease payments over the lease term at the
commencement date. Included in the lease liability are future lease payments that are fixed, in-substance fixed, or payments
based on an index or rate known at the commencement date of the lease. Variable lease payments are recognized as lease
expenses as incurred. The operating lease ROU asset also includes any lease payments made prior to commencement, initial
direct costs incurred, and lease incentives received.

As most of our leases do not provide an implicit rate, we generally use our incremental borrowing rate in determining
the present value of future lease payments. The incremental borrowing rate represents the rate required to borrow funds over a
similar term to purchase the leased asset and is based on an unsecured borrowing rate and risk-adjusted to approximate a
collateralized rate at the commencement date of the lease.

In determining our lease liability, the lease term includes options to extend or terminate the lease when it is reasonably
certain that we will exercise such option. For operating leases, the lease expense for minimum lease payments is recognized on
a straight-line basis over the lease term. Lease modifications result in remeasurement of the lease liability. Leases with an initial
term of 12 months or less are not recorded on the balance sheet, and we recognize lease expense for these leases on a straight-
line basis over the lease term. We do not separate non-lease components from the related lease components.

Goodwill and Intangible Assets

Goodwill is the excess of purchase price paid over identified intangible and tangible net assets of acquired companies.
Intangible assets consist of intellectual property, developed game technology, analytics technology, user base, trade names, and
in-process research and development. Certain intangible assets acquired in a business combination are recognized as assets
apart from goodwill.

We use either the income, cost or market approach to aid in our conclusions of such fair values and asset lives. The
income approach presumes that the value of an asset can be estimated by the net economic benefit to be received over the life of
the asset, discounted to present value. The cost approach presumes that an investor would pay no more for an asset than its
replacement or reproduction cost. The market approach estimates value based on what other participants in the market have
paid for reasonably similar assets. Although each valuation approach is considered in valuing the assets acquired, the approach,
or combination of approaches, ultimately selected is based on the characteristics of the asset and the availability of information.

We test our goodwill for impairment annually, or more frequently if events and circumstances indicate the fair value of
a reporting unit may be below its carrying amount. A reporting unit is defined as an operating segment or one level below an
operating segment. We have determined that we operate in two reporting units, which are components of our operating
segment. In the evaluation of goodwill for impairment, we have the option to first perform a qualitative assessment to determine
if the fair value of a reporting unit is more likely than not (i.e., a likelihood of more than 50%) less than the carrying value
before performing a quantitative impairment test.

When a qualitative assessment is not used, or if the qualitative assessment is not conclusive, a quantitative impairment
analysis for goodwill is performed at the reporting unit level. The quantitative goodwill impairment test is used to identify
potential impairment by comparing the fair value of a reporting unit with its carrying amount, including goodwill. If the
carrying value exceeds the fair value, an impairment charge is recognized equal to the difference between the carrying value of
the reporting unit and its fair value, considering the related income tax effect of any goodwill deductible for tax purposes.

In performing the quantitative assessment, we measure the fair value of the reporting unit using a combination of the
income and market approaches. The assessment requires us to make judgments and involves the use of significant estimates and
assumptions. These estimates and assumptions include long-term growth rates and operating margins used to calculate
projected future cash flows, risk-adjusted discount rates based on our weighted average cost of capital, future economic and
market conditions and the determination of appropriate, comparable market data. Our estimates for market growth are based on
historical data, various internal estimates and observable external sources when available, and are based on assumptions that are
consistent with the plans and estimates we use to manage the underlying business.

During the fiscal year ended March 31, 2019, we changed the measurement date for performing our annual goodwill
impairment test from the beginning of August to the beginning of March. This voluntary change in accounting principle,

applied prospectively, was preferable as it aligns the annual goodwill impairment test date more closely with our internal
budgeting process and did not delay, accelerate, or avoid an impairment of our goodwill.

Based on our annual impairment assessment process for goodwill, no impairments were recorded during the fiscal
years ended March 31, 2020, 2019, or 2018. As of March 31, 2020, the goodwill balance of one of our reporting units is
$152,175, and the fair value of that reporting unit approximates its carrying values. Therefore, a modest reduction in its fair
value would result in an impairment charge, which would be equal to the excess of the carrying value over the fair value of such
assets.

Long-lived Assets

We review all long-lived assets for impairment whenever events or changes in circumstances indicate that the related
carrying amount of an asset or asset group may not be recoverable. We compare the carrying amount of the asset to the
estimated undiscounted future cash flows expected to result from the use of the asset. If the carrying amount of the asset
exceeds estimated expected undiscounted future cash flows, we record an impairment charge for the difference between the
carrying amount of the asset and its fair value. The estimated fair value is generally measured by discounting expected future
cash flows using our incremental borrowing rate or fair value, if available. As of March 31, 2020, no indicators of impairment
existed.

Derivatives and Hedging

We transact business in various foreign currencies and have significant sales and purchase transactions denominated in
foreign currencies, subjecting us to foreign currency exchange rate risk. From time to time, we carry out transactions involving
foreign currency exchange derivative financial instruments. The transactions are designed to hedge our exposure in currency
exchange rate movements. We recognize derivative instruments as either assets or liabilities on our Consolidated Balance
Sheets and we measure those instruments at fair value. The changes in fair value of derivatives that are not designated as hedges
are recognized currently in earnings as interest and other, net in our Consolidated Statements of Operations. If a derivative
meets the definition of a cash flow hedge and is so designated, the effective portion of changes in the fair value of the derivative
are recognized, as a component of other comprehensive income (loss) while the ineffective portion of the changes in fair value
is recorded currently in earnings as interest and other, net in our Consolidated Statements of Operations. Amounts included in
Accumulated other comprehensive income (loss) for cash flow hedges are reclassified into earnings in the same period that the
hedged item is recognized in Cost of goods sold, Research and development expenses, or Interest and other, net, as appropriate.

Income Taxes

We record a tax provision for the anticipated tax consequences of the reported results of operations. Our provision for
income taxes is computed using the asset and liability method, under which deferred income taxes are recognized for
differences between the financial statement and tax bases of assets and liabilities at currently enacted statutory tax rates for the
years in which the differences are expected to reverse. The effect on deferred taxes of a change in tax rates is recognized in
income in the period that includes the enactment.

Valuation allowances are established when we determine that it is more likely than not that such deferred tax assets
will not be realized. We do not record income tax expense related to foreign withholding taxes or United States income taxes
that may become payable upon the repatriation of undistributed earnings of foreign subsidiaries, as such earnings are expected
to be reinvested indefinitely outside of the United States.

We use estimates and assumptions to compute the provision for income taxes including allocations of certain
transactions to different tax jurisdictions, amounts of permanent and temporary differences, the likelihood of deferred tax assets
being recovered and the outcome of contingent tax risks. These estimates and assumptions are revised as new events occur,
more experience is acquired and additional information is obtained. The effect of these revisions is recorded in income tax
expense or benefit in the period in which they become known.

In December 2017, the U.S. enacted the Tax Cuts and Jobs Act (the "Tax Act"), which, among other provisions,
subjects a U.S. shareholder to current tax on Global Intangible Low-Taxed Income ("GILTI") earned by foreign subsidiaries.
We have elected to recognize the resulting tax on GILTI as an expense in the period incurred.

Revenue Recognition

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). Under the new
standard, revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount
that reflects the consideration that the entity expects to receive in exchange for those goods or services. On April 1, 2018, we
adopted the new accounting standard and related amendments (the “New Revenue Accounting Standard”) using the modified
retrospective method. Refer to Note 1 to our Consolidated Financial Statements in our Annual Report on Form 10-K for the

fiscal year ended March 31, 2018 for our revenue recognition accounting policy as it relates to revenue transactions prior to
April 1, 2018.

We derive revenue primarily from the sale of our interactive entertainment content, principally for console gaming
systems and personal computers, including smartphones and tablets. Our interactive entertainment content consists of full game
software products that may contain offline gameplay, online gameplay, or a combination of offline and online gameplay. We
may also sell separate downloadable add-on content to supplement our full game software products. Certain of our software
products provide customers with the option to acquire virtual currency or make in-game purchases.

We determine revenue recognition by:

identifying the contract, or contracts, with the customer;

identifying the performance obligations in the contract;

determining the transaction price;

allocating the transaction price to performance obligations in the contract; and

recognizing revenue when, or as, we satisfy performance obligations by transferring the promised goods or services.

•

We recognize revenue in the amount that reflects the consideration we expect to receive in exchange for the sales of
software products and game related services when control of the promised products and services is transferred to our customers
and our performance obligations under the contract have been satisfied. Revenue is recorded net of transaction taxes assessed
by governmental authorities such as sales, value-added and other similar taxes.

Our software products are sold as full games, which typically provide access to the main game content, primarily for
console and PC. Generally, our full game software products deliver a license of our intellectual property that provides a
functional offline gaming experience (i.e., one that does not require an Internet connection to access the main game content or
other significant game related services). We recognize revenue related to the license of our intellectual property that provides
offline functionality at the time control of the products have been transferred to our customers (i.e. upon delivery of the
software product).

In addition, some of our full game software products that provide a functional offline gaming experience may also
include significant game related services delivered over time, such as online functionality that is dependent upon online support
services and/or additional free content updates. For full game sales that offer offline functionality and significant game related
services we evaluate whether the license of our intellectual property and the game related services are distinct and separable.
This evaluation is performed for each software product sold. If we determine that our software products contain a license of
intellectual property separate from the game related services (i.e. multiple performance obligations), we estimate a standalone
selling price for each identified performance obligation. We allocate the transaction price to each performance obligation using
a relative standalone selling price method (the transaction price is allocated to a performance obligation based on the proportion
of the standalone selling price of each performance obligation to the sum of the standalone selling prices for all performance
obligations in the contract). For the portion of the transaction price allocable to the license, revenue is recognized when the
customer takes control of the product. For the portion of the transaction price allocated to game related services, revenue is
recognized ratably over an estimated service period for the related software product. We also defer related product costs and
recognize the costs as the revenues are recognized.

Certain of our full game software products are delivered primarily as an online gaming experience with substantially
all gameplay requiring online access to our game related services. We recognize revenue for full game software products that
are dependent on our game related services over an estimated service period. For our full game online software products, we
also defer related product costs and recognize the costs as the revenue is recognized.

In addition to sales of our full game software products, certain of our software products provide customers with the
option to acquire virtual currency or make in-game purchases. Revenue from the sale of virtual currency and in-game purchases
is deferred and recognized ratably over an estimated service period.

We also sell separate downloadable add-on content to supplement our full game software products. Revenue from the
sale of separate downloadable add-on content is evaluated for revenue recognition on the same basis as our full game software
products.

Certain software products are sold to customers with a “street date” (the earliest date these products may be sold by
these retailers). For the transaction price related to the license for these products that also provide a functional offline gaming
experience, we recognize revenue on the later of the street date or the sale date as this is generally when we have transferred

control of this performance obligation. For the sale of physical software products, recognition of revenue allocated to game
related services does not begin until the product is sold-through by our customer to the end user. We currently estimate sell-
through to the end user for all our titles to be approximately two months after we have sold-in the software products to retailers.
Determining the estimated sell-through period requires management judgment and estimates.

