Item 16. Form 10-K Summary

Not applicable.

TAKE-TWO INTERACTIVE SOFTWARE, INC. FISCAL YEAR ENDED MARCH 31, 2019

INDEX TO FINANCIAL STATEMENTS

	Page
Reports of Independent Registered Public Accounting Firm	54
Consolidated Balance Sheets—At March 31, 2019 and 2018	56
Consolidated Statements of Operations—For the fiscal years ended March 31, 2019, 2018 and 2017	57
Consolidated Statements of Comprehensive Income—For the fiscal years ended March 31, 2019, 2018 and 2017	58
Consolidated Statements of Cash Flows—For the fiscal years ended March 31, 2019, 2018 and 2017	59
Consolidated Statements of Stockholders' Equity—For the fiscal years ended March 31, 2019, 2018 and 2017	60
Notes to the Consolidated Financial Statements	61

(All other items in this report are inapplicable)

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 March 31, 2019 and 2018, 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, 2019, 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, 2019 and 2018, and the results of its operations and its cash flows for each of the three years in the period ended March 31, 2019, 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, 2019, 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 13, 2019 expressed an unqualified opinion thereon.

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.

Adoption of ASU No. 2016-09

As discussed in Note 1 to the consolidated financial statements, the Company changed its method of accounting for stock-based compensation effective April 1, 2017 due to the adoption of ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting.

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.

/s/ Ernst & Young LLP

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

New York, New York

May 13, 2019

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, 2019, 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, 2019, 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, 2019 and 2018, 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, 2019, and the related notes and our report dated May 13, 2019 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 13, 2019

TAKE-TWO INTERACTIVE SOFTWARE, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)

		March 31,
		2019				2018
ASSETS
Current assets:
Cash and cash equivalents		$	826,525			$	808,973
Short-term investments		744,485				615,406
Restricted cash		565,461				437,398
Accounts receivable, net of allowances of $995 and $54,290 at March 31, 2019 and 2018, respectively		395,729				247,649
Inventory		28,200				15,162
Software development costs and licenses		28,880				33,284
Deferred cost of goods sold		51,867				117,851
Prepaid expenses and other		186,688				133,454
Total current assets		2,827,835				2,409,177
Fixed assets, net		127,882				102,478
Software development costs and licenses, net of current portion		603,436				639,369
Deferred cost of goods sold, net of current portion		1,028				26,719
Goodwill		381,717				399,530
Other intangibles, net		73,115				103,681
Deferred tax assets		134,732				4,930
Other assets		93,320				51,957
Total assets		$	4,243,065			$	3,737,841
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable		$	72,797			$	35,029
Accrued expenses and other current liabilities		1,035,695				914,748
Deferred revenue		843,302				777,152
Total current liabilities		1,951,794				1,726,929
Long-term debt		—				8,068
Non-current deferred revenue		21,058				355,589
Other long-term liabilities		229,633				158,285
Total liabilities		2,202,485				2,248,871
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.01 par value, 5,000 shares authorized: no shares issued and outstanding at March 31, 2019 and 2018		—				—
Common stock, $.01 par value, 200,000 shares authorized; 134,602 and 132,743 shares issued and 112,181 and 114,038 outstanding at March 31, 2019 and 2018, respectively		1,346				1,327
Additional paid-in capital		2,019,369				1,888,039
Treasury stock, at cost; 22,421 and 18,705 common shares at March 31, 2019 and 2018, respectively		(820,572		)		(458,180		)
Retained earnings		877,626				73,516
Accumulated other comprehensive loss		(37,189		)		(15,732		)
Total stockholders' equity		2,040,580				1,488,970
Total liabilities and stockholders' equity		$	4,243,065			$	3,737,841

See accompanying Notes.

TAKE-TWO INTERACTIVE SOFTWARE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

		Fiscal Year Ended March 31,
		2019				2018				2017
Net revenue		$	2,668,394			$	1,792,892			$	1,779,748
Cost of goods sold		1,523,644				898,311				1,022,959
Gross profit		1,144,750				894,581				756,789
Selling and marketing		391,400				256,092				285,453
General and administrative		281,234				247,828				211,409
Research and development		230,170				196,373				137,915
Depreciation and amortization		40,232				43,969				30,707
Business reorganization		(4,958		)		14,742				—
Total operating expenses		938,078				759,004				665,484
Income from operations		206,672				135,577				91,305
Interest and other, net		26,113				1,048				(15,690		)
Gain on long-term investments, net		—				—				1,350
Income before income taxes		232,785				136,625				76,965
(Benefit from) provision for income taxes		(101,052		)		(36,908		)		9,662
Net income		$	333,837			$	173,533			$	67,303
Earnings per share:
Basic earnings per share		$	2.95			$	1.57			$	0.73
Diluted earnings per share		$	2.90			$	1.54			$	0.72

See accompanying Notes.

TAKE-TWO INTERACTIVE SOFTWARE, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

		March 31,
		2019				2018				2017
Net income		$	333,837			$	173,533			$	67,303
Other comprehensive income (loss):
Foreign currency translation adjustment		(28,803		)		43,379				(9,086		)
Cash flow hedges:
Change in unrealized gains		763				(8,153		)		—
Reclassification to earnings		3,726				—				—
Tax effect on effective cash flow hedges		417				(2,038		)		—
Change in fair value of cash flow hedges		4,906				(10,191		)		—
Available-for-sale securities:
Net unrealized gain (loss), net of taxes		2,440				(1,778		)		(169		)
Reclassification to earnings for realized net loss, net of taxes		—				—				9
Change in fair value of available-for-sale securities		2,440				(1,778		)		(160		)
Other comprehensive income (loss)		(21,457		)		31,410				(9,246		)
Comprehensive income		$	312,380			$	204,943			$	58,057

See accompanying Notes.

TAKE-TWO INTERACTIVE SOFTWARE, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

		Fiscal Year Ended March 31,
		2019				2018 (as Adjusted) (1)				2017 (as Adjusted) (1)
Operating activities:
Net income		$	333,837			$	173,533			$	67,303
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization and impairment of software development costs and licenses		201,221				77,887				221,911
Stock-based compensation		247,700				116,349				81,879
Amortization of intellectual property		23,879				34,830				6,738
Depreciation		39,726				32,202				30,707
Amortization of discount on Convertible Notes		91				15,662				21,222
Impairment of in-process research and development		—				11,257				—
Amortization of debt issuance costs		809				578				1,227
Deferred income taxes		110,603				(32,523		)		3,020
Gain on long-term investments, net		—				—				(1,350		)
Gain on redemption of Convertible Notes		—				(4,900		)		—
Other, net		(225		)		6,375				(3,410		)
Changes in assets and liabilities:
Accounts receivable		(98,075		)		(26,998		)		(41,956		)
Inventory		(14,403		)		3,917				(4,942		)
Software development costs and licenses		(206,831		)		(225,269		)		(252,951		)
Prepaid expenses, other current and other non-current assets		(275,800		)		(74,544		)		(22,155		)
Deferred revenue		304,713				198,397				126,285
Deferred cost of goods sold		(24,882		)		(11,959		)		(14,969		)
Accounts payable, accrued expenses and other liabilities		201,152				198,733				189,344
Net cash provided by operating activities		843,515				493,527				407,903
Investing activities:
Change in bank time deposits		(171,057		)		(40,918		)		89,076
Proceeds from available-for-sale securities		325,133				241,012				155,936
Purchases of available-for-sale securities		(282,534		)		(369,998		)		(221,671		)
Purchases of fixed assets		(66,969		)		(61,557		)		(21,167		)
Proceeds from sale of long-term investment		—				—				1,350
Purchase of long-term investments		—				(5,000		)		(1,885		)
Business acquisitions, net of cash acquired		(28,149		)		(9,401		)		(130,669		)
Asset acquisition		—				(25,965		)		—
Net cash used in investing activities		(223,576		)		(271,827		)		(129,030		)
Financing activities:
Tax payment related to net share settlements on restricted stock awards		(101,293		)		(112,884		)		(51,762		)
Repurchase of common stock		(362,392		)		(154,792		)		—
Excess tax benefit from stock-based compensation		—				—				1,990
Other		—				(13,791		)		—
Net cash used in financing activities		(463,685		)		(281,467		)		(49,772		)
Effects of foreign currency exchange rates on cash, cash equivalents, and restricted cash		(10,639		)		24,924				(7,798		)
Net change in cash, cash equivalents, and restricted cash		145,615				(34,843		)		221,303
Cash, cash equivalents, and restricted cash, beginning of year		1,246,371				1,281,214				1,059,911
Cash, cash equivalents, and restricted cash, end of year		$	1,391,986			$	1,246,371			$	1,281,214
Supplemental data:
Interest paid		$	5,265			$	4,121			$	7,628
Income taxes paid (refunded)		$	19,280			$	8,790			$	6,648

(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							Additional Paid-in Capital				Treasury Stock							Retained Earnings/(Accumulated Deficit)				Accumulated Other Comprehensive Income (Loss)				Total Stockholders' Equity
		Shares			Amount					Shares			Amount
Balance, March 31, 2016		103,765			$	1,038			$	1,088,628			(17,192	)		$	(303,388	)		$	(166,997	)		$	(37,896	)		$	581,385
Net income		—			—				—				—			—				67,303				—				67,303
Change in cumulative foreign currency translation adjustment		—			—				—				—			—				—				(9,086		)		(9,086		)
Net unrealized gain on available-for-sale securities, net of taxes		—			—				—				—			—				—				(160		)		(160		)
Stock-based compensation		—			—				88,378				—			—				—				—				88,378
Tax benefit associated with stock awards		—			—				1,990				—			—				—				—				1,990
Issuance of restricted stock, net of forfeitures and cancellations		1,738			17				(17		)		—			—				—				—				—
Settlement of 1.75% Convertible Notes Due 2016		13,094			131				249,866				—			—				—				—				249,997
Conversion of 1.00% Convertible Notes Due 2018		899			9				18,332				—			—				—				—				18,341
Issuance of shares related to Social Point acquisition		1,480			15				57,327				—			—				—				—				57,342
Net share settlement of restricted stock awards		(1,163	)		(12		)		(51,750		)		—			—				—				—				(51,762		)
Balance, March 31, 2017		119,813			1,198				1,452,754				(17,192	)		(303,388		)		(99,694		)		(47,142		)		1,003,728
Net income		—			—				—				—			—				173,533				—				173,533
Change in cumulative foreign currency translation adjustment		—			—				—				—			—				—				43,379				43,379
Net unrealized gain on available-for-sale securities, net of taxes		—			—				—				—			—				—				(1,778		)		(1,778		)
Change in unrealized gains on cash flow hedge, net		—			—				—				—			—				—				(10,191		)		(10,191		)
Stock-based compensation		—			—				293,214				—			—				—				—				293,214
Repurchased common stock		—			—				—				(1,513	)		(154,792		)		—								(154,792		)
Issuance of restricted stock, net of forfeitures and cancellations		2,151			21				(21		)		—			—				—				—				—
Conversion of 1.00% Convertible Notes Due 2018		12,082			121				254,963				—			—				—				—				255,084
Net share settlement of restricted stock awards		(1,303	)		(13		)		(112,871		)		—			—				—				—				(112,884		)
Adoption of ASU 2016-09		—			—				—				—			—				(323		)		—				(323		)
Balance, March 31, 2018		132,743			1,327				1,888,039				(18,705	)		(458,180		)		73,516				(15,732		)		1,488,970
Net income		—			—				—				—			—				333,837				—				333,837
Change in cumulative foreign currency translation adjustment																								(33,456		)		(33,456		)
Net unrealized gain on available-for-sale securities, net of taxes																								2,440				2,440
Change in unrealized gains on cash flow hedge, net																								4,906				4,906
Stock-based compensation									219,460																			219,460
Issuance of restricted stock, net of forfeitures and cancellations		2,345			23				(23		)																	—
Repurchased common stock													(3,716	)		(362,392		)										(362,392		)
Conversion of 1.00% Convertible Notes Due 2018		377			4				8,108																			8,112
Net share settlement of restricted stock awards		(920	)		(9		)		(101,284		)																	(101,293		)
Impact from adoption of New Revenue Accounting Standard (Note 2)																				470,273				4,653				474,926
Employee share purchase plan settlement		57			1				5,069																			5,070
Balance, March 31, 2019		134,602			$	1,346			$	2,019,369			(22,421	)		$	(820,572	)		$	877,626			$	(37,189	)		$	2,040,580

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 our two wholly-owned labels Rockstar Games and 2K, as well as our Private Division label and Social Point, a leading developer of mobile games. 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 and liabilities and the disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of net revenue and expenses during the reporting periods. Our most significant estimates and assumptions relate to revenue recognition (see Note 2 - Revenue from Contracts with Customers), the recoverability and amortization of software development costs and prepaid royalties, 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. 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 and distributors. Our five largest customers accounted for 70.1% 70.7% and 65.5% of net revenue during the fiscal years ended March 31, 2019, 2018 and 2017, respectively. One customer accounted for 31.3%, 30.2% and 26.3% of net revenue during the fiscal years ended March 31, 2019, 2018, and 2017, respectively. A second customer accounted for 18.1%, 17.6%, and 14.2% of net revenue during the fiscal years ended March 31, 2019, 2018, and 2017 respectively. A third customer accounted for 10.5% of net revenue during the fiscal year ended March 31, 2019. As of March 31, 2019 and 2018, five customers accounted for 66.6% and 65.4% of our gross accounts receivable, respectively. Customers that individually accounted for more than 10% of our gross accounts receivable balance comprised 55.8% and 53.2% of such balances at March 31, 2019 and 2018, respectively. We had two customers who accounted for 40.1% and 15.7% of our gross accounts receivable as of March 31, 2019 and two customers who accounted for 37.7% and 15.5% of our gross accounts receivable as of March 31, 2018. We did not have any additional customers that exceeded 10% of our gross accounts receivable

as of March 31, 2019 and 2018. 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 balance is primarily related to a dedicated account limited to the payment of certain internal royalty obligations.

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, it recognizes an impairment charge at that time in the Consolidated Statements of Operations. In 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 employee stock-based compensation, payroll expense, 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.

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. Prior to establishing technological feasibility of a product, we record any costs incurred by third-party developers as research and development expenses. 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 period 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 capitalized costs 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 betterments 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.

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.

Consistent with prior years, we performed our annual impairment assessment process for goodwill in August 2018 and did not record any goodwill impairments. During the fiscal quarter 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. As a result, we performed an additional impairment test for our goodwill as of March 1, 2019 which did not result in any impairment of our goodwill. This voluntary change in accounting principle, applied prospectively, is 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. Retrospective application to prior periods is impracticable as we are unable to objectively determine, without the use of hindsight, the assumptions that would be used in those earlier periods.

Based on our annual impairment assessment process for goodwill, no impairments were recorded during the fiscal years ended March 31, 2019, 2018, or 2017.

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, 2019, 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.

The 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.

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 the Recently Adopted Accounting Pronouncements section below for the impact of adoption on our Consolidated Financial Statements. 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 such as the Sony Computer Entertainment, Inc. ("Sony") PlayStation®4 ("PS4") and Microsoft Corporation ("Microsoft") Xbox One® ("Xbox One"), and personal computers ("PC"), 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.

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 is subjective and requires significant 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. 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, 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, and Valve's Steam, 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 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. 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 9 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 future price protection and product returns related to current period software product revenue. We estimate the amount of future 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 and are considered refund liabilities, which are reported within Accrued expenses and other current liabilities in our 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 future price protection and allowance for returns. 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. Advertising expense for the fiscal years ended March 31, 2019, 2018 and 2017 amounted to $249,315, $140,618 and $173,947, 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 Implementation Costs Incurred in a Cloud Computing Arrangement

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-15: Intangibles - Goodwill and Other - Internal-Use Software - (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. This ASU aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The standard is effective for fiscal years beginning December 15, 2019 (April 1, 2020 for the Company), with early adoption permitted. ASU 2018-15 is required to be applied either retrospectively or prospectively to all implementation costs after the date of adoption. We early adopted this update effective July 1, 2018 as the standard aligns with how we are currently accounting for implementation costs incurred in a cloud computing arrangement. The adoption did not have an impact on our Consolidated Financial Statements.

Accounting for Restricted Cash

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. This ASU amends the presentation of restricted cash within the statement of cash flows by requiring that restricted cash and restricted cash equivalents be included within cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts. This standard is effective for fiscal years beginning after December 15, 2017 (April 1, 2018 for the Company), including interim periods within those fiscal years.