In addition, some of our software products are sold as digital downloads. Revenue from digital downloads generally

commences when the download is made available to the end user by a third-party digital storefront.

Our payment terms and conditions vary by customer and typically provide net 30 to 60 day terms. In instances where
the timing of revenue recognition differs from the timing of invoicing, we do not adjust the promised amount of consideration
for the effects of a significant financing component when we expect, at contract inception, that the period between our transfer
of a promised product or service to our customer and payment for that product or service will be one year or less.

In certain countries, we use third-party licensees to distribute and host our games in accordance with license
agreements, for which the licensees typically pay us a fixed minimum guarantee and sales-based royalties. These arrangements
typically include multiple performance obligations, such as an upfront license of intellectual property and rights to future
updates. Based on the allocated transaction price, we recognize revenue associated with the minimum guarantee when we
transfer control of the upfront license of intellectual property (generally upon commercial launch) and the remaining portion
ratably over the contractual term in which we provide the licensee with future update rights. Royalty payments in excess of the
minimum guarantee are generally recognized when the licensed product is sold by the licensee.

Contract Balances

We generally record a receivable related to revenue when we have an unconditional right to invoice and receive
payment, and we record deferred revenue when cash payments are received or due in advance of satisfying our performance
obligations, even if amounts are refundable. Contract assets generally consist of arrangements for which we have recognized
revenue to the extent it is probable that significant reversal will not occur but do not have a right to invoice as of the reporting
date. Contract assets are recorded within Prepaid expenses and other on our Consolidated Balance Sheet.

Our allowance for doubtful accounts are typically immaterial and, if required, are based on our best estimate of

probable losses inherent in our accounts receivable balance.

Deferred revenue is comprised primarily of unsatisfied revenue related to the portion of the transaction price allocable
to game related services of our full game software products and sales of virtual currency. These sales are typically invoiced at
the beginning of the contract period, and revenue is recognized ratably over the estimated service period. Deferred revenue may
also include amounts related to software products with future street dates.

Refer to Note 2 - Revenue from Contracts with Customers for further information, including changes in deferred

revenue during the period.

Principal Agent Considerations

We offer certain software products via third party digital storefronts, such as Microsoft’s Xbox Live, Sony’s
PlayStation Network, Valve's Steam, Epic Games Store, Apple's App Store, and the Google Play Store. For sales of our
software products via third party digital storefronts, we determine whether or not we are acting as the principal in the sale to the
end user, which we consider in determining if revenue should be reported based on the gross transaction price to the end user or
based on the transaction price net of fees retained by the third-party digital storefront. An entity is the principal if it controls a
good or service before it is transferred to the customer. Key indicators that we use in evaluating these sales transactions include,
but are not limited to, the following:

•

the underlying contract terms and conditions between the various parties to the transaction;

which party is primarily responsible for fulfilling the promise to provide the specified good or service; and

which party has discretion in establishing the price for the specified good or service.

Based on our evaluation of the above indicators, for sales arrangements via Microsoft’s Xbox Live, Sony’s PlayStation
Network, Valve's Steam, and Epic Games Store we have determined we are not the principal in the sales transaction to the end
user and therefore we report revenue based on the consideration received from the digital storefront. For sales arrangements via
Apple's App Store and the Google Play Store, we have determined that we are the principal to the end user and thus report
revenue on a gross basis and mobile platform fees charged by these digital storefronts are expensed as incurred and reported
within Cost of goods sold.

Shipping and Handling

Shipping and handling costs are incurred to move physical software products to customers. We recognize all shipping
and handling costs as an expense in Cost of goods sold because we are responsible for delivery of the product to our customers
prior to transfer of control to the customer.

Estimated Service Period

For certain performance obligations satisfied over time, we have determined that the estimated service period is the
time period in which an average user plays our software products (“user life”) which most faithfully depicts the timing of
satisfying our performance obligation. We consider a variety of data points when determining and subsequently reassessing the
estimated service period for players of our software products. Primarily, we review the weighted average number of days
between players’ first and last days played online. When a new game is launched and therefore no history of online player data
is available, we consider other factors to determine the user life, such as the estimated service period of other games actively
being sold with similar characteristics. We also consider known online trends, the service periods of our previously released
software products, and, to the extent publicly available, the service periods of our competitors’ software products that are
similar in nature to ours. We believe this provides a reasonable depiction of the transfer of our game related services to our
customers, as it is the best representation of the period during which our customers play our software products. Determining the
estimated service period is subjective and requires significant management judgment and estimates. Future usage patterns may
differ from historical usage patterns, and therefore the estimated service period may change in the future. The estimated service
periods for players of our current software products are generally between 6 and 15 months depending on the software product.

Revenue Arrangements with Multiple Performance Obligations

Our contracts with customers often include promises to transfer multiple products and services. Determining whether
products and services are considered distinct performance obligations that should be accounted for separately versus together
requires significant judgment. For software products in which the software license has offline functionality and benefits from
meaningful game related services, which may include online functionality that is dependent on our online support services and/
or additional free content updates, we believe we have separate performance obligations for the license of the intellectual
property and the game related services. Additionally, because each of our product offerings has unique features and because we
do not sell our game related services separately, we typically do not have observable standalone selling prices for each
performance obligation. Significant judgment and estimates are also required to determine the standalone selling price for each
distinct performance obligation and whether a discount needs to be allocated based on the relative standalone selling price of
our products and services.

To estimate the standalone selling price for each performance obligation, we consider, to the extent available, a variety
of data points such as past selling prices of the product or other similar products, competitor pricing, and market data. If
observable pricing is not available, we use an expected cost-plus margin approach taking into account relevant costs including
product development, post-release support, marketing and licensing costs. This evaluation is performed on a product by product
basis.

Price Protection and Allowances for Returns

We grant price protection and accept returns in connection with our distribution arrangements. Following reductions in
the price of our physical software products, we grant price protection to permit customers to take credits against amounts they
owe us with respect to merchandise unsold by them. Our customers must satisfy certain conditions to entitle them to receive
price protection or return products, including compliance with applicable payment terms and confirmation of field inventory
levels.

At contract inception and at each subsequent reporting period, we make estimates of price protection and product
returns related to current period software product revenue. We estimate the amount of price protection and returns for software
products based upon, among other factors, historical experience and performance of the titles in similar genres, historical
performance of the hardware platform, customer inventory levels, analysis of sell-through rates, sales force and retail customer
feedback, industry pricing, market conditions, and changes in demand and acceptance of our products by consumers.

Revenue is recognized after deducting the estimated price protection and allowances for returns, which are accounted
for as variable consideration. Price protection and allowances for returns are considered refund liabilities and are reported
within Accrued expenses and other current liabilities on our Consolidated Balance Sheet.

Sales Incentives

We enter into various sales incentive arrangements with our customers, such as rebates, discounts, and cooperative
marketing. These incentives are considered adjustments to the transaction price of our software products and are reflected as

reductions to revenue. Sales incentives incurred by us for distinct goods or services received, such as the appearance of our
products in a customer’s national circular ad, are included in Selling and marketing expense if there is a separate identifiable
benefit and the benefit’s fair value can be established. Otherwise, such sales incentives are reflected as a reduction to revenue
liabilities in our
and are considered refund liabilities, which are reported within Accrued expenses and other current
Consolidated Balance Sheet.

Significant Estimates

Significant management judgment and estimates must be used in connection with many of the determinations
described above, such as estimating the fair value allocation to distinct and separable performance obligations, the service
period over which to defer recognition of revenue, the time it takes our physical products to sell-through to end users, and the
amounts of price protection. We believe we can make reliable estimates. However, actual results may differ from initial
estimates due to changes in circumstances, market conditions, and assumptions. Adjustments to estimates are recorded in the
period in which they become known.

Advertising

We expense advertising costs as incurred, except for production costs associated with media advertising, which are
deferred and charged to expense when the related advertisement is run for the first time. Advertising, marketing, and other
promotional expenses for the fiscal years ended March 31, 2020, 2019 and 2018 amounted to $285,607, $249,315 and
$140,618, respectively, and are included in "Selling and marketing expense" in our Consolidated Statements of Operations.

Stock-based Compensation

We have stock-based compensation plans that are broad-based long-term retention programs intended to attract and
retain talented employees and align stockholder and employee interests, which allows for awards of restricted stock, restricted
stock units and other stock-based awards of our common stock to employees and non-employees. Our plans include time-based,
market-based, and performance-based awards of our common stock to employees and non-employees.

We account for stock-based awards under the fair value method of accounting. The fair value of all stock-based
compensation is either capitalized and amortized in accordance with our software development cost accounting policy or
recognized as expense on a straight-line basis over the full vesting period of the awards for time-based stock awards and on an
accelerated attribution method for market-based and performance-based stock awards.

We estimate the fair value of time-based awards using our closing stock price on the date of grant. We estimate the fair
value of market-based awards using a Monte Carlo Simulation method, which takes into account assumptions such as the
expected volatility of our common stock, the risk-free interest rate based on the contractual term of the award, expected
dividend yield, vesting schedule and the probability that the market conditions of the awards will be achieved. For performance-
based shares, we do not record expense until the performance criteria are considered probable.

Stock-based compensation expense is recorded net of forfeitures as they occur.

Earnings (loss) per Share ("EPS")

Basic EPS is computed by dividing the net income (loss) applicable to common stockholders for the period by the
weighted average number of shares of common stock outstanding during the same period. Diluted EPS is computed by dividing
the net income (loss) applicable to common stockholders for the period by the weighted average number of shares of common
stock and common stock equivalents outstanding.

Certain of our unvested stock-based awards are considered participating securities since these securities have non-
forfeitable rights to dividends or dividend equivalents during the contractual period of the award, and thus require the two-class
method of computing EPS. The calculation of EPS for common stock under the two-class method excludes the income
attributable to the participating securities from the numerator and excludes the dilutive effect of those awards from the
denominator.

We define common stock equivalents as unvested stock-based awards and common stock underlying our Convertible
Notes (see Note 12 - Debt) outstanding during the period. Common stock equivalents are measured using the treasury stock
method, and common stock equivalents underlying the Convertible Notes are assessed for their effect on diluted EPS using the
more dilutive of the treasury stock method or the if-converted method. Under the provisions of the if-converted method, the
Convertible Notes are assumed to be converted and included in the denominator of the EPS calculation and the interest expense,
net of tax, recorded in connection with the Convertible Notes is added back to the numerator. However, potential common
shares are not included in the denominator of the diluted earnings (loss) per share calculation when inclusion of such shares
would be anti-dilutive, such as in a period in which a net loss is recorded.

Foreign Currency

The functional currency for our foreign operations is primarily the applicable local currency. Accounts of foreign
operations are translated into U.S. dollars using exchange rates for assets and liabilities at the balance sheet date and average
prevailing exchange rates for the period for revenue and expense accounts. Adjustments resulting from translation are included
in accumulated other comprehensive income (loss). Realized and unrealized transaction gains and losses are included in our
Consolidated Statements of Operations in the period in which they occur.

Comprehensive Income (Loss)

Comprehensive income (loss) is defined to include all changes in equity except those resulting from investments by
owners and distributions to owners. Accumulated other comprehensive income (loss) includes foreign currency translation
adjustments, which relate to investments that are permanent in nature and therefore do not require tax adjustments, and the
amounts for unrealized gains (losses), net on derivative instruments designated as cash flow hedges, as well as any associated
tax impact, and available for sale securities.

Recently Adopted Accounting Pronouncements

Accounting for Leases

As noted in our Lease accounting policy above, we adopted the New Lease Accounting Standard Accounting

Standards Update (ASU) 2016-02, Leases (Topic 842) effective April 1, 2019.

As part of the adoption, the new lease accounting standard allows a number of practical expedients and exemptions. At

transition, we elected the following:

•

The package of practical expedients, which allows us to carryforward our historical lease classification, our assessment
of whether a contract is or contains a lease and our initial direct costs for any leases that exist prior to adoption of the
new standard;

The practical expedient to not separate non-lease components from the related lease components; and

The exemption to not apply the balance sheet recognition requirements for leases with a lease term of 12 months or
less and instead expense those costs on a straight-line basis over the lease term or in the period in which the obligation
is incurred, if such costs are variable.

Impact of Adoption

As a result of adopting Topic 842, the following adjustments, including reclassifying prepaid and deferred rent to ROU

assets, were made to our Condensed Consolidated Balance Sheet at April 1, 2019:

ASSETS

Prepaid expenses and other

Right-of-use assets

LIABILITIES AND STOCKHOLDERS' EQUITY

Accrued expenses and other current liabilities

Lease Liabilities

Non-current lease liabilities

Other long-term liabilities

Recently Issued Accounting Pronouncements

Accounting for Reference Rate Reform

March 31, 2019

Adjustments

April 1, 2019

186,688

— $

(792) $

118,799

185,896

118,799

1,035,695

(2,976) $

1,032,719

— $

229,633

18,937

122,041

(19,995) $

18,937

122,041

209,638

In March 2020, the FASB issued ASU 2020-01, Reference Rate Reform (Topic 848): Facilitation of the Effects of
Reference Rate Reform on Financial Reporting, which provides temporary optional guidance to ease potential accounting
impacts associated with transitioning away from reference rates that are expected to be discontinued, such as interbank offered
rates and LIBOR. The guidance includes practical expedients for contract modifications due to reference rate reform. Generally,
contract modifications related to reference rate reform may be considered an event that does not require remeasurement or

reassessment of a previous accounting determination at the modification date. This guidance is effective immediately and is
only available through December 31, 2022. We are currently evaluating the potential impact of adopting this guidance on our
Consolidated Financial Statements.

Accounting for Income Taxes

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income
Taxes, which enhances and simplifies various aspects of the income tax accounting guidance, including requirements such as
tax basis step-up in goodwill obtained in a transaction that is not a business combination, ownership changes in investments,
and interim-period accounting for enacted changes in tax law. ASU 2019-12 is effective for fiscal years, and interim periods
within those fiscal years, beginning December 15, 2020 (April 1, 2021 for the Company), with early adoption permitted. We are
currently evaluating the potential impact of adopting this guidance on our Consolidated Financial Statements.

Accounting for Fair Value Measurement

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework -
Changes to the Disclosure Requirements for Fair Value Measurement, which modifies the disclosure requirements on fair value
measurements by removing, modifying, or adding certain disclosures. ASU 2018-13 is effective for fiscal years, and interim
periods within those fiscal years, beginning December 15, 2019 (April 1, 2020 for the Company), with early adoption
permitted. Certain disclosures in ASU 2018-13 are required to be applied on a retrospective basis and others on a prospective
basis. We are currently evaluating the potential impact of adopting this guidance on our Consolidated Financial Statements.

Accounting for Credit Losses

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses, which replaces the incurred loss
impairment methodology in current U.S. GAAP with a methodology that will require the reflection of expected credit losses
and will also require consideration of a broader range of reasonable and supportable information to determine credit loss
estimates. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to available-for-
sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of
the securities. For most financial instruments, the standard will require the use of a forward-looking expected loss model rather
than the incurred loss model for recognizing credit losses, which will generally result in the earlier recognition of credit losses
on financial instruments. ASU 2016-13 is effective for fiscal years, and interim periods within those fiscal years, beginning
December 15, 2019 (April 1, 2020 for the Company), with early adoption permitted. These changes will be applied on a
modified retrospective basis, with the cumulative effect of adoption recorded as an adjustment to retained earnings. We are
continuing to monitor the economic implications of the COVID-19 pandemic, but we do not expect that the impact of adopting
this guidance will be material to our Consolidated Financial Statements.

2. REVENUE FROM CONTRACTS WITH CUSTOMERS

Disaggregation of revenue

Product revenue

Product revenue is primarily comprised of the portion of revenue from software products that is recognized when the

customer takes control of the product (i.e. upon delivery of the software product).

Service and other revenue

Service and other revenue is primarily comprised of revenue from our software products that include game related
services, or separate virtual currency transactions, and in-game purchases, which are recognized over an estimated service
period.

Net revenue by product revenue and service and other was as follows:

Net revenue recognized:

Service and other

Product

Total net revenue

Full game and other revenue

Twelve Months Ended March 31,

2020

2019

1,839,696

1,249,274

3,088,970

1,319,033

1,349,361

2,668,394

Full game and other revenue primarily includes the initial sale of full game software products, which may include

offline and/or significant game related services.

Recurrent consumer spending revenue

Recurrent consumer spending revenue is generated from ongoing consumer engagement and includes revenue from

virtual currency, add-on content, and in-game purchases.

Net revenue by full game and other revenue and recurrent consumer spending was as follows:

Net revenue recognized:

Full game and other

Recurrent consumer spending

Total net revenue

Geography

Twelve Months Ended March 31,

2020

2019

1,703,971

1,384,999

3,088,970

1,597,478

1,070,916

2,668,394

We attribute net revenue to geographic regions based on software product destination. Net revenue by geographic

region was as follows:

Net revenue recognized:

United States

International

Total net revenue

Twelve Months Ended March 31,

2020

2019

2018(1)

1,775,682

1,313,288

3,088,970

1,426,906

1,241,488

2,668,394

1,052,313

740,579

1,792,892

(1) This disaggregated revenue category had previously been disclosed as part of Note 17 - Segment and Geographic Information in our Annual Report on
Form 10-K for the fiscal year ended March 31, 2018. Amounts have not been retrospectively adjusted to reflect the adoption of ASC Topic 606.

Platform

Net revenue by platform was as follows:

Net revenue recognized:

Console

PC and other

Total net revenue

Twelve Months Ended March 31,

2020

2019

2018(1)

2,308,602

780,368

3,088,970

2,233,861

434,533

2,668,394

1,463,306

329,586

1,792,892

Distribution channel

Our products are delivered through digital online services (digital download, online platforms, and cloud streaming)

and physical retail and other. Net revenue by distribution channel was as follows:

Net revenue recognized:

Digital online

Physical retail and other

Total net revenue

Twelve Months Ended March 31,

2020

2019

2018(1)

2,378,563

710,407

3,088,970

1,681,609

986,785

2,668,394

1,130,946

661,946

1,792,892

Deferred Revenue

We record deferred revenue when payments are due or received in advance of the fulfillment of our associated
performance obligations. The opening balance and ending balance of deferred revenue, including current and non-current
balances as of March 31, 2020 and March 31, 2019 were $806,123 and $864,360, respectively. For the twelve months ended
March 31, 2020, the additions to our deferred revenue balance were primarily due to cash payments received or due in advance
of satisfying our performance obligations, while the reductions to our deferred revenue balance were primarily due to the
recognition of revenue upon fulfillment of our performance obligations, both of which were in the ordinary course of business.

During the twelve months ended March 31, 2020, $850,266 of revenue was recognized that was included in the
deferred revenue balance at the beginning of the period. As of March 31, 2020, the aggregate amount of contract revenue
allocated to unsatisfied performance obligations is $889,287, which includes our deferred revenue balances and amounts to be
invoiced and recognized as revenue in future periods. We expect to recognize approximately $800,549 of this balance as
revenue over the next 12 months, and the remainder thereafter. This balance does not include an estimate for variable
consideration arising from sales-based royalty license revenue in excess of the contractual minimum guarantee.

As of March 31, 2020 and March 31, 2019, our contract asset balances were $81,625 and $57,643, respectively.

3. MANAGEMENT AGREEMENT

In March 2014, we entered into an amended management services agreement, (the "2014 Management Agreement")
with ZelnickMedia Corporation ("ZelnickMedia") pursuant to which ZelnickMedia provided us with certain management,
consulting and executive level services. The 2014 Management Agreement became effective April 1, 2014. The 2014
Management Agreement provided for an annual management fee of $2,970 over the term of the agreement and a maximum
annual bonus opportunity of $4,752 over the term of the agreement, based on the Company achieving certain performance
thresholds. In November 2017, we entered into a new management agreement, (the "2017 Management Agreement"), with
ZelnickMedia pursuant to which ZelnickMedia continues to provide financial and management consulting services to the
Company through March 31, 2024. The 2017 Management Agreement became effective January 1, 2018 and supersedes and
replaces the 2014 Management Agreement, except as otherwise contemplated by the 2017 Management Agreement. As part of
the 2017 Management Agreement, Strauss Zelnick, the President of ZelnickMedia, continues to serve as Executive Chairman

and Chief Executive Officer of the Company, and Karl Slatoff, a partner of ZelnickMedia, continues to serve as President of the
Company. The 2017 Management Agreement provides for an annual management fee of $3,100 over the term of the agreement
and a maximum annual bonus opportunity of $7,440 over the term of the agreement, based on the Company achieving certain
performance thresholds.

In consideration for ZelnickMedia's services, we recorded consulting expense (a component of General and
administrative expenses) of $10,540, $9,265, and $8,426 for the fiscal years ended March 31, 2020, 2019, and 2018,
respectively.

Pursuant to the 2017 Management Agreement and 2014 Management Agreement, we also issued stock-based awards
to ZelnickMedia. During the fiscal years ended March 31, 2020, 2019, and 2018, we recorded $23,413, $21,257, and $32,801,
respectively, of stock-based compensation expense for non-employee awards, which is included in General and administrative
expenses. See Note 17 - Stock-Based Compensation for a discussion of such awards.

FAIR VALUE MEASUREMENTS

The carrying amounts of our financial instruments, including cash and cash equivalents, restricted cash and cash
equivalents, accounts receivable, accounts payable and accrued liabilities, approximate fair value because of their short
maturities.

We follow a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy
requires entities to maximize the use of "observable inputs" and minimize the use of "unobservable inputs." The three levels of
inputs used to measure fair value are as follows:

•

Level 1—Quoted prices in active markets for identical assets or liabilities.

Level 2—Observable inputs other than quoted prices included in Level 1, such as quoted prices for markets that are
not active or other inputs that are observable or can be corroborated by observable market data.

Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value
of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar
techniques that use significant unobservable inputs.

The table below segregates all assets that are measured at fair value on a recurring basis (which is measured at least
annually) into the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at
the measurement date.