We adopted the new standard during the first quarter of fiscal 2019 and applied the standard retrospectively for all periods presented. The application of this new standard resulted in a decrease of $128,063, a decrease of $99,580, and an increase of $76,474 of net cash from operating activities on our Consolidated Statements of Cash Flows for the twelve months ended March 31, 2019, 2018, and 2017, respectively.

Accounting for Stock Compensation

In June 2018, the FASB issued ASU 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Non-employee Share-Based Accounting. This guidance aligns the accounting for share-based payment transactions with non-employees to accounting for share-based payment transactions with employees. Companies are required to record a cumulative-effect adjustment (net of tax) to retained earnings as of the beginning of the fiscal year of the adoption. Upon transition, non-employee awards are required to be measured at fair value as of the adoption date. This standard will be effective for fiscal years beginning December 15, 2018 (April 1, 2019 for the Company), including interim periods within those fiscal years. Early adoption is permitted.

We early adopted this update effective April 1, 2018 to simplify the accounting for non-employee stock-based awards so that it is better aligned with the current guidance for employee stock-based awards. The application of this new standard did not have a significant impact to our Consolidated Financial Statements for the fiscal year ended March 31, 2019, as our last re-measurement date for non-employee awards was March 31, 2018. The adoption of this ASU results in a change to our accounting policy for non-employee stock-based awards.

In March 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-09, Compensation-Stock Compensation. This new guidance identifies areas for simplification involving several aspects of accounting for share-based payment transactions, including income tax consequences, classification of awards as either equity or liabilities, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows.

We adopted this update effective April 1, 2017. Upon adoption, using the modified retrospective transition method, we recognized previously unrecognized excess tax benefits as a deferred tax asset, which was fully offset by a valuation allowance, resulting in no net impact to retained earnings. Without the valuation allowance, upon adoption, our deferred tax asset would have increased by $24,594. We elected to apply the change in presentation of excess tax benefits as an operating activity in the Consolidated Statement of Cash Flows prospectively and thus no prior periods were adjusted. We also elected to account for forfeitures as they occur using the modified retrospective transition method, which resulted in a cumulative effect adjustment of $323 to retained earnings (an increase in the accumulated deficit). During the fiscal year ended March 31, 2019 and 2018, we recognized $13,340 and $53,169, respectively, of excess tax benefits on stock-based compensation in our Consolidated Statement of Operations as a result of adopting this update. The other aspects of the new guidance did not have a material effect on our Consolidated Financial Statements.

Accounting for Goodwill

In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350). This ASU eliminates Step 2 from the goodwill impairment test. Under the new guidance, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. Additionally, this ASU eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. The amendments in this ASU are effective for fiscal years beginning after December 15, 2019 (April 1, 2020 for the Company), including interim periods within those fiscal years, and are applied on a prospective basis. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. We early adopted this update effective April 1, 2018. The adoption did not have an impact on our Consolidated Financial Statements.

Revenue from Contracts with Customers

As noted in our Revenue Recognition accounting policy above, we adopted the New Revenue Accounting Standard effective April 1, 2018.

Impact of Adopting New Revenue Accounting Standard

We elected to apply the New Revenue Accounting Standard only to contracts not completed as of the adoption date. For contracts that were modified before the date of adoption, we elected to reflect the aggregate effect of all modifications when (i) identifying the satisfied and unsatisfied performance obligations, (ii) determining the transaction price, and (iii) allocating the transaction price to the satisfied and unsatisfied performance obligations. We recognized the cumulative effect of initially applying the New Revenue Accounting Standard as an adjustment to the opening balance of retained earnings, net of tax. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. The cumulative effect adjustment recorded to our retained earnings was $470,273, net of tax.

The most significant impacts of adopting the New Revenue Accounting Standard are:

•

The elimination of the requirement for vendor-specific objective evidence (“VSOE”) of fair value for software products that offer offline gameplay functionality and benefit from meaningful game related services which may include online functionality that is dependent on our online support services and/or additional free content updates. Under the prior revenue accounting guidance, for software products with multiple deliverables for which we did not have VSOE for our game related service deliverables, we recognized revenue ratably over an estimated service period that was based on game life. Under the New Revenue Accounting Standard, we allocate the sales price and recognize revenue for the offline software upon delivery and the remainder over an estimated service period, which represents a player's typical user life (see below). Upon adoption, this difference in accounting primarily affected revenue recognition from Grand Theft Auto V and our NBA 2K franchise, where the majority of the sales price was allocated to the offline software and recognized upon transfer of control to our customers, and the remaining amounts allocated to the game related service performance obligation and recognized over the estimated service period.

•	For performance obligations that are 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 faithfully depicts the timing of satisfying our performance obligation. Previously, our estimated service period was based on the economic game life.

•	Under the New Revenue Accounting Standard, we are able to recognize revenue to the extent it is probable that a significant reversal will not occur even if we do not have a right to invoice as of the reporting date. Contract assets are classified within Prepaid expenses and other on the Consolidated Balance Sheet.

•	The classification of allowances for estimated price protection, reserves for returns and other allowances as refund liabilities. Such allowances were previously recorded as contra-Accounts receivable and now are classified within Accrued expenses and other current liabilities on the Consolidated Balance Sheet.

As a result of adopting the New Revenue Accounting Standard the following adjustments were made to our Consolidated Balance Sheet at April 1, 2018, which also reflect the changes related to income tax accounts included in Prepaid expenses and other, Other assets, Accrued expenses and other current liabilities, and Other long-term liabilities:

		March 31, 2018				Adjustments				April 1, 2018
ASSETS
Accounts receivable, net		$	247,649			$	53,940			$	301,589
Software development costs and licenses		33,284				(11,096		)		22,188
Deferred cost of goods sold		117,851				(89,867		)		27,984
Prepaid expenses and other		133,454				33,620				167,074
Deferred cost of goods sold, net of current portion		26,719				(25,687		)		1,032
Deferred tax assets		4,930				51,430				56,360
LIABILITIES AND STOCKHOLDERS' EQUITY
Accrued expenses and other current liabilities		$	914,748			$	69,678			$	984,426
Deferred revenue		777,152				(230,144		)		547,008
Non-current deferred revenue		355,589				(336,456		)		19,133
Other long-term liabilities		158,285				34,336				192,621
Retained earnings		73,516				470,273				543,789
Accumulated other comprehensive loss		(15,732		)		4,653				(11,079		)

Recently Issued Accounting Pronouncements

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 Leases

In February 2016, the FASB issued ASU 2016-02, Leases. This new guidance requires lessees to recognize a right-of-use asset and a lease liability for virtually all leases (other than leases that meet the definition of a short-term lease). The liability will be equal to the present value of committed lease payments. The asset will be based on the liability, subject to adjustment, such as for initial direct costs. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance. Operating leases will result in straight-line expense (similar to current operating leases) while finance leases will result in a front-loaded expense pattern (similar to current capital leases). Classification will be based on criteria that are largely similar to those applied in current lease accounting. This update is effective for annual periods, and interim periods within those years, beginning after December 15, 2018 (April 1, 2019 for the Company). We will adopt the new guidance using a modified retrospective approach whereby lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented. While we are still evaluating the effect that ASU 2016-02 will have on our Consolidated Balance Sheet, we expect that assets and liabilities will increase materially when operating leases are recorded on our Consolidated Balance Sheets under the new standard. Our current operating lease portfolio primarily includes leases related to real estate. See Note 14 - Commitments and Contingencies for a summary of our undiscounted future minimum lease payments under non-cancellable operating leases as of March 31, 2019.