Money market funds

Bank-time deposits

Commercial paper

Corporate bonds

Money market funds

Corporate bonds

Bank-time deposits

US Treasuries

Commercial paper

Cross-currency swap

Money market funds

Private equity

March 31,
2020

$ 497,861

313,757

97,544

9,888

546,604

334,631

191,000

30,819

87,553

11,275

89,124

2,759

Foreign currency forward contracts

(11)

Quoted prices
in active
markets
for identical
assets (level 1)
497,861

313,757

Significant
other
observable
inputs
(level 2)

Significant
unobservable
inputs
(level 3)

Balance Sheet Classification

— $

—

546,604

97,544

9,888

—

— Cash and cash equivalents

— Restricted cash and cash equivalents

—

334,631

— Short-term investments

191,000

30,819

—

89,124

—

87,553

11,275

—

(11)

— Short-term investments

— Prepaid expenses and other

—

Long-term restricted cash and cash
equivalents

2,759 Other assets

— Accrued expenses and other current

liabilities

Total recurring fair value measurements, net

$2,212,804

1,669,165

540,880

2,759

Money market funds

Commercial paper

US Treasuries

Money market funds

Bank-time deposits

US Treasuries

Commercial paper

Corporate bonds

Cross-currency swap

Private equity

Foreign currency forward contracts

Quoted prices
in active
markets
for identical
assets (level 1)

Significant
other
observable
inputs
(level 2)

Significant
unobservable
inputs
(level 3)

March 31,
2019

Balance Sheet Classification

389,936

— $

— Cash and cash equivalents

39,246

25,449

565,461

387,720

55,634

4,990

296,141

791

1,823

(423)

—

39,246

— Cash and cash equivalents

25,449

565,461

387,720

55,634

—

4,990

296,141

791

—

(423)

— Cash and cash equivalents

— Restricted cash

— Short-term investments

— Prepaid expenses and other

1,823 Other assets

—

Accrued expenses and other current
liabilities

Total recurring fair value measurements, net

$ 1,766,768

1,424,200

340,745

1,823

We did not have any transfers between Level 1 and Level 2 fair value measurements, nor did we have any transfers

into or out of Level 3 during the fiscal year ended March 31, 2020.

SHORT-TERM INVESTMENTS

Our short-term investments consisted of the following as of March 31, 2020:

Short-term investments
Bank time deposits
Available-for-sale securities:

Corporate bonds
US Treasuries
Commercial paper
Total short-term investments

Short-term investments
Bank time deposits
Available-for-sale securities:

Corporate bonds
US Treasuries
Commercial paper
Total short-term investments

Cost or
Amortized Cost

March 31, 2020

Gross Unrealized

Gains

Losses

Fair Value

191,000

$ — $ — $

191,000

337,752
30,481
87,553
646,786

307
338
—
645

(3,428)
—
—
$ (3,428) $

334,631
30,819
87,553
644,003

Cost or
Amortized Cost

March 31, 2019

Gross Unrealized

Gains

Losses

Fair Value

387,720

$ — $ — $

387,720

295,526
55,656
4,990
743,892

742
27
—
769

(127)
(49)
—
$ (176) $

296,141
55,634
4,990
744,485

Based on our evaluation of impairment for these investments, we did not consider any of these investments to be other-
than-temporarily impaired as of March 31, 2020 or 2019. We do not intend to sell any of our investments with unrealized
losses, nor is it more likely than not that we will be required to sell those investments.

The following table summarizes the contracted maturities of our short-term investments at March 31, 2020:

Short-term investments
Due in 1 year or less
Due in 1-2 years

Total short-term investments

March 31, 2020

Amortized Cost

Fair Value

496,639
150,147
646,786

495,645
148,358
644,003

6. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

Our risk management strategy includes the use of derivative financial instruments to reduce the volatility of earnings
and cash flows associated with changes in foreign currency exchange rates. We do not enter into derivative financial contracts
for speculative or trading purposes. We classify cash flows from its derivative transactions as cash flows from operating
activities in our Consolidated Statements of Cash Flows.

Foreign currency forward contracts

The following table shows the gross notional amounts of foreign currency forward contracts:

Forward contracts to sell foreign currencies

Forward contracts to purchase foreign currencies

March 31,

2020

122,024

52,596

2019

116,590

87,793

For the fiscal years ended March 31, 2020, 2019 and 2018, we recorded a loss of $959, a gain of $16,831, and a loss of
$19,473, respectively, related to foreign currency forward contracts in Interest and other, net on the Consolidated Statements of
Operations. Our derivative contracts are foreign currency exchange forward contracts that are not designated as hedging
instruments under hedge accounting and are used to reduce the impact of foreign currency on certain balance sheet exposures
and certain revenue and expense. These instruments are generally short term in nature, with typical maturities of less than one
year, and are subject to fluctuations in foreign exchange rates.

Cross-currency swaps

We entered into a cross-currency swap agreement in August 2017 related to an intercompany loan that has been
designated and accounted for as a cash flow hedge of foreign currency exchange risk. The intercompany loan is related to the
acquisition of Social Point. As of March 31, 2020, the notional amount of the cross-currency swap is $108,867. This cross-
currency swap mitigates the exposure to fluctuations in the U.S. dollar-euro exchange rate related to the intercompany loan. The
critical terms of the cross-currency swap agreement correspond to the intercompany loan and both mature at the same time in
2027; as such, there was no ineffectiveness during the period.

Changes in the fair value of this cross-currency swap are recorded in Accumulated other comprehensive income (loss)
and offset the change in value of interest and principal payment as a result of changes in foreign exchange rates. Resulting gains
or losses from the cross-currency swap are reclassified from Accumulated other comprehensive income (loss) to earnings to
offset foreign currency transaction gains and losses recognized on the intercompany loan. We recognize the difference between
the U.S. dollar interest payments received from the swap counterparty and the U.S. dollar equivalent of the euro interest
payments made to the swap counterparty in Interest and other, net on our Consolidated Statement of Operations. There are no
credit-risk related contingent features associated with these swaps.

INVENTORY

Inventory balances by category are as follows:

Finished products
Parts and supplies
Inventory

March 31,

2020

2019

17,984
1,124
19,108

24,847
3,353
28,200

Estimated product returns included in inventory at March 31, 2020 and 2019 were $506 and $491, respectively.

SOFTWARE DEVELOPMENT COSTS AND LICENSES

Details of our capitalized software development costs and licenses are as follows:

Software development costs, internally developed
Software development costs, externally developed
Licenses
Software development costs and licenses

March 31,

2020

2019

Current

Non-current

Current

Non-current

17,367
10,971
11,978
40,316

305,970
92,908
2,900
401,778

14,809
3,655
10,416
28,880

434,712
168,381
343
603,436

Software development costs and licenses, net of current portion as of March 31, 2020 and 2019 included $333,063 and

$378,030, respectively, related to titles that have not been released.

Amortization and impairment of software development costs and licenses are as follows:

Amortization of software development costs and licenses
Impairment of software development costs and licenses
Less: Portion representing stock-based compensation
Amortization and impairment, net of stock-based compensation

Fiscal Year Ended March 31,

2020
321,956
—
(154,031)
167,925

2019
342,870
7,426
(149,075)
201,221

2018
101,437
1,060
(24,610)
77,887

During the twelve months ended March 31, 2019, we recorded $7,426 of software development impairment charges (a

component of Cost of goods sold). The impairment charges related to a decision not to proceed with further development of
certain interactive entertainment software.

FIXED ASSETS, NET

Fixed asset balances by category are as follows:

Computer equipment
Leasehold improvements
Computer software
Furniture and fixtures
Office equipment

Less: accumulated depreciation
Fixed assets, net

March 31,

2020
127,897
113,057
60,507
16,520
12,109
330,090
(198,202)
131,888

2019
118,841
99,093
52,641
16,179
10,758
297,512
(169,630)
127,882

Depreciation expense related to fixed assets for the fiscal years ended March 31, 2020, 2019 and 2018 was $47,628,

$39,726 and $32,202, respectively.

The following represents our fixed assets, net by location:

United States

International

Fixed assets, net

March 31,

2020

2019

87,153

44,735

131,888

78,197

49,685

127,882

10. GOODWILL AND INTANGIBLE ASSETS, NET

Goodwill

The change in our goodwill balance is as follows:

Balance at March 31, 2018
Additions from immaterial acquisition
Currency translation adjustment
Balance at March 31, 2019
Additions from immaterial acquisition
Currency translation adjustment
Balance at March 31, 2020

Definite-lived intangibles

Total

399,530
3,149
(20,962)
381,717
13,205
(8,428)
386,494

$
$

The following table sets forth the intangible assets that are subject to amortization:

March 31,

2020

2019

Developed game technology
Intellectual property
Analytics technology
Branding and trade names
Total definite-lived intangible
assets

Gross
Carrying
Amount

64,336
26,109
30,711
4,343

Accumulated
Amortization
(42,425)
$ (10,836) $
(19,450)
(1,528)

Net Book
Value
21,911
15,273
11,261
2,815

Gross
Carrying
Amount

65,428
26,109
31,271
4,422

Accumulated
Amortization
(32,975)
(6,524) $
(13,551)
(1,065)

Net Book
Value
32,453
19,585
17,720
3,357

Weighted
average
useful life
4 years
6 years
5 years
9 years

$ 125,499

$ (74,239) $

51,260

$ 127,230

$ (54,115) $

73,115

Amortization of intangible assets is included in our Consolidated Statements of Operations as follows:

Cost of goods sold
Selling and marketing
Research and development
Depreciation and amortization
Total amortization of intangible assets

Fiscal Year Ended March 31,

2020

2019

2018

14,325
—
6,180
485
20,990

16,937
—
6,436
506
23,879

19,719
8,107
6,494
510
34,830

Estimated future amortization of intangible assets that will be recorded in cost of goods sold and operating expenses

for the years ending March 31, are as follows:

Fiscal Year Ended March 31,
2021
2022
2023
2024
2025

Amortization
20,527
$
18,934
7,010
3,831
524

11. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consisted of:

Software development royalties
Compensation and benefits
Refund Liability
Licenses
Marketing and promotions
Other
Accrued expenses and other current liabilities

12. DEBT

Credit Agreement

March 31,

2020
822,416
81,791
77,829
57,651
40,797
89,400
1,169,884

2019
713,201
73,695
65,853
56,221
42,390
84,335
1,035,695

On February 8, 2019, we entered into an unsecured credit agreement (the “Credit Agreement”). The Credit Agreement
replaced our prior credit agreement, which was terminated on the same day. The Credit Agreement runs through February 8,
2024. The Credit Agreement provides for an unsecured five-year revolving credit facility with commitments of $200,000,
including sublimits for (i) the issuance of letters of credit in an aggregate face amount of up to $25,000 and (ii) borrowings and
letters of credit denominated in Pounds Sterling, Euros and Canadian Dollars in an aggregate principal amount of up to
$25,000. In addition, the Credit Agreement contains uncommitted incremental capacity permitting the incurrence of up to an
additional $250,000 in term loans or revolving credit facilities.

Loans under the Credit Agreement will bear interest at a rate of (a) 0.250% to 0.750% above a certain base rate (5.50%
at March 31, 2020) or (b) 1.125% to 1.750% above LIBOR (approximately 1.66% at March 31, 2020), which rates are
determined by reference to our consolidated total net leverage ratio. We had no outstanding borrowings at March 31, 2020.

Information related to availability on our Credit Agreement is as follows:

Available borrowings

Outstanding letters of credit

March 31,

2020

2019

198,336

1,664

198,336

1,664

We recorded interest expense and fees related to the Credit Agreement of $275 and $372, for the fiscal years ended
March 31, 2020 and 2019, respectively and, under a prior credit agreement that was terminated on the same day that we entered
into the Credit Agreement, $472 and $441, for the fiscal years ended March 31, 2019 and 2018, respectively. The Credit
Agreement also includes, among other terms and conditions, maximum leverage ratio, minimum cash reserves and, in certain
circumstances, minimum interest coverage ratio financial covenants, as well as limitations on us and each of our subsidiaries’
ability to: create, incur, assume or be liable for indebtedness; dispose of assets outside the ordinary course; acquire, merge or
consolidate with or into another person or entity; create, incur or allow any lien on any of its property; make investments; or
pay dividends or make distributions, in each case subject to certain exceptions. In addition, the Credit Agreement provides for
certain events of default such as nonpayment of principal and interest when due thereunder, breaches of representations and
warranties, noncompliance with covenants, acts of insolvency and default on indebtedness held by third parties (subject to
certain limitations and cure periods).

1.00% Convertible Notes Due 2018

On June 18, 2013, we issued $250,000 aggregate principal amount of 1.00% Convertible Notes due 2018. The
Convertible Notes were issued at 98.5% of par value for proceeds of $283,188, which included a $37,500 overallotment option
that was exercised. Interest on the Convertible Notes was payable semi-annually in arrears on July 1st and January 1st of each
year, commencing on January 1, 2014. The Convertible Notes matured on July 1, 2018.

The following table provides the components of interest expense related to our Convertible Notes:

Cash interest expense (coupon interest expense)
Non-cash amortization of discount on 1.00% Convertible Notes
Amortization of debt issuance costs
Total interest expense related to 1.00% Convertible Notes

13. EARNINGS PER SHARE ("EPS")

Fiscal Year Ended March 31,

2020

2019

2018

— $
—
—
— $

1
91
3
95

539
15,662
466
16,667

The following table sets forth the computation of basic and diluted EPS (in thousands except per share amounts):

Fiscal Year Ended March 31,

2020

2019

2018

Computation of Basic earnings per share:

Net income

Less: net income allocated to participating securities

Net income for basic earnings per share calculation

Total weighted average shares outstanding—basic

Less: weighted average participating shares outstanding

Weighted average common shares outstanding—basic

Basic earnings per share

Computation of Diluted earnings per share:

Net income

Less: net income allocated to participating securities

Net income for diluted earnings per share calculation

Weighted average common shares outstanding—basic

Add: dilutive effect of common stock equivalents

Weighted average common shares outstanding—diluted

Less: weighted average participating shares outstanding

404,459

—

404,459

113,096

—

113,096

3.58

404,459

—

404,459

113,096

1,040

114,136

—

333,837

—

333,837

113,176

—

113,176

2.95

333,837

—

333,837

113,176

2,022

115,198

—

Weighted average common shares outstanding- diluted

114,136

115,198

Diluted earnings per share

3.54

2.90

173,533

(159)

173,374

110,210

(101)

110,109

1.57

173,533

(155)

173,378

110,109

2,755

112,864

(101)

112,763

1.54

Certain of our unvested stock-based awards (including restricted stock units and restricted stock awards) are
considered participating securities since these securities have non-forfeitable rights to dividends or dividend equivalents during
the contractual period of the award and thus requires the two-class method of computing EPS. As of March 31, 2020, we have
no material participating securities.

The calculation of EPS for common stock under the two-class method shown above excludes income attributable to

the participating securities from the numerator and excludes the dilutive effect of those awards from the denominator.

We define common stock equivalents as stock-based awards and common stock related to our Convertible Notes (see
Note 12 - Debt) outstanding during the period. Common stock equivalents are measured using the treasury stock method,
except for the Convertible Notes, which were assessed for their effect on diluted EPS using the more dilutive of the treasury
stock method or the if-converted method. Under the provisions of the if-converted method, the Convertible Notes are assumed
to be converted and included in the denominator of the EPS calculation and the interest expense, net of tax, recorded in
connection with the Convertible Notes is added back to the numerator.

14. LEASES

Our lease arrangements are primarily for (1) corporate, administrative, and development studio offices and (2) data
centers and server equipment. Our existing leases have remaining lease terms ranging from one to fifteen years. In certain
instances, such leases include one or more options to renew, with renewal terms that generally extend the lease term
by one to five years for each option. The exercise of lease renewal options is generally at our sole discretion. Additionally, the
majority of our leases are classified as operating leases.

Information related to our operating leases are as follows:

Lease costs

Operating lease costs

Short term lease costs

Twelve Months Ended
March 31, 2020

29,383

2,771

Rent expense prior to our adoption of Topic 842 amounted to $29,204 and $25,301 for the fiscal years ended March 31, 2019
and 2018, respectively.

Supplemental operating cash flow information

Cash paid for amounts included in the measurement of lease liabilities

ROU assets obtained in exchange for lease obligations

Weighted average information

Remaining lease term

Discount rate

Twelve Months Ended
March 31, 2020

28,419

58,745

At March 31, 2020

8.90 years

4.98 %

Future undiscounted lease payments for our operating lease liabilities, and a reconciliation of these payments to our

operating lease liabilities at March 31, 2020, are as follows:

For the years ending March 31,

2021

2022

2023

2024

2025

Thereafter

Total future lease payments

Less imputed interest

Total lease liabilities

31,897

33,831

31,500

24,321

18,867

80,162

220,578

(43,332)

177,246

As of March 31, 2020, we have entered into facility leases that have not yet commenced with future lease payments of
approximately $16,216. These leases are expected to commence within the next 12 months and will have lease terms ranging
from 7 years to 10 years.

15. COMMITMENTS AND CONTINGENCIES

A summary of annual minimum contractual obligations and commitments as of March 31, 2020 is as follows:

Fiscal Year Ending March 31,
2021
2022
2023
2024
2025
Thereafter
Total

Software
Development
and Licensing
151,123
$
144,975
150,775
122,285
69,188
52,880
691,226

Marketing

Purchase
Obligations

11,891
38,881
40,914
89,260
35,528
24,788
241,262

38,477
23,910
12,503
1,239
947
—
77,076

Total

201,491
207,766
204,192
212,784
105,663
77,668
1,009,564

Software Development and Licensing Agreements: We make payments to third-party software developers that
include contractual payments to developers under several software development agreements that expire at various times through
March 2025. Our aggregate outstanding software development commitments assume satisfactory performance by third-party
software developers. We also have licensing commitments that primarily consist of obligations to holders of intellectual
property rights for use of their trademarks, copyrights, technology or other intellectual property rights in the development of our
products.

Marketing Agreements: We have certain minimum marketing support commitments where we commit to spend
specified amounts related to marketing our products. Marketing commitments expire at various times through September 2025
and primarily reflect our agreements with major sports leagues and players' associations.

Purchase obligations: These obligations are primarily related to agreements to purchase services that are enforceable
and legally binding on us that specifies all significant terms, including fixed, minimum or variable pricing provisions; and the
approximate timing of the transactions, expiring at various times through March 2024.

Employee Savings Plans:

For our United States employees we maintain a 401(k) retirement savings plan and trust.
Our 401(k) plan is offered to all eligible employees and participants may make voluntary contributions. We also have various
pension plans for our non-U.S. employees, some of which are required by local laws, and allow or require Company
contributions. Employer contributions under all defined contribution and pension plans during the fiscal years ended March 31,
2020, 2019, and 2018 were $14,071, $10,881, and $9,592, respectively.

Legal and Other Proceedings: We are, or may become, subject to demands and claims (including intellectual
property and employment related claims) and are involved in routine litigation in the ordinary course of business which we do
not believe to be material to our business or financial condition or results of operations. We have appropriately accrued amounts
related to certain of these claims and legal and other proceedings. While it is reasonably possible that a loss may be incurred in
excess of the amounts accrued in our financial statements, we believe that such losses, unless otherwise disclosed, would not be
material.

16. INCOME TAXES

Components of income before income taxes are as follows:

Domestic

Foreign
Income before income taxes

Fiscal Year Ended March 31,

2020

322,297

136,142
458,439

2019

134,265

98,520
232,785

2018

136,239

386
136,625

Provision for (benefit from) current and deferred income taxes consists of the following:

Current:

U.S. federal
U.S. state and local
Foreign

Total current income taxes
Deferred:

U.S. federal
U.S. state and local
Foreign

Total deferred income taxes
Provision for (benefit from) income taxes

Fiscal Year Ended March 31,

2020

2019

2018

26,561
3,575
10,061
40,197

45,079
1,317
(32,613)
13,783
53,980

8,240
2,857
22,274
33,371

(128,317)
(9,157)
3,051
(134,423)
(101,052) $

(7,327)
(1,266)
4,208
(4,385)

(13,530)
195
(19,188)
(32,523)
(36,908)

A reconciliation of our effective tax rate to the U.S. statutory federal income tax rate is as follows:

U.S. federal statutory rate

State and local taxes, net of U.S. federal benefit
Foreign tax rate differential(1)
Foreign earnings(2)
Tax credits(3)
Excess tax benefits from stock-based compensation

One-time transition tax

Domestic production deduction

Valuation allowance—domestic
Valuation allowance—foreign(2)
Change in reserves

Other

Effective tax rate

Fiscal Year Ended March 31,

2020

2019

2018

21.0 %

2.1 %

1.0 %

(9.3)%

(8.3)%

(1.8)%

— %

0.2 %

7.3 %

(2.0)%

1.6 %

11.8 %

21.0 %

2.9 %

(9.0)%

5.1 %

(15.0)%

(5.7)%

(2.0)%

— %

(46.0)%

— %

1.3 %

4.0 %

(43.4)%

31.6 %

0.5 %

(6.9)%

1.2 %

(16.5)%

(38.9)%

19.5 %

(2.8)%

(0.5)%

(2.5)%

(11.0)%

(0.7)%

(27.0)%

(1) The foreign rate differentials in relation to foreign earnings, for all periods presented, are primarily driven by changes in the mix of our foreign earnings and
the difference between the foreign and U.S. income tax rates. Includes the impact of the reversal of a net deferred tax asset of $19,826 related to the effects of
stock-based compensation from our intercompany cost-sharing arrangements due to an appeals court decision issued in Altera Corp. v. Commissioner for the
fiscal year ended March 31, 2020.
(2) Includes effects of a deferred tax asset and valuation allowance associated with a tax basis step up received in Switzerland related to the Federal Act on Tax
Reform and AVH Financing ("TRAF") enacted on January 1, 2020.
(3) Tax benefits were recorded for fiscal years ended March 31, 2020, 2019, and 2018 attributable to certain tax credits related to software development
activities.