2. REVENUE FROM CONTRACTS WITH CUSTOMERS

Impacts on financial statement line items

Our adoption of the New Revenue Accounting Standard had the following impact on our Consolidated Statement of Operations for the twelve months ended March 31, 2019:

		Amounts as reported				Amounts without adoption of New Revenue Accounting Standard				Increase (decrease) due to adoption of New Revenue Accounting Standard
Net revenue		$	2,668,394			$	1,927,148			$	741,246
Cost of goods sold		1,523,644				1,218,056				305,588
Gross profit		1,144,750				709,092				435,658
Selling and marketing		391,400				391,400				—
General and administrative		281,234				281,234				—
Research and development		230,170				230,170				—
Depreciation and amortization		40,232				40,232				—
Business reorganization		(4,958		)		(4,958		)		—
Total operating expenses		938,078				938,078				—
Income (loss) from operations		206,672				(228,986		)		435,658
Interest and other, net		26,113				28,296				(2,183		)
Income (loss) before income taxes		232,785				(200,690		)		433,475
(Benefit from) provision for income taxes		(101,052		)		(204,782		)		103,730
Net income		$	333,837			$	4,092			$	329,745
Earnings per share:
Basic earnings per share		$	2.95			$	0.04			$	2.91
Diluted earnings per share		$	2.90			$	0.04			$	2.86

Our adoption of the New Revenue Accounting Standard had the following impact on our Consolidated Balance Sheet as of March 31, 2019:

		Amounts as reported				Amounts without adoption of New Revenue Accounting Standard				Increase (decrease) due to adoption of New Revenue Accounting Standard
ASSETS
Accounts receivable, net		$	395,729			$	330,448			$	65,281
Software development costs and licenses		28,880				39,191				(10,311		)
Deferred cost of goods sold		51,867				176,802				(124,935		)
Prepaid expenses and other		186,688				195,744				(9,056		)
Software development costs and licenses, net of current portion		603,436				777,238				(173,802		)
Deferred cost of goods sold, net of current portion		1,028				75,919				(74,891		)
Deferred tax assets		134,732				157,741				(23,009		)
LIABILITIES AND STOCKHOLDERS' EQUITY
Accrued expenses and other current liabilities		$	1,035,695			$	949,347			$	86,348
Deferred revenue		843,302				1,445,936				(602,634		)
Non-current deferred revenue		21,058				677,148				(656,090		)
Other long-term liabilities		229,633				202,721				26,912
Retained earnings		877,626				77,608				800,018
Accumulated other comprehensive loss		(37,189		)		(31,912		)		(5,277		)

Our adoption of the New Revenue Accounting Standard accelerated the revenue recognition of prior period game sales into retained earnings, which resulted in increased cash taxes paid on our Consolidated Statement of Cash Flows for the fiscal year ending March 31, 2019.

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:

		Twelve Months Ended March 31,
		2019
Net revenue recognized(1):
Service and other		$	1,319,033
Product		1,349,361
Total net revenue		$	2,668,394

(1) Disaggregated revenue category added as a result of adoption of ASC 606. As we used the modified retrospective method in adopting ASC 606, no comparative periods are presented.

Full game and other revenue

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:

		Twelve Months Ended March 31,
		2019
Net revenue recognized(1):
Full game and other		$	1,597,478
Recurrent consumer spending		1,070,916
Total net revenue		$	2,668,394

(1) Disaggregated revenue category added as a result of adoption of ASC 606. As we used the modified retrospective method in adopting ASC 606, no comparative periods are presented.

Geography

We attribute net revenue to geographic regions based on software product destination. Net revenue by geographic region was as follows:

		Twelve Months Ended March 31,
		2019				2018(1)				2017(1)
Net revenue recognized:
United States		$	1,426,906			$	1,052,313			$	999,128
International		1,241,488				740,579				780,620
Total net revenue		$	2,668,394			$	1,792,892			$	1,779,748

(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:

		Twelve Months Ended March 31,
		2019				2018(1)				2017(1)
Net revenue recognized:
Console		$	2,233,861			$	1,463,306			$	1,440,724
PC and other		434,533				329,586				339,024
Total net revenue		$	2,668,394			$	1,792,892			$	1,779,748

(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.

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:

		Twelve Months Ended March 31,
		2019				2018(1)				2017(1)
Net revenue recognized:
Digital online		$	1,681,609			$	1,130,946			$	921,734
Physical retail and other		986,785				661,946				858,014
Total net revenue		$	2,668,394			$	1,792,892			$	1,779,748

(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.

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 April 1, 2018 and March 31, 2019 were $566,141 and $864,360, respectively. For the twelve months ended March 31, 2019, 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, 2019, $548,531 of revenue was recognized that was included in the deferred revenue balance at the beginning of the period. As of March 31, 2019, the aggregate amount of contract revenue allocated to unsatisfied performance obligations is $1,131,714, which includes our deferred revenue balances and amounts to be invoiced and recognized as revenue in future periods. We expect to recognize approximately $1,047,309 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, 2019 and April 1, 2018, our contract asset balances were $57,643 and $69,522, 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 $9,265, $8,426 and $7,722 for the fiscal years ended March 31, 2019, 2018 and 2017, 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, 2019, 2018 and 2017, we recorded $21,257, $32,801 and $29,573, respectively, of stock-based compensation expense for non-employee awards, which is included in General and administrative expenses. See Note 16 - Stock-Based Compensation for a discussion of such awards.

4. FAIR VALUE MEASUREMENTS

The carrying amounts of our financial instruments, including cash and cash equivalents, restricted cash, 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.

		March 31, 2019				Quoted prices in active markets for identical assets (level 1)				Significant other observable inputs (level 2)				Significant unobservable inputs (level 3)				Balance Sheet Classification
Money market funds		$	389,936			$	389,936			$	—			$	—			Cash and cash equivalents
Commercial paper		39,246				—				39,246				—				Cash and cash equivalents
US Treasuries		25,449				25,449				—				—				Cash and cash equivalents
Money market funds		565,461				565,461				—				—				Restricted cash
Bank-time deposits		387,720				387,720				—				—				Short-term investments
Corporate bonds		296,141				—				296,141				—				Short-term investments
US Treasuries		55,634				55,634				—				—				Short-term investments
Commercial paper		4,990				—				4,990				—				Short-term investments
Cross-currency swap		791				—				791				—				Prepaid expenses and other
Private equity		1,823				—				—				1,823				Other assets
Foreign currency forward contracts		(423		)		—				(423		)		—				Accrued and other current liabilities
Total recurring fair value measurements, net		$	1,766,768			$	1,424,200			$	340,745			$	1,823

		March 31, 2018				Quoted prices in active markets for identical assets (level 1)				Significant other observable inputs (level 2)				Significant unobservable inputs (level 3)				Balance Sheet Classification
Money market funds		$	516,626			$	516,626			$	—			$	—			Cash and cash equivalents
Bank-time deposits		21				21				—				—				Cash and cash equivalents
Commercial paper		10,796				—				10,796				—				Cash and cash equivalents
Corporate bonds		308,716				—				308,716				—				Short-term investments
US Treasuries		59,725				59,725				—				—				Short-term investments
Commercial paper		25,422				—				25,422				—				Short-term investments
Mutual funds		4,880				—				4,880				—				Short-term investments
Bank-time deposits		216,663				216,663				—				—				Short-term investments
Foreign currency forward contracts		12				—				12				—				Prepaid expenses and other
Foreign currency forward contracts		(43		)		—				(43		)		—				Accrued and other current liabilities
Cross-currency swap		(15,659		)		—				(15,659		)		—				Accrued and other current liabilities
Private equity		$	1,205			$	—			$	—			$	1,205			Other assets
Total recurring fair value measurements, net		$	1,128,364			$	793,035			$	334,124			$	1,205

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, 2019.

5. SHORT-TERM INVESTMENTS

Our short-term investments consisted of the following as of March 31, 2019:

		March 31, 2019
		Cost or Amortized Cost				Gross Unrealized
			Gains				Losses				Fair Value
Short-term investments
Bank time deposits		$	387,720			$	—			$	—			$	387,720
Available-for-sale securities:
Corporate bonds		295,526				742				(127		)		296,141
US Treasuries		55,656				27				(49		)		55,634
Commercial paper		4,990												4,990
Total short-term investments		$	743,892			$	769			$	(176	)		$	744,485

		March 31, 2018
		Cost or Amortized Cost				Gross Unrealized
			Gains				Losses				Fair Value
Short-term investments
Bank time deposits		$	216,663			$	—			$	—			$	216,663
Available-for-sale securities:
Corporate bonds		310,387				16				(1,687		)		308,716
US Treasuries		59,970				—				(245		)		59,725
Commercial paper		25,422				—				—				25,422
Mutual funds		4,876				16				(12		)		4,880
Total short-term investments		$	617,318			$	32			$	(1,944	)		$	615,406

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, 2019 or 2018. 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, 2019:

		March 31, 2019
		Amortized Cost				Fair Value
Short-term investments
Due in 1 year or less		$	629,474			$	629,496
Due in 1-2 years		114,418				114,989
Total short-term investments		$	743,892			$	744,485

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:

		March 31,
		2019				2018
Forward contracts to purchase foreign currencies		$	116,590			$	4,359
Forward contracts to sell foreign currencies		$	87,793			$	67,580

For the fiscal years ended March 31, 2019, 2018 and 2017, we recorded a gain of $16,831, a loss of $19,473, and a gain of $7,197, 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 (See note 23). As of March 31, 2019, the notional amount of the cross-currency swap is $115,641. 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.