The effects of temporary differences that gave rise to our deferred tax assets and liabilities were as follows:

Deferred tax assets:

Accrued compensation expense
Equity-based compensation
Tax credit carryforward
Tax basis step up related to TRAF
Operating lease liabilities
Net operating loss carryforward
Business reorganization
Deferred rent
Other
Total deferred tax assets

Less: Valuation allowance
Net deferred tax assets
Deferred tax liabilities:

Capitalized software and depreciation
Right of use assets
Intangible amortization
Deferred revenue
Other
Total deferred tax liabilities

Net deferred tax asset / (liability) (1)

March 31,

2020

2019

124,276
66,253
45,746
45,266
39,512
5,555
1,874
—
7,785
336,267

(86,937)
249,330

(74,006)
(36,947)
(18,206)
(5,038)
(3,587)
(137,784)
111,546

113,517
82,720
72,408
—
—
27,498
158
5,965
411
302,677

(49,413)
253,264

(101,168)
—
(22,486)
(17,100)
(4,690)
(145,444)
107,820

(1) As of March 31, 2020, $116,676 is included in Deferred tax assets and $5,130 is included in Other long-term liabilities. As of March 31, 2019, $134,732 is
included in Deferred tax assets and $26,912 is included in Other long-term liabilities.

The valuation allowance is primarily attributable to deferred tax assets for which no benefit is provided due to

uncertainty with respect to their realization.

At March 31, 2020, we had domestic net operating loss carryforwards totaling $39,506 of which $24,019 will expire in
2022 to 2027, $13,195 will expire from 2029 to 2032, and $2,292 will expire in 2038 to 2040. In addition, we had foreign net
operating loss carryforwards of $12,351, of which $3,606 will expire from 2021 and the remainder may be carried forward
indefinitely.

At March 31, 2020, we had domestic tax credit carryforwards totaling $160,793, of which $60,248 expire in 2038 to

2040, and the remainder may be carried forward indefinitely.

The total amount of undistributed earnings of foreign subsidiaries was approximately $562,269 at March 31, 2020 and
$410,095 at March 31, 2019. As of March 31, 2020, it is our intention to reinvest indefinitely undistributed earnings of our
foreign subsidiaries. Accordingly, no provision has been made for foreign withholding taxes or U.S. income taxes which may
become payable if undistributed earnings of foreign subsidiaries are repatriated. It is not practicable to estimate the tax liability
that would arise if these earnings were remitted.

We are regularly audited by domestic and foreign taxing authorities. Audits may result in tax assessments in excess of
amounts claimed and the payment of additional taxes. We believe that our tax return positions comply with applicable tax law
and that we have adequately provided for reasonably foreseeable assessments of additional taxes. Additionally, we believe that
any assessments in excess of the amounts provided for will not have a material adverse effect on the Consolidated Financial
Statements. It is possible that settlement of audits or the expiration of the statute of limitations may have an impact on our
effective tax rate in future periods.

We recognize interest and penalties related to uncertain tax positions in the provision for income taxes in our
Consolidated Statements of Operations. For the fiscal years ended March 31, 2020, 2019 and 2018, we recognized an increase
of $71, $232 and $2,363, respectively. The gross amount of interest and penalties accrued as of March 31, 2020 and 2019 was
$6,757 and $6,686, respectively.

As of March 31, 2020, we had gross unrecognized tax benefits, including interest and penalties, of $134,269, of which
$30,658 would affect our effective tax rate if realized. For the fiscal year ended March 31, 2020, gross unrecognized tax
benefits decreased by $4,737.

We are no longer subject to audit for U.S. federal income tax returns for periods prior to our fiscal year ended
March 31, 2017 and state income tax returns for periods prior to the fiscal year ended March 31, 2016. With few exceptions, we
are no longer subject to income tax examinations in non-U.S. jurisdictions for years prior to fiscal year ended March 31, 2014.
Certain U.S. state and foreign taxing authorities are currently examining our income tax returns for the fiscal years ended March
31, 2015 through March 31, 2018.

The timing of the resolution of income tax examinations is highly uncertain, and the amounts ultimately paid, if any,
upon resolution of the issues raised by the taxing authorities may differ materially from the amounts accrued for each year.
Although potential resolution of uncertain tax positions involve multiple tax periods and jurisdictions, it is reasonably possible
that a reduction of $24,983 of unrecognized tax benefits may occur within the next 12 months, some of which, depending on the
nature of the settlement or expiration of statutes of limitations, may affect our income tax provision and therefore benefit the
resulting effective tax rate. The actual amount could vary significantly depending on the ultimate timing and nature of any
settlements.

The aggregate changes to the liability for gross uncertain tax positions, excluding interest and penalties, were as

follows:

Balance, beginning of period
Additions:

Current year tax positions
Prior year tax positions

Reduction of prior year tax positions
Lapse of statute of limitations
Balance, end of period

Fiscal Year Ended March 31,

2020
132,320

2019
122,056

2018
116,085

8,596
1,404
(14,270)
(538)
127,512

13,281
288
(1,700)
(1,605)
132,320

23,007
7,406
(436)
(24,006)
122,056

We believe that we have provided for any reasonably foreseeable outcomes related to our tax audits and that any
settlement will not have a material adverse effect on our consolidated financial statements. However, there can be no assurances
as to the possible outcomes.

17. STOCK-BASED COMPENSATION

Stock Incentive Plan

In September 2017, our stockholders approved our 2017 Stock Incentive Plan (the "2017 Plan"). The aggregate
number of shares issuable under the 2017 Plan is 7,596, subject to adjustment as set forth in the 2017 Plan, and, as of March 31,
2020, there were approximately 5,065 shares available for issuance. The 2017 Plan is administered by the Compensation
Committee of the Board of Directors and allows for awards of restricted stock units and other stock-based awards of our
common stock to employees and non-employees, including to ZelnickMedia in connection with their contract to provide
executive management service to us. Subject to the provisions of the plans, the Board of Directors or any Committee appointed
by the Board of Directors, has the authority to determine the individuals to whom the equity awards are to be granted, the
number of shares to be covered by each equity award, the vesting period, restrictions, if any, on the equity award and the terms
and conditions of the equity award. Upon the vesting of certain stock-based awards, employees have the option to have us
withhold shares to satisfy the employee's federal and state tax withholding requirements.

Stock-Based Compensation Expense

The following table summarizes stock-based compensation expense included in our Consolidated Statements of

Operations:

Cost of goods sold
Selling and marketing
General and administrative
Research and development
Business reorganization

Stock-based compensation expense before income taxes

Income tax benefit

Stock-based compensation expense, net of income tax benefit

Capitalized stock-based compensation expense

Fiscal Year Ended March 31,

2020
154,031
18,680
53,607
31,563
—

2019
149,075
23,685
51,903
23,037
—

2018
24,610
13,258
58,037
18,020
2,424

257,881

247,700

116,349

(48,687) $

(48,383) $

(3,561)

209,194

24,451

199,317

75,725

112,788

90,914

During the fiscal year ended March 31, 2020, the forfeiture of awards resulted in the reversal of expense of $425 and
amounts capitalized as software development costs of $2,607. During the fiscal year ended March 31, 2019, the forfeiture of
awards resulted in the reversal of expense of $5,784 and amounts capitalized as software development costs of $17,504. During
the fiscal year ended March 31, 2018, the forfeiture of awards resulted in the reversal of expense of $17,609.

As of March 31, 2020, the total future unrecognized compensation cost related to outstanding unvested restricted stock
was $250,271 and will be either recognized as compensation expense over a weighted-average period of approximately
2.1 years or capitalized as software development costs.

For the fiscal years ended March 31, 2020, 2019 and 2018, the weighted average fair values of restricted stock units

that vested were $219,007, $264,162 and $268,570, respectively.

Restricted Stock Units

Employee Awards

Time-based restricted stock units granted to employees under our stock-based compensation plans generally vest either
annually or quarterly over 3 years from the date of grant. Certain restricted stock units granted to key officers, senior-level
employees, or key employees vest based on market conditions, primarily related to the performance of the price of our common
stock. Certain restricted stock units granted to key officers, senior-level employees, or key employees vest based on
performance conditions, primarily related to performance metrics around certain of our titles.

ZelnickMedia Non-Employee Awards

In connection with the 2014 Management Agreement and the 2017 Management Agreement, we granted restricted

stock units to ZelnickMedia (see Note 3 - Management Agreement) as follows:

Time-based
Market-based(1)
Performance-based(1)

IP
Recurrent Consumer Spending ("RCS")

Total-Performance-based
Total Restricted Stock Units

(1) Represents the maximum number of shares eligible to vest.

Fiscal Year Ended
March 31,

2020

2019

92
168

28
28
56
316

86
158

27
26
53
297

Time-based restricted stock units granted in fiscal year 2020 will vest on April 13, 2021, provided that the 2017
Management Agreement has not been terminated prior to such vesting date, and those granted in fiscal 2019 vested on April 13,
2020.

Market-based restricted stock units granted in fiscal year 2020 are eligible to vest on April 13, 2021, provided that the
2017 Management Agreement has not been terminated prior to such vesting date, and those granted in fiscal 2019 vested on
April 13, 2020. Market-based restricted stock units are eligible to vest based on our Total Shareholder Return (as defined in the
relevant grant agreement) relative to the Total Shareholder Return (as defined in the relevant grant agreement) of the companies
that constitute the NASDAQ Composite Index as of the grant date measured over a two-year period. To earn the target number
of market-based restricted stock units (which represents 50% of the number of the market-based restricted stock units set forth
in the table above), the Company must perform at the 50th percentile, with the maximum number of market-based restricted
stock units earned if the Company performs at least at the 75th percentile.

Performance-based restricted stock units granted in fiscal year 2020 are eligible to vest on April 13, 2021, provided
that the 2017 Management Agreement has not been terminated prior to such vesting date, and those granted in fiscal 2019
vested on April 13, 2020. Performance-based restricted stock units, of which 50% are tied to "IP" and 50% to "RCS" (as
defined in the relevant grant agreement), are eligible to vest based on the Company's achievement of certain performance
metrics (as defined in the relevant grant agreement) of either individual product releases of "IP" or "RCS" measured over a two-
year period. The target number of performance-based restricted stock units that may be earned pursuant to these grants is equal
to 50% of the grant amounts set forth in the above table (the numbers in the table represent the maximum number of
performance-based restricted stock units that may be earned). At the end of each reporting period, we assess the probability of
each performance metric and upon determination that certain thresholds are probable, we record expense for the unvested
portion of the shares of performance-based restricted stock units. Certain performance metrics have been achieved as of
March 31, 2020 for the "IP" and "RCS" performance-based restricted stock units granted in fiscal year 2019 and year fiscal
2020.

The unvested portion of time-based, market-based and performance-based restricted stock units held by ZelnickMedia
as of March 31, 2020 and 2019 were 613 and 526, respectively. During the fiscal year ended March 31, 2020, 209 restricted
stock units previously granted to ZelnickMedia vested and 20 restricted stock units were forfeited by ZelnickMedia.

Fair Value of Stock-Based Awards

Time-Based Awards

The estimated value, based on the closing price of our stock on the grant date, of time-based restricted stock units
granted to employees during the fiscal years ended March 31, 2020, 2019 and 2018 was $115.01, $103.79 and $106.28 per
share, respectively.