7. INVENTORY

Inventory balances by category are as follows:

		March 31,
		2019				2018
Finished products		$	24,847			$	13,940
Parts and supplies		3,353				1,222
Inventory		$	28,200			$	15,162

Estimated product returns included in inventory at March 31, 2019 and 2018 were $491 and $373, respectively.

8. SOFTWARE DEVELOPMENT COSTS AND LICENSES

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

		March 31,
		2019								2018
		Current				Non-current				Current				Non-current
Software development costs, internally developed		$	14,809			$	434,712			$	19,338			$	515,761
Software development costs, externally developed		3,655				168,381				4,275				122,270
Licenses		10,416				343				9,671				1,338
Software development costs and licenses		$	28,880			$	603,436			$	33,284			$	639,369

Software development costs and licenses, net of current portion as of March 31, 2019 and 2018 included $378,030 and $638,055, respectively, related to titles that have not been released.

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

		Fiscal Year Ended March 31,
		2019				2018				2017
Amortization of software development costs and licenses		$	342,870			$	101,437			$	222,801
Impairment of software development costs and licenses		7,426				1,060				20,166
Less: Portion representing stock-based compensation		(149,075		)		(24,610		)		(21,056		)
Amortization and impairment, net of stock-based compensation		$	201,221			$	77,887			$	221,911

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 relate to a decision not to proceed with further development of certain interactive entertainment software.

9. FIXED ASSETS, NET

Fixed asset balances by category are as follows:

		March 31,
		2019				2018
Computer equipment		$	118,841			$	87,926
Leasehold improvements		99,093				88,762
Computer software		52,641				47,702
Furniture and fixtures		16,179				13,933
Office equipment		10,758				8,139
		297,512				246,462
Less: accumulated depreciation		(169,630		)		(143,984		)
Fixed assets, net		$	127,882			$	102,478

Depreciation expense related to fixed assets for the fiscal years ended March 31, 2019, 2018 and 2017 was $39,726, $32,202 and $30,629, respectively.

The following represents our fixed assets, net by location:

		March 31,
		2019				2018
United States		$	78,197			$	65,476
International		49,685				37,002
Fixed assets, net		$	127,882			$	102,478

10. GOODWILL AND INTANGIBLE ASSETS, NET

Goodwill

The change in our goodwill balance is as follows:

		Total
Balance at March 31, 2017		$	359,115
Additions from immaterial acquisition		6,236
Adjustments (see Note 23)		4,245
Currency translation adjustment		$	29,934
Balance at March 31, 2018		$	399,530
Additions from immaterial acquisition		3,149
Currency translation adjustment		$	(20,962	)
Balance at March 31, 2019		$	381,717

Indefinite-lived intangibles

Other intangibles, net, as of March 31, 2018, included in-process research and development ("IPR&D") assets of $5,226 acquired as part of the Social Point acquisition, which were indefinite-lived intangibles and therefore not subject to amortization until the related games were released or development was abandoned. During the fiscal year ended March 31, 2019, we released Tasty Town and reclassified the balance to definite-lived intangibles. As of March 31, 2019, there are no IPR&D assets included in Other intangibles, net. During the fiscal year ended March 31, 2018, as a result of our decision not to proceed with further development of a certain game related IPR&D, we recognized an impairment charge of $11,257 in Depreciation and amortization expense in our Consolidated Statements of Operations.

Definite-lived intangibles

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

	March 31,
	2019												2018
	Gross Carrying Amount				Accumulated Amortization				Net Book Value				Gross Carrying Amount				Accumulated Amortization				Net Book Value				Weighted average useful life
Developed game technology	65,428				(32,975		)		32,453				67,133				(23,189		)		43,944				4 years
Intellectual property	$	26,109			$	(6,524	)		$	19,585			$	37,431			$	(13,616	)		$	23,815			6 years
Analytics technology	31,271				(13,551		)		17,720				34,499				(8,050		)		26,449				5 years
Branding and trade names	4,422				(1,065		)		3,357				4,879				(632		)		4,247				9 years
User base	—				—				—				10,454				(10,454		)		—				1 year
Total definite-lived intangible assets	$	127,230			$	(54,115	)		$	73,115			$	154,396			$	(55,941	)		$	98,455

During the fiscal year ended March 31, 2018, we acquired intellectual property related to Kerbal Space Program, which was treated as an asset acquisition, resulting in a $21,500 increase in Intellectual property, and a $4,465 increase in Developed game technology.

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

		Fiscal Year Ended March 31,
		2019				2018				2017
Cost of goods sold		$	16,937			$	19,719			$	4,252
Selling and marketing		—				8,107				1,497
Research and development		6,436				6,494				989
Depreciation and amortization		506				510				78
Total amortization of intangible assets		$	23,879			$	34,830			$	6,816

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,		Amortization
2020		$	21,469
2021		20,669
2022		19,371
2023		7,084
2024		3,844

11. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consisted of:

		March 31,
		2019				2018
Software development royalties		$	713,201			$	600,512
Compensation and benefits		73,695				57,499
Refund Liability		65,853				—
Licenses		56,221				43,261
Marketing and promotions		42,390				19,731
Business reorganization (see Note 20)		—				72,074
Deferred acquisition payments		—				25,000
Other		84,335				96,671
Accrued expenses and other current liabilities		$	1,035,695			$	914,748

12. DEBT

New Credit Agreement

On February 8, 2019, we entered into an unsecured Credit Agreement (the “New Credit Agreement”). The New Credit Agreement replaced our existing Credit Agreement (see below), which was terminated on the same day. The New Credit Agreement runs through February 8, 2024. The New 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 New 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 New 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, 2019) or (b) 1.125% to 1.750% above LIBOR (approximately 2.49% at March 31, 2019), which rates are determined by reference to our consolidated total net leverage ratio. We had no outstanding borrowings at March 31, 2019.

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

		March 31,
		2019
Available borrowings		$	198,336
Outstanding letters of credit		$	1,664

We recorded interest expense and fees related to the New Credit Agreement of $372, for the fiscal year ended March 31, 2019. The New 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 New 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).

Credit Agreement

In December 2017, we entered into a Seventh Amendment to our Second Amended and Restated Credit Agreement (as amended, the “Credit Agreement”). The Credit Agreement provided for borrowings of up to $100,000 which could have been increased by up to $100,000 pursuant to the terms of the Credit Agreement and which was secured by substantially all of our assets and the equity of our subsidiaries. The Credit Agreement was terminated in connection with our entering into the New Credit Agreement. We had no outstanding borrowings at March 31, 2018.

We recorded interest expense and fees related to the Credit Agreement of $472, $441 and $441, for the fiscal years ended March 31, 2019, 2018, and 2017, respectively.

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:

		Fiscal Year Ended March 31,
		2019				2018				2017
Cash interest expense (coupon interest expense)		$	1			$	539			$	2,784
Non-cash amortization of discount on 1.00% Convertible Notes		91				15,662				14,221
Amortization of debt issuance costs		3				466				453
Total interest expense related to 1.00% Convertible Notes		$	95			$	16,667			$	17,458

13. EARNINGS PER SHARE ("EPS")

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

		Fiscal Year Ended March 31,
		2019				2018				2017
Computation of Basic earnings per share:
Net income		$	333,837			$	173,533			$	67,303
Less: net income allocated to participating securities		—				(159		)		(1,275		)
Net income for basic earnings per share calculation		$	333,837			$	173,374			$	66,028
Total weighted average shares outstanding—basic		113,176				110,210				91,921
Less: weighted average participating shares outstanding		—				(101		)		(1,741		)
Weighted average common shares outstanding—basic		113,176				110,109				90,180
Basic earnings per share		$	2.95			$	1.57			$	0.73
Computation of Diluted earnings per share:
Net income		$	333,837			$	173,533			$	67,303
Less: net income allocated to participating securities		—				(155		)		(1,246		)
Net income for diluted earnings per share calculation		$	333,837			$	173,378			$	66,057
Weighted average common shares outstanding—basic		113,176				110,109				91,921
Add: dilutive effect of common stock equivalents		2,022				2,755				2,152
Weighted average common shares outstanding—diluted		115,198				112,864				94,073
Less: weighted average participating shares outstanding		—				(101		)		(1,741		)
Weighted average common shares outstanding- diluted		115,198				112,763				92,332
Diluted earnings per share		$	2.90			$	1.54			$	0.72

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, 2019, 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. COMMITMENTS AND CONTINGENCIES

A summary of annual minimum contractual obligations and commitments as of March 31, 2019 is as follows:

Fiscal Year Ending March 31,		Software Development and Licensing				Marketing				Operating Leases				Purchase Obligations				Total
2020		$	183,309			$	52,953			$	28,365			$	23,707			$	288,334
2021		120,008				28,830				27,882				9,559				186,279
2022		114,734				28,661				26,272				5,063				174,730
2023		56,884				78,100				23,787				623				159,394
2024		51,792				24,600				16,474				484				93,350
Thereafter		55,792				49,200				82,570				—				187,562
Total		$	582,519			$	262,344			$	205,350			$	39,436			$	1,089,649

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 2024 and primarily reflect our agreements with major sports leagues and players' associations.

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. Rent expense amounted to $29,204, $25,301 and $19,545 for the fiscal years ended March 31, 2019, 2018 and 2017, respectively.

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, 2019, 2018 and 2017 were $10,881, $9,592 and $8,018, respectively.

Legal and Other Proceedings: We are, or may become, subject to demands and claims (including intellectual property 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.

On February 7, 2019, all of the previously disclosed lawsuits, claims, and counterclaims that had been pending since April 2016 with Mr. Leslie Benzies, the former president of one of our subsidiaries, were resolved. See Note 20 - Business Reorganization.

15. INCOME TAXES

On December 22, 2017, the U.S. enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (herein referred to as the "Act”). The Act made broad and complex changes to the U.S. tax code. The Act reduced the U.S. federal corporate income tax rate from 35% to 21%, effective January 1, 2018 and required companies to pay a one-time transition tax on the previously untaxed earnings of certain foreign subsidiaries. In addition, the Act made other changes, including, but not limited to, (1) a Base Erosion Anti-abuse Tax ("BEAT"), which is a new minimum tax, (2) generally eliminating U.S. federal income taxes on dividends from foreign subsidiaries, (3) a new provision that taxes global intangible low-taxed income ("GILTI"), (4) the repeal of the domestic production activity deduction, and (5) other base broadening provisions. As of March 31, 2018, we

recognized a tax benefit of $6,202 due to the re-measurement of the deferred tax liability relating to indefinite lived intangibles as a result of the reduced U.S. federal corporate income tax rate.

The SEC issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act ("SAB 118"), which provides guidance on accounting for the Act’s impact. SAB 118 provides a measurement period, which should not extend beyond one year from the Act enactment date, during which a company acting in good faith may complete the accounting for the impact of the Act under ASC 740. In accordance with SAB 118, the income tax effects of the Act must be reflected in the reporting period in which the accounting under ASC Topic 740 is complete. As of March 31, 2018, we recorded an estimated increase to income tax expense of $18,078 related to the one-time transition tax on the previously untaxed earnings of certain foreign subsidiaries as a result of the Act. The estimated increase was a result of transition tax of $26,649, offset by an increased benefit from domestic production deductions and other tax credits. As of March 31, 2019, we completed the accounting and recorded a decrease to income tax expense of $4,553 to adjust the provisional estimate related to the one-time transition tax on the previously untaxed earnings of certain foreign subsidiaries as a result of the Act. The impact of the Act differs from these estimates due to changes in interpretations and assumptions we have made, guidance that was issued, and actions taken as a result of the Act.

Components of income before income taxes are as follows:

		Fiscal Year Ended March 31,
		2019				2018				2017
Domestic		$	134,265			$	136,239			$	86,050
Foreign		98,520				386				(9,085		)
Income before income taxes		$	232,785			$	136,625			$	76,965

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

		Fiscal Year Ended March 31,
		2019				2018				2017
Current:
U.S. federal		$	8,240			$	(7,327	)		$	19,271
U.S. state and local		2,857				(1,266		)		2,521
Foreign		22,274				4,208				(13,012		)
Total current income taxes		33,371				(4,385		)		8,780
Deferred:
U.S. federal		(128,317		)		(13,530		)		969
U.S. state and local		(9,157		)		195				2,395
Foreign		3,051				(19,188		)		(2,482		)
Total deferred income taxes		(134,423		)		(32,523		)		882
(Benefit from) Provision for income taxes		$	(101,052	)		$	(36,908	)		$	9,662

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

		Fiscal Year Ended March 31,
		2019			2018			2017
U.S. federal statutory rate		21.0	%		31.6	%		35.0	%
State and local taxes, net of U.S. federal benefit		2.9	%		0.5	%		4.9	%
Foreign tax rate differential(1)		(9.0	)%		(6.9	)%		(1.4	)%
Foreign earnings		5.1	%		1.2	%		5.5	%
Tax credits(2)		(15.0	)%		(16.5	)%		(45.8	)%
Excess tax benefits from stock-based compensation(3)		(5.7	)%		(38.9	)%		—
One-time transition tax(4)		(2.0	)%		19.5	%		—
Domestic production deduction		—	%		(2.8	)%		(2.5	)%
Valuation allowance—domestic(5)		(46.0	)%		(0.5	)%		10.1	%
Valuation allowance—foreign		—	%		(2.5	)%		0.1	%
Change in reserves		1.3	%		(11.0	)%		2.9	%
Other(6)		4.0	%		(0.7	)%		3.7	%
Effective tax rate		(43.4	)%		(27.0	)%		12.5	%

(1) The foreign rate differential in relation to foreign earnings, for all periods presented, are primarily driven by changes in the mix of our foreign earnings and the difference in the foreign versus U.S. income tax rate.

(2) Tax benefits were recorded for fiscal years ended March 31, 2019, 2018, and 2017 attributable to certain tax credits related to software development activities.

(3) The accounting for stock 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.

(4) Represents the true-up related to the provisional estimate recorded in the fiscal year ended March 31, 2018 in accordance with SAB 118 for the one-time transition tax on previously untaxed earnings of certain foreign subsidiaries.

(5) The change in domestic valuation allowance includes a reduction in 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 in the fiscal year ended March 31, 2019.

(6) Includes the effects from the Act, excluding the SAB 118 true-up relating to the one-time transition tax, which were not material

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

		March 31,
		2019				2018
Deferred tax assets:
Accrued compensation expense		$	113,517			$	94,919
Equity-based compensation		82,720				78,293
Tax credit carryforward		72,408				64,175
Net operating loss carryforward		27,498				35,378
Deferred rent		5,965				5,729
Business reorganization		158				16,369
Deferred Revenue		—				42,426
Sales returns and allowances (including bad debt)		—				575
Other		411				1,145
Total deferred tax assets		302,677				339,009
Less: Valuation allowance		(49,413		)		(195,640		)
Net deferred tax assets		253,264				143,369
Deferred tax liabilities:
Capitalized software and depreciation		(101,168		)		(118,119		)
Intangible amortization		(22,486		)		(24,651		)
Deferred revenue		(17,100		)		—
Convertible debt		—				(13		)
Other		(4,690		)		(4,534		)
Total deferred tax liabilities		(145,444		)		(147,317		)
Net deferred tax asset / (liability) (1)		107,820				(3,948		)

(1) As of March 31, 2019, $134,732 is included in Deferred tax assets and $26,912 is included in Other long-term liabilities. As of March 31, 2018, $3,948 is included in Other long-term liabilities.

We recognized a tax benefit of $107,132 from a reduction in 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. Our determination took into account that successful launch of Red Dead Redemption 2 during the fiscal 2019 along with our recent positive trend of earnings.