For the fiscal years ended March 31, 2020, 2019 and 2018, the estimated value, based on the closing price of our stock
on the grant date, of time-based restricted stock awards granted to ZelnickMedia was $92.65, $97.19 and $78.53 per share,
respectively.

The following table summarizes the activity in non-vested restricted stock units to employees and ZelnickMedia under
our stock-based compensation plans with time-based restricted stock awards presented at 100% of target number of shares that
may potentially vest:

Non-vested restricted stock units at March 31, 2019
Granted
Vested
Forfeited
Non-vested restricted stock units at March 31, 2020

Shares
(in thousands)

Weighted
Average Fair
Value on
Grant Date

$
2,603
668
$
(1,243) $
(68) $
$

1,960

95.35
113.18
94.86
106.08
99.54

Market-Based Awards

The following table summarizes the weighted-average assumptions used in the Monte Carlo Simulation to estimate the

fair value of market-based awards:

Risk-free interest rate
Expected stock price volatility
Expected service period (years)
Dividends

2020

2019

2018

Fiscal Year Ended March 31,

Employee
Market-Based
1.8 %
39.4 %
1.5
None

Non-Employee
Market-Based
2.4 %
39.9 %
1.0
None

Employee
Market-Based
2.6 %
34.9 %
1.5
None

Non-Employee
Market-Based
2.4 %
31.4 %
1.0
None

Employee
Market-Based
1.4 %
28.4 %
1.5
None

Non-Employee
Market-Based
2.1 %
35.5 %
1.0
None

The estimated value of market-based restricted stock awards granted to employees during the fiscal years ended
March 31, 2020, 2019, and 2018 was $201.07, $150.91, and $141.78 per share, respectively. For the fiscal years ended
March 31, 2020, 2019, and 2018, the estimated value of the market-based restricted stock awards granted to ZelnickMedia was
$132.50, $119.21, and $185.66 per share, respectively.

The following table summarizes the activity in non-vested restricted stock units to employees and ZelnickMedia under
our stock-based compensation plans with market-based restricted stock awards presented at 100% of target number of shares
that may potentially vest:

Non-vested restricted stock units at March 31, 2019
Granted
Vested
Forfeited
Non-vested restricted stock units at March 31, 2020

Performance-Based Awards

Shares
(in thousands)

Weighted
Average Fair
Value on
Grant Date

$
466
403
$
(489) $
(22) $
$
358

123.72
170.18
125.63
138.10
157.05

The estimated value of performance-based restricted stock awards granted to employees during the fiscal year ended
March 31, 2020, 2019, and 2018, was $124.50, $100.29, and $102.57 respectively. For the fiscal years ended March 31, 2020,
2019, and 2018, the estimated value of the performance-based restricted stock awards granted to ZelnickMedia was $92.65,
$97.19, and $97.78 per share, respectively.

The following table summarizes the activity in non-vested restricted stock units to employees and ZelnickMedia under
our stock-based compensation plans with performance restricted stock awards presented at 100% of target number of shares
that may potentially vest:

Non-vested restricted stock units at March 31, 2019
Granted
Vested
Forfeited
Non-vested restricted stock units at March 31, 2020

Employee Stock Purchase Plans

Shares
(in thousands)

Weighted
Average Fair
Value on
Grant Date

$
3,000
500
$
(233) $
(28) $
$

3,239

99.37
125.66
109.64
101.49
119.97

In September 2017, our stockholders approved our 2017 Global Employee Stock Purchase Plan as amended and
restated ("ESPP"). The maximum aggregate number of shares of common stock that may be issued under the plan is 9,000, and
as of March 31, 2020, there were approximately 8,817 shares available for issuance. The ESPP is administered by the
Compensation Committee of the Board of Directors and allows for eligible employees an option to purchase shares of our
common stock, which the employee may or may not exercise during an offering period. Eligible employees may authorize
payroll deductions of between 1% and 10% of their compensation to purchase shares of common stock at 85% of the lower of

the market price of our common stock on the date of commencement of the applicable offering period or on the last day of each
six-month purchase period.

The fair value is determined using the Black-Scholes valuation model. Key assumptions of the Black-Scholes
valuation model are the risk-free interest rate, expected volatility, expected term and expected dividends. The risk-free interest
rate is based on U.S. Treasury yields in effect at the time of grant for the expected term of the option. Expected volatility is
based on a combination of historical stock price volatility and implied volatility of publicly-traded options on our common
stock. Expected term is determined based on historical exercise behavior, post-vesting termination patterns, options outstanding
and future expected exercise behavior. The following table summarizes the assumptions used in the Black-Scholes valuation
model to value our purchase rights:

Risk-free interest rate
Expected stock price volatility
Expected service period (years)
Dividends

Fiscal Year Ended March 31,

2020
1.6% - 2.4%
28.1% - 45.6%
0.5
None

2019
2.1% - 2.5%
39.1% - 40.0%
0.5
None

For the fiscal year ended March 31, 2020, our employees purchased 126 shares for $10,515 with a weighted-average
fair value of $83.25. For the fiscal year ended March 31, 2019, our employees purchased 57 shares for $5,069 with a weighted-
average fair value of $88.66.

18. SHARE REPURCHASE PROGRAM

Our Board of Directors has authorized the repurchase of up to 14,218 shares of our common stock. Under this
program, we may purchase shares from time to time through a variety of methods, including in the open market or through
privately negotiated transactions, in accordance with applicable securities laws. Repurchases are subject to the availability of
stock, prevailing market conditions, the trading price of the stock, our financial performance and other conditions. The program
does not require us to repurchase shares and may be suspended or discontinued at any time for any reason.

During the fiscal years ended March 31, 2020, 2019, and 2018 we repurchased 0, 3,716, and 1,513 shares of our
common stock in the open market, respectively, for $0, $362,429, and $154,808, respectively, including commissions of $0,
$37 and $16, respectively as part of the program. As of March 31, 2020, we had repurchased a total of 10,400 shares of our
common stock under the program, and 3,818 shares of our common stock remained available for repurchase under the share
repurchase program.

All of the repurchased shares are classified as Treasury stock in our Consolidated Balance Sheets.

19. INTEREST AND OTHER, NET

Interest income
Interest expense

Foreign currency exchange loss

Other

Interest and other, net

Fiscal Year Ended March 31,

2020

2019

2018

47,341
(2,637)

(3,589)

(2,610)

38,019
(8,032)

(505)

(3,369)

38,505

26,113

21,264
(22,269)

(3,038)

5,091

1,048

20. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following table provides the components of accumulated other comprehensive (loss) income:

Balance at March 31, 2018

Other comprehensive (loss) income before reclassifications
Amounts reclassified from accumulated other comprehensive
(loss) income

Tax effect on cross-currency swap

Balance at March 31, 2019

Other comprehensive (loss) income before reclassifications
Amounts reclassified from accumulated other comprehensive
(loss) income

Tax effect on cross-currency swap

Balance at March 31, 2020

21. BUSINESS REORGANIZATION

Foreign
currency
translation
adjustments
$

(4,287) $

Unrealized
gain
(loss) on
derivative
instruments
600

Unrealized
gain (loss)
on cross-
currency
swap

Unrealized
gain
(loss) on
available-
for-sales
securities
$ (10,191) $ (1,854) $ (15,732)

Total

(28,803)

—

763

2,440

(25,600)

3,726

417

—

3,726

417

$ (33,090) $

600

$ (5,285) $

586

$ (37,189)

(27,445)

—

$ (60,535) $

—

—
600

10,504

(3,332)

(20,273)

(1,689)

—

(1,689)

775
4,305

—

775
$ (2,746) $ (58,376)

In the first quarter of fiscal 2018, we announced and initiated actions to implement a strategic reorganization at one of
our labels (the "2018 Plan"). In the fourth quarter of fiscal 2018, we announced and initiated a second phase of the 2018 plan. In
connection with both phases of this initiative, we incurred business reorganization expenses of $83, $972, and $14,742 during
the fiscal year ended March 31, 2020, 2019 and 2018, respectively, due primarily to employee separation costs. Through
March 31, 2020, we had paid $9,502 related to these reorganization activities. As of March 31, 2020, $3,862 remained accrued
for in Accrued expenses and other current liabilities and $2,493 in Other non-current liabilities. Although we may record
additional expense or benefit in future periods to true-up estimates, we do not expect to incur additional reorganization in
connection with the 2018 Plan.

In fiscal 2016, we announced and initiated actions to implement a strategic reorganization at one of our labels (the
"2016 Plan"), including reorganizing one development studio and closing two development studios. During fiscal 2016, we
incurred business reorganization expenses of $71,285 due primarily to employee separation costs in connection with this
initiative and did not incur expenses in fiscal 2017 or 2018. During fiscal 2019, we recognized a benefit of $5,930 as a result of
updating our estimate of costs to complete the plan. Through March 31, 2019, we had paid $65,355 related to these
reorganization activities. As of March 31, 2019, the 2016 Plan was completed and no further amounts remain accrued or were
expected to be incurred.

22. SUPPLEMENTARY FINANCIAL INFORMATION

The following table provides details of our valuation and qualifying accounts:

Fiscal Year Ended March 31, 2020
Valuation allowance for deferred income taxes

49,413

44,703

(7,179)

— $

86,937

Allowance for doubtful accounts

995

—

(547)

(5)

443

Beginning
Balance

Additions

Deductions

Other

Ending
Balance

Fiscal Year Ended March 31, 2019
Valuation allowance for deferred income taxes(1)
Allowance for doubtful accounts

Fiscal Year Ended March 31, 2018

Valuation allowance for deferred income taxes
Price protection, sales returns and other allowances(2)
Allowance for doubtful accounts

$ 184,085

65,114

1,369

11,555

59,674

—

$ 195,640

11,850

(107,133)

(50,944) $

49,413

1,247

651

—

(903)

995

— $ 195,640

(74,936)

3,191

53,043

(122)

—

1,247

Total accounts receivable allowances

66,483

59,674

$ (75,058) $

3,191

54,290

(1) Amount categorized as Other represents a reduction to the valuation allowance included in the cumulative effect of initially applying the New Revenue
Accounting Standard as an adjustment to the opening balance of Retained earnings, due to revenues that were previously deferred being accelerated to Retained
earnings, for which a timing difference exists for accounting and tax purposes.
(2) Under the New Revenue Accounting Standard, Price protection, sales returns and other allowances are considered refund liabilities and are reported within
Accrued expenses and other current liabilities on our Consolidated Balance Sheet and are no longer considered accounts receivable allowance as they were
under ASC 605.

23. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

The following tables set forth quarterly supplementary data for each of the years in the two-year period ended

March 31, 2020:

Fiscal Year Ended March 31, 2020
Net revenue
Gross profit
Income from operations
Net income
Earnings per share:

Basic earnings per share
Diluted earnings per share

Fiscal Year Ended March 31, 2019
Net revenue
Gross profit
Income from operations
Net income
Earnings per share:

Basic earnings per share
Diluted earnings per share

First
540,459
298,990
51,730
46,280

0.41
0.41

First
387,982
256,617
70,846
71,693

0.63
0.62

$
$

Quarter

Second

Third

Fourth

857,841
389,593
74,820
71,815

0.63
0.63

$
$

930,129
493,036
176,833
163,642

1.44
1.43

Quarter

Second

492,667
257,787
25,986
25,367

0.22
0.22

$
$

Third
1,248,738
350,254
51,779
179,948

1.59
1.57

$
$

760,541
364,901
121,884
122,722

1.08
1.07

Fourth

539,007
280,092
58,061
56,829

0.50
0.50

$
$

Basic and diluted earnings per share are computed independently for each of the quarters presented. Therefore, the sum

of quarterly basic and diluted earnings per share information may not equal annual basic and diluted earnings per share.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934 the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.

SIGNATURES

TAKE-TWO INTERACTIVE SOFTWARE, INC.

By:

/s/ STRAUSS ZELNICK
Strauss Zelnick
Chairman and Chief Executive Officer

May 22, 2020

POWER OF ATTORNEY

Each individual whose signature appears below constitutes and appoints Strauss Zelnick and Lainie Goldstein and each of
them, his or her true and lawful attorneys-in-fact and agents with full power of substitution, for him or her and in his or her
name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to
file the same, with all exhibits thereto and all documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform
each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes
as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or his, her or their substitute or substitutes, may lawfully do or cause to be done or by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following
persons on behalf of the Registrant in the capacities and on the date indicated.

Signature

Title

Date

/s/ STRAUSS ZELNICK
Strauss Zelnick

/s/ LAINIE GOLDSTEIN
Lainie Goldstein

/s/ MICHAEL DORNEMANN
Michael Dornemann

/s/ ROLAND HERNANDEZ
Roland Hernandez

/s/ J MOSES
J Moses

/s/ MICHAEL SHERESKY
Michael Sheresky

/s/ LAVERNE SRINIVASAN
LaVerne Srinivasan

/s/ SUSAN TOLSON
Susan Tolson

/s/ PAUL VIERA
Paul Viera

Chairman and Chief Executive Officer
(Principal Executive Officer)

May 22, 2020

Chief Financial Officer (Principal Financial
and Accounting Officer)

May 22, 2020

Lead Independent Director

May 22, 2020

Director

May 22, 2020

Subsidiaries of Take-Two Interactive Software, Inc.

Exhibit 21.1

Name
2K Czech, s.r.o.
2K Games (Chengdu) Co., Ltd.
2K Games (Shanghai) Co., Ltd.
2K Games Dublin Limited
2K Games Madrid S.L.
2K Games, Inc.
2K, Inc.
2K Marin, Inc.
2K Play, Inc.
2K Games Songs LLC
2K Games Sounds LLC
2K Games Tunes LLC
2K Studios Montreal, Inc.
2K Vegas, Inc.
2KSports, Inc.
A.C.N. 617 406 550 Pty Ltd.
A.C.N. 633 146 291 Pty Ltd.
Blue Shift, Inc.
Cat Daddy Games, L.L.C.
Dhruva Interactive Private Limited
DMA Design Holdings Limited
Double Take LLC
Firaxis Games, Inc.
Frog City Software, Inc.
Gathering of Developers, Inc.
Gearhead Entertainment, Inc.
Glennco Games, LLC
Hangar 13 UK Limited
Indie Built, Inc.
Inventory Management Systems, Inc.
Ghost Story Games, LLC
Joytech Europe Limited
Joytech Ltd.
Kush Games, Inc.
Maxcorp Ltd.
Parrot Games, S.L.U.
Rockstar Events Inc.
Rockstar Games, Inc.
Rockstar Games India Private Limited

(formerly known as Dhruva Infotech Private Limited)

Rockstar Games Songs LLC
Rockstar Games Sounds LLC

Jurisdiction of Incorporation
Czech Republic
China
China
Ireland
Spain
Delaware
New York
Delaware
Delaware
Delaware
Delaware
Delaware
Quebec
Delaware
Delaware
Australia
Australia
California
Washington
India
United Kingdom
Delaware
Delaware
Delaware
Texas
Pennsylvania
Delaware
United Kingdom
Delaware
Delaware
Delaware
United Kingdom
Hong Kong
California
Bermuda
Spain
New York
Delaware

India
Delaware
Delaware

Name
Rockstar Games Toronto ULC
Rockstar Games Tunes LLC
Rockstar Interactive India LLP
Rockstar International Limited
Rockstar Leeds Limited
Rockstar Lincoln Limited
Rockstar London Limited
Rockstar New England, Inc.
Rockstar North Limited
Rockstar Records, LLC
Rockstar San Diego, Inc.
Segmatic Services (US), Inc.
Social Point, K.K.
Social Point, S.L.
T2 Developer, Inc.
Take 2 Interactive Software Pty. Ltd.
Take 2 Productions, Inc.
Take-Two Asia Pte. Ltd.
Take-Two Chile SpA
Take-Two Contracting, LLC
Take-Two Esports Holdings, LLC
Take-Two Europe (Holdings) Limited
Take-Two GB Limited.
Take-Two Holdings III LLC
Take-Two Holdings II LLC
Take Two Holdings LLC
Take-Two Hong Kong Limited
Take-Two Interactive Benelux B.V.
Take-Two Interactive Canada Holdings, Inc.
Take-Two Interactive Canada, Inc.
Take-Two Interactive Espana S.L.
Take-Two Interactive France SAS
Take-Two Interactive GmbH
Take-Two Interactive Japan G.K.
Take-Two Interactive Korea Ltd.
Take-Two Interactive Software Europe Limited
Take-Two Interactive Software Ireland Limited
Take-Two Interactive Software UK Limited
Take-Two Interactive Software Vancouver ULC dba

Visual Concepts Blue Shift
Take-Two International B.V.
Take-Two Talent, LLC
Take-Two UK Holdings Limited
Take-Two Vegas, LLC
Take Two International GmbH

Jurisdiction of Incorporation
British Columbia
Delaware
India
United Kingdom
United Kingdom
United Kingdom
United Kingdom
Delaware
United Kingdom
Delaware
Virginia
Delaware
Japan
Spain
Delaware
Australia
Delaware
Singapore
Chile
Delaware
Delaware
United Kingdom
United Kingdom
Delaware
Delaware
Delaware
Hong Kong
Netherlands
Ontario
Ontario
Spain
France
Germany
Japan
South Korea
United Kingdom
Ireland
United Kingdom

British Columbia
Netherlands
Delaware
United Kingdom
Delaware
Switzerland

Name
Talonsoft, Inc.
Techcorp Ltd.
Venom Games Limited
Venues I, LLC
Visual Concepts China Co., Ltd.
Visual Concepts Entertainment
Visual Concepts Hungary Kft
VLM Entertainment Group, Inc.
WC Holdco, Inc.

Jurisdiction of Incorporation
Delaware
Hong Kong
United Kingdom
Delaware
China
California
Hungary
Delaware
New York

TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES

CERTIFICATION OF CHIEF EXECUTIVE OFFICER
Section 302 Certification

Exhibit 31.1

I, Strauss Zelnick, certify that:

I have reviewed this Annual Report on Form 10-K of Take-Two Interactive Software, Inc. (the “registrant”);

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of the circumstances under which such statements were made,
not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly
present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the
periods presented in this report;

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as
defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed
under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report
is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles;

evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by
this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during
the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that
has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial
reporting; and

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal
control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or
persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and
report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the

registrant’s internal control over financial reporting.

May 22, 2020

/s/ STRAUSS ZELNICK
Strauss Zelnick
Chairman and Chief Executive Officer

TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES

CERTIFICATION OF CHIEF FINANCIAL OFFICER
Section 302 Certification

Exhibit 31.2

I, Lainie Goldstein, certify that:

I have reviewed this Annual Report on Form 10-K of Take-Two Interactive Software, Inc. (the “registrant”);

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the

registrant’s internal control over financial reporting.

May 22, 2020

/s/ LAINIE GOLDSTEIN
Lainie Goldstein
Chief Financial Officer

TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES

CERTIFICATION PURSUANT TO
18 U. S. C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

EXHIBIT 32.1

In connection with the Annual Report of Take-Two Interactive Software, Inc. (the “Company”) on Form 10-K for the period
ended March 31, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Strauss
Zelnick, as Chairman and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)

(2)

May 22, 2020

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of
1934; and

The information contained in the Report fairly presents, in all material respects, the financial condition and
results of operations of the Company.

/s/ STRAUSS ZELNICK
Strauss Zelnick
Chairman and Chief Executive Officer

TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES

CERTIFICATION PURSUANT TO
18 U. S. C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

EXHIBIT 32.2

In connection with the Annual Report of Take-Two Interactive Software, Inc. (the “Company”) on Form 10-K for the period
ended March 31, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Lainie
Goldstein, as Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)

(2)

May 22, 2020

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of
1934; and

The information contained in the Report fairly presents, in all material respects, the financial condition and
results of operations of the Company.

/s/ LAINIE GOLDSTEIN
Lainie Goldstein
Chief Financial Officer

TAKE-TWO INTERACTIVE SOFTWARE, INC. 2020 ANNUAL REPORT

OFFICERS

CORPORATE OFFICES

CORPORATE INFORMATION

STRAUSS ZELNICK
Chairman and
Chief Executive Ofﬁcer

KARL SLATOFF
President

LAINIE GOLDSTEIN
Chief Financial Ofﬁcer

DANIEL P. EMERSON
Executive Vice President and
Chief Legal Ofﬁcer

BOARD OF DIRECTORS

STRAUSS ZELNICK
Chairman

MICHAEL DORNEMANN
Lead Independent Director

ROLAND HERNANDEZ
J MOSES
MICHAEL SHERESKY
LaVERNE SRINIVASAN
SUSAN TOLSON
PAUL VIERA

CORPORATE HEADQUARTERS
Take-Two Interactive Software, Inc.
110 West 44th Street
New York, NY 10036
(646) 536-2842

Take-Two Interactive
Software Europe, Ltd.
Saxon House
2-4 Victoria Street
Windsor, Berkshire SL4 1EN

Take-Two Asia Pte. Ltd.
47 Scotts Road
#11-01 Goldbell Towers
Singapore 228233

PRINCIPAL OPERATING OFFICES

Rockstar Games, Inc.
622 Broadway
New York, NY 10012

2K Games, Inc.
2K Sports, Inc.
10 Hamilton Landing
Novato, CA 94949

STOCKHOLDER INFORMATION
A copy of the Company’s Annual
Report on Form 10-K, as ﬁled with the
Securities and Exchange
Commission, will be furnished
without charge upon written
request to Investor Relations at
the Corporate Headquarters.

INVESTOR RELATIONS
IR@take2games.com

INDEPENDENT AUDITORS
Ernst & Young LLP
5 Times Square
New York, NY 10036

TRANSFER AGENT
American Stock Transfer
& Trust Company, LLC
6201 15th Avenue
Brooklyn, NY 11219

COMMON STOCK INFORMATION
The Company’s common
stock is listed on the NASDAQ
Global Select Market under
the symbol TTWO.

www.take2games.com

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TAKE-TWO INTERACTIVE SOFTWARE, INC.
110 West 44th Street
New York, NY 10036
(646) 536-2842