The valuation allowance is primarily attributable to deferred tax assets for which no benefit is provided due to uncertainty with respect to their realization. In the previous year, the net deferred tax liability is primarily the result of deferred tax liabilities related to indefinite lived intangibles, which cannot be used to offset deferred tax assets, as well as deferred tax liabilities related to intangibles as a result of the acquisition of Social Point.

At March 31, 2019, we had domestic net operating loss carryforwards totaling $47,520 of which $23,986 will expire in 2022 to 2027, $15,308 will expire from 2029 to 2032, and $8,226 will expire in 2038 to 2039. In addition, we had foreign net operating loss carryforwards of $20,563, of which $4,494 will expire from 2023 to 2028 and the remainder may be carried forward indefinitely.

At March 31, 2019, we had domestic credit carryforwards totaling $202,450, of which $115,008 expire in 2029 to 2039, and the remainder may be carried forward indefinitely.

The total amount of undistributed earnings of foreign subsidiaries was approximately $410,095 at March 31, 2019 and $314,800 at March 31, 2018. As of March 31, 2019, 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, 2019, 2018 and 2017, we recognized an increase in interest and penalties of $232, $2,363 and $877, respectively. The gross amount of interest and penalties accrued as of March 31, 2019 and 2018 was $6,686 and $6,453, respectively.

As of March 31, 2019, we had gross unrecognized tax benefits, including interest and penalties, of $139,006, of which $23,937 would affect our effective tax rate if realized. For the fiscal year ended March 31, 2019, gross unrecognized tax benefits increased by $10,496.

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

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 $11,117 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:

		Fiscal Year Ended March 31,
		2019				2018				2017
Balance, beginning of period		$	122,056			$	116,085			$	52,799
Additions:
Current year tax positions		13,281				23,007				65,669
Prior year tax positions		288				7,406				5,086
Reduction of prior year tax positions		(1,700		)		(436		)		—
Lapse of statute of limitations		(1,605		)		(24,006		)		(7,469		)
Balance, end of period		$	132,320			$	122,056			$	116,085

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.

16. 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, 2019, there were approximately 5,426 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:

		Fiscal Year Ended March 31,
		2019				2018				2017
Cost of goods sold		$	149,075			$	24,610			$	21,056
Selling and marketing		23,685				13,258				9,963
General and administrative		51,903				58,037				42,908
Research and development		23,037				18,020				7,952
Business reorganization		—				2,424				—
Stock-based compensation expense before income taxes		$	247,700			$	116,349			$	81,879
Income tax benefit		$	(48,383	)		$	(3,561	)		$	(1,552	)
Stock-based compensation expense, net of income tax benefit		$	199,317			$	112,788			$	80,327
Capitalized stock-based compensation expense		$	75,725			$	90,914			$	74,717

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 $17,069 and amounts capitalized as software development costs of $53,779.

As of March 31, 2019, the total future unrecognized compensation cost related to outstanding unvested restricted stock was $345,858 and will be either recognized as compensation expense over a weighted-average period of approximately 2.9 years or capitalized as software development costs.

For the fiscal years ended March 31, 2019, 2018 and 2017, the weighted average fair values of restricted stock units that vested were $264,162, $268,570 and $137,130, 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:

		Fiscal Year Ended March 31,
		2019			2018
Time-based		86			66
Market-based(1)		158			122
Performance-based(1)
New IP		—			21
Major IP		—			20
IP		27			—
Recurrent Consumer Spending ("RCS")		26			—
Total-Performance-based		53			41
Total Restricted Stock Units		297			229

(1) Represents the maximum number of shares eligible to vest.

Time-based restricted stock units granted in fiscal 2019 will vest on April 13, 2020, provided that the 2017 Management Agreement has not been terminated prior to such vesting date, and those granted in fiscal 2018 vested on April 4, 2019.

Market-based restricted stock units granted in fiscal 2019 are eligible to vest on April 13, 2020, provided that the 2017 Management Agreement has not been terminated prior to such vesting date, and those granted in fiscal 2018 vested on April 4, 2019. 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 2019 are eligible to vest on April 13, 2020, provided that the 2017 Management Agreement has not been terminated prior to such vesting date, and those granted in fiscal 2018 vested on April 4, 2019. The performance-based restricted stock units granted in fiscal 2018, of which 50% are tied to "New IP" and 50% to "Major IP" (as defined in the relevant grant agreement), were eligible to vest based on the Company's achievement of certain performance metrics (as defined in the relevant grant agreement) of individual product releases of "New IP" or "Major IP", respectively, measured over a two-year period. The performance-based restricted stock units granted in fiscal 2019, 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 (a) individual product releases of "IP" or (b) "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, 2019 for the "Major IP," "IP," and "RCS" performance-based restricted stock units granted in fiscal 2018 and fiscal 2019.

The unvested portion of time-based, market-based and performance-based restricted stock units held by ZelnickMedia as of March 31, 2019 and 2018 were 526 and 602, respectively. During the fiscal year ended March 31, 2019, 340 restricted stock units previously granted to ZelnickMedia vested and 33 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, 2019, 2018 and 2017 was $103.79, $106.28 and $49.43 per share, respectively.

For the fiscal years ended March 31, 2019, 2018 and 2017, 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 $97.19, $78.53 and $36.37 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:

		Shares (in thousands)			Weighted Average Fair Value on Grant Date
Non-vested restricted stock units at March 31, 2016		4,444			$	22.74
Granted		800			$	42.78
Vested		(2,167	)		$	21.71
Forfeited		(54	)		$	29.87
Non-vested restricted stock units at March 31, 2017		3,023			$	28.65
Granted		3,480			$	102.37
Vested		(2,124	)		$	25.94
Forfeited		(1,053	)		$	109.73
Non-vested restricted stock units at March 31, 2018		3,326			$	81.85
Granted		995			$	103.22
Vested		(1,293	)		$	65.99
Forfeited		(425	)		$	101.38
Non-vested restricted stock units at March 31, 2019		2,603			$	95.35

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:

		Fiscal Year Ended March 31,
		2019						2018						2017
		Employee Market-Based			Non-Employee Market-Based			Employee Market-Based			Non-Employee Market-Based			Employee Market-Based			Non-Employee Market-Based
Risk-free interest rate		2.6	%		2.4	%		1.4	%		2.1	%		0.9	%		0.7	%
Expected stock price volatility		34.9	%		31.4	%		28.4	%		35.5	%		31.2	%		30.1	%
Expected service period (years)		1.5			1.0			1.5			1.0			1.5			1.0
Dividends		None			None			None			None			None			None

The estimated value of market-based restricted stock awards granted to employees during the fiscal years ended March 31, 2019, 2018, and 2017 was $150.91, $141.78, and $63.60 per share, respectively. For the fiscal years ended March 31, 2019, 2018, and 2017, the estimated value of the market-based restricted stock awards granted to ZelnickMedia was $119.21, $185.66, and $51.92 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:

		Shares (in thousands)			Weighted Average Fair Value on Grant Date
Non-vested restricted stock units at March 31, 2016		1,782			$	23.19
Granted		328			$	60.06
Vested		(970	)		$	27.76
Forfeited		(5	)		$	38.38
Non-vested restricted stock units at March 31, 2017		1,135			$	45.05
Granted		614			$	81.20
Vested		(1,100	)		$	33.97
Forfeited		(3	)		$	55.91
Non-vested restricted stock units at March 31, 2018		646			$	79.80
Granted		521			$	90.73
Vested		(695	)		$	52.67
Forfeited		(6	)		$	101.72
Non-vested restricted stock units at March 31, 2019		466			$	123.72

Performance-Based Awards

The estimated value of performance-based restricted stock awards granted to employees during the fiscal year ended March 31, 2019 and 2018 was $100.29 and $102.57, respectively. None were granted to employees during the fiscal year ended March 31, 2017. For the fiscal years ended March 31, 2019, 2018, and 2017, the estimated value of the performance-based restricted stock awards granted to ZelnickMedia was $97.19, $97.78, and $59.27 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:

		Shares (in thousands)			Weighted Average Fair Value on Grant Date
Non-vested restricted stock units at March 31, 2016		179			$	14.45
Granted		33			$	36.37
Vested		(83	)		$	21.92
Forfeited		(28	)		$	22.35
Non-vested restricted stock units at March 31, 2017		101			$	24.64
Granted		3,945			$	101.30
Vested		(47	)		$	27.65
Forfeited		(573	)		$	104.37
Non-vested restricted stock units at March 31, 2018		3,426			$	100.15
Granted		101			$	62.99
Vested		(455	)		$	103.95
Forfeited		(72	)		$	61.88
Non-vested restricted stock units at March 31, 2019		3,000			$	99.37

Employee Stock Purchase Plans

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, 2019, there were approximately 8,943 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 for the fiscal year ended March 31, 2019:

		Fiscal Year Ended March 31,
		2019
Risk-free interest rate		2.1% - 2.5%
Expected stock price volatility		39.1% - 40.0%
Expected service period (years)		0.5
Dividends		None

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.

17. 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, 2019, 2018, and 2017 we repurchased 3,716, 1,513, and 0 shares of our common stock in the open market, respectively, for $362,429, $154,808, and $0, respectively, including commissions of $37, $16 and $0, respectively as part of the program. As of March 31, 2019, 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.

18. INTEREST AND OTHER, NET

		Fiscal Year Ended March 31,
		2019				2018				2017
Interest income		$	38,019			$	21,264			$	7,869
Interest expense		(8,032		)		(22,269		)		(29,569		)
Foreign currency exchange (loss) gain		(505		)		(3,038		)		4,990
Other		(3,369		)		5,091				1,020
Interest and other, net		$	26,113			$	1,048			$	(15,690	)

19. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following table provides the components of accumulated other comprehensive income (loss):

		Foreign currency translation adjustments				Unrealized gain (loss) on derivative instruments				Unrealized gain (loss) on cross-currency swap				Unrealized gain (loss) on available- for-sales securities				Total
Balance at March 31, 2017		$	(47,666	)		$	600			$	—			$	(76	)		$	(47,142	)
Other comprehensive income (loss) before reclassifications		43,379				—				(15,659		)		(1,778		)		25,942
Amounts reclassified from accumulated other comprehensive income (loss)		—				—				7,506				—				7,506
Tax effect on cross-currency swap		—				—				(2,038		)		—				(2,038		)
Balance at March 31, 2018		$	(4,287	)		$	600			$	(10,191	)		$	(1,854	)		$	(15,732	)
Other comprehensive income (loss) before reclassifications		(28,803		)		—				763				2,440				(25,600		)
Amounts reclassified from accumulated other comprehensive income (loss)		—				—				3,726				—				3,726
Tax effect on cross-currency swap		—				—				417				—				417
Balance at March 31, 2019		$	(33,090	)		$	600			$	(5,285	)		$	586			$	(37,189	)

20. BUSINESS REORGANIZATION

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 $972 and $14,742 during the fiscal year ended March 31, 2019 and 2018, respectively, due primarily to employee separation costs. Through March 31, 2019, we had paid $9,502 related to these reorganization activities. As of March 31, 2019, $0 remained accrued for in Accrued expenses and other current liabilities and $6,214 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 and 2018, we had paid $65,355 and $5,350, respectively, related to these reorganization activities. As of March 31, 2019, the 2016 Plan was completed and no further amounts remain accrued or are expected to be incurred.

21. SUPPLEMENTARY FINANCIAL INFORMATION

The following table provides details of our valuation and qualifying accounts:

		Beginning Balance				Additions				Deductions				Other				Ending Balance
Fiscal Year Ended March 31, 2019
Valuation allowance for deferred income taxes (1)		$	195,640			11,850				(107,133		)		(50,944		)		$	49,413
Allowance for doubtful accounts(2)		1,247				651				—				(903		)		995
Fiscal Year Ended March 31, 2018
Valuation allowance for deferred income taxes		$	184,085			11,555				—				—				$	195,640
Price protection, sales returns and other allowances		$	65,114			59,674				(74,936		)		3,191				$	53,043
Allowance for doubtful accounts		1,369				—				(122		)		—				1,247
Total accounts receivable allowances		$	66,483			$	59,674			$	(75,058	)		$	3,191			$	54,290
Fiscal Year Ended March 31, 2017
Valuation allowance for deferred income taxes		$	170,574			13,511				—				—				$	184,085
Price protection, sales returns and other allowances		$	45,153			127,744				(100,934		)		(6,849		)		$	65,114
Allowance for doubtful accounts		399				974				(4		)		—				1,369
Total accounts receivable allowances		$	45,552			$	128,718			$	(100,938	)		$	(6,849	)		$	66,483

(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.

22. 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, 2019:

		Quarter
Fiscal Year Ended March 31, 2019		First				Second				Third				Fourth
Net revenue		$	387,982			$	492,667			$	1,248,738			$	539,007
Gross profit		256,617				257,787				350,254				280,092
Income from operations		70,846				25,986				51,779				58,061
Net income		$	71,693			$	25,367			$	179,948			$	56,829
Earnings per share:
Basic earnings per share		$	0.63			$	0.22			$	1.59			$	0.50
Diluted earnings per share		$	0.62			$	0.22			$	1.57			$	0.50

		Quarter
Fiscal Year Ended March 31, 2018		First				Second				Third				Fourth
Net revenue		$	418,216			$	443,562			$	480,840			$	450,274
Gross profit		223,647				197,014				212,857				261,063
Income (loss) from operations		50,219				(11,319		)		8,852				87,825
Net (loss) income		$	60,276			$	(2,736	)		$	25,140			$	90,853
Earnings (loss) per share:
Basic earnings (loss) per share		$	0.57			$	(0.03	)		$	0.22			$	0.80
Diluted earnings (loss) per share		$	0.56			$	(0.03	)		$	0.21			$	0.77

Basic and diluted earnings (loss) per share are computed independently for each of the quarters presented. Therefore, the sum of quarterly basic and diluted earnings (loss) per share information may not equal annual basic and diluted earnings per share.

23. ACQUISITIONS

On January 31, 2017, we completed the acquisition of privately-held Social Point, S.L. (“Social Point”), a Spanish free-to-play mobile game developer, for consideration of $175,000 in cash and the issuance of 1,480 shares of our common stock, plus contingent earn-out consideration of up to an aggregate of $25,900 in cash and shares of our common stock. During the fiscal year ended March 31, 2019, we paid the remaining $25,000 deferred amounts related to this acquisition. The cash portion was funded from our cash on hand. Certain of the shares that were issued to continuing employees are subject to transferability restrictions and forfeiture provisions requiring their continued employment subject to certain exceptions over the three-year period following the closing and are therefore considered share-based compensation over the service period. We acquired Social Point to leverage its strong portfolio of technology, assembled workforce, and existing free-to-play mobile games in order to expand and enhance our game offerings, particularly on mobile platforms.

The acquisition-date fair value of the consideration transferred totaled $238,736. Of this amount, $143,566 was recorded as Goodwill, $111,550 was recorded as Intangible assets, and $(16,380) was recorded as Tangible assets, net of liabilities assumed from Social Point. Goodwill, which is not deductible for U.S. income tax purposes, represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired, and is primarily attributable to the assembled workforce of the acquired business and expected synergies at the time of the acquisition.

During the fiscal year ended March 31, 2018, we recorded adjustments to finalize the purchase accounting of the Social Point acquisition, which resulted in a net increase in Goodwill of $4,245 and a corresponding decrease in Tangible net liabilities assumed. The measurement period for the contingent consideration has expired, and we have not made any payments for contingent consideration.

SIGNATURES

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.

	TAKE-TWO INTERACTIVE SOFTWARE, INC.
	By:	/s/ STRAUSS ZELNICK
		Strauss Zelnick Chairman and Chief Executive Officer
May 13, 2019

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		Chairman and Chief Executive Officer (Principal Executive Officer)
Strauss Zelnick			May 13, 2019
/s/ LAINIE GOLDSTEIN		Chief Financial Officer (Principal Financial and Accounting Officer)
Lainie Goldstein			May 13, 2019
/s/ MICHAEL DORNEMANN
Michael Dornemann		Lead Independent Director		May 13, 2019
/s/ J MOSES
J Moses		Director		May 13, 2019
/s/ MICHAEL SHERESKY
Michael Sheresky		Director		May 13, 2019
/s/ LAVERNE SRINIVASAN
LaVerne Srinivasan		Director		May 13, 2019
/s/ SUSAN TOLSON
Susan Tolson		Director		May 13, 2019
/s/ PAUL VIERA
Paul Viera		Director		May 13, 2019