Take-Two Interactive (TTWO) 10-K risk factor changes: FY2021 vs FY2020

Risks relating to our [removed: business][added: business and industry]

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

*Grand Theft Auto* products contributed [removed: 23.0%] [added: 29.2%] of our net revenue for the fiscal year ended March 31, [removed: 2020,] [added: 2021,] and the five best-selling franchises (including *Grand Theft Auto*), which may change year over year, in the aggregate accounted for [removed: 87.4%] [added: 84.1%] of our net revenue for the fiscal year ended March 31, [removed: 2020.][added: 2021.]

The extent to which COVID-19 has an impact on our business, [removed: operations and] [added: operations, or] financial results will depend on numerous evolving factors that we may not be able to accurately predict, including the duration and scope of the pandemic; governmental, [removed: business] [added: business,] and individuals’ actions that have been and continue to be taken in response to the pandemic; economic activity and related actions taken in response to the pandemic; the effect on consumer demand for our products and the discretionary spending patterns of our customers, including the ability of our customers to pay for our products; our ability to develop, market, and sell our products, including as a result of [added: travel restrictions and people working from home; the impact on the operations of our counterparties, including the physical retail, digital download online platforms, and cloud streaming services we rely on for the distribution of our products, the suppliers who manufacture our physical products, and other third parties with which we partner (e.g. to market or ship our products); any closures of our, our customers', and counterparties' offices and facilities; additional volatility in exchange rates; the impact of potential inflation; and the impact of reductions in interest rates by the Federal Reserve and other central banks, including on our short-term investment portfolio.]

Such circumstances may also impact the effectiveness of [removed: the Company's] [added: our] quality controls and game testing measures.

Further, key personnel could contract [removed: COVID-19] [added: COVID-19,] hindering their availability and productivity.

Additionally, sports organizations' operations and seasons [added: have and] may be altered [removed: or even canceled] based on the response to COVID-19.

While we have developed and continue to develop plans to help mitigate the negative impact of the [removed: outbreak] [added: pandemic] on our business, these efforts may not be effective, and a protracted economic downturn may limit the effectiveness of our mitigation efforts.

If we or our third-party developers experience unanticipated development delays, financial difficulties, or additional costs, for [removed: example] [added: example,] as a result of [removed: the coronavirus pandemic (COVID-19),] [added: COVID-19,] we may not be able to release titles according to our schedule and at budgeted costs.

We derive most of our revenue from the sale of products made for video game platforms manufactured by third parties, such as Sony's PS4 and [added: PS5 and] Microsoft's Xbox [removed: One,] [added: One and Xbox Series X|S,] which comprised [removed: 74.7%] [added: 74.6%] of our net revenue by product platform for the fiscal year ended March 31, [removed: 2020.][added: 2021.]

[removed: When] [added: Historically, when] next generation consoles are announced or introduced into the market, consumers have typically reduced their purchases of products for prior-generation consoles in anticipation of purchasing a next-generation console and products for that console.

Consumer purchases of our games and services may decline or fluctuate as a result of a number of factors, including their level of satisfaction with our games and services, our ability to improve and innovate our annualized titles, our ability to adapt our games and services to new platforms, outages and disruptions of online services, the games and services offered by our competitors, our marketing and advertising efforts or declines in consumer activity generally as a result of economic downturns, for [removed: example] [added: example,] as a result of COVID-19, among others.

Connectivity issues could affect our [added: profitability and our] ability to sell and provide online services for our [removed: products and could affect our profitability.][added: products.]

Given the increasing global usage of online [removed: platforms] [added: platforms, in part] as a result of the COVID-19 pandemic, the risks of connectivity issues may be heightened.

Such issues also could affect our ability to provide game-related services and could have a material adverse effect on our business, financial [removed: condition] [added: condition,] and operating results.

We rely on the efficient and uninterrupted operation of complex information technology systems and networks, some of which are within Take-Two and some of which are managed [removed: and/or] [added: or] hosted by third-party providers.

All information technology systems and networks are potentially vulnerable to damage or interruption from a variety of sources, including but not limited to cyber-attacks, computer viruses, malicious software, security [removed: breach,] [added: breaches,] energy blackouts, natural disasters, terrorism, [removed: war] [added: war,] and telecommunication failures.

We may also face sophisticated attacks, referred to as advanced persistent threats, which are cyber-attacks aimed at compromising our intellectual property and other [removed: commercially-sensitive] [added: commercially sensitive] information, such as the source code and game assets for our software or confidential customer or employee information, which remain undetected for prolonged periods of time.

Information technology [removed: system,] [added: system disruptions,] network failures, or security breaches could negatively affect our business continuity, operations and financial results.

However, the techniques used to exploit, disable, damage, disrupt or gain access to our networks, our products and services, supporting technological infrastructure, [added: intellectual property and other assets change frequently, continue to evolve in sophistication and volume, and often are not detected for long periods of time.]

In addition, the costs to respond to, mitigate, [removed: and/or] [added: or] notify affected parties of cyber-attacks and other security vulnerabilities are significant.

Any failure to prevent or mitigate security breaches or cyber risks, or detect or respond adequately to a security breach or cyber risk, could result in a loss of anticipated revenue, interruptions to our products and services, [removed: cause us] [added: our having] to incur significant remediation and notification costs, degrade the user experience, cause consumers to lose confidence in our products and [removed: services] [added: services,] and significant legal and financial costs.

Additionally, applicable insurance policies may be insufficient to reimburse [removed: the company] [added: us] for all such losses, and it is uncertain whether we will be able to maintain the current level of insurance coverage in the future on reasonable terms or at all.

Virtual economies involve the use of virtual currency [removed: and/or] [added: or] virtual assets that can be used or redeemed by a player within a particular game or service.

These [removed: third party] [added: third-party] networks, as well as our own internal systems and websites, and the related security measures may be breached as a result of third-party action, including intentional misconduct by computer hackers, employee error, malfeasance or otherwise, and result in someone obtaining unauthorized access to our customers' information or our data—including our intellectual property and other confidential business information—or our information technology systems.

[added: We are subject to certain privacy and data protection laws, including those in the U.S.] Certain activities related to processing the personal data of individuals in the [removed: European Union ("E.U.")] [added: E.U.] are conducted by our [removed: United Kingdom ("U.K.")-based] [added: U.K.-based] data controller or our local entities in the E.U. The U.S. Children's Online Privacy Protection Act also regulates the collection, use, and disclosure of personal information from children under 13 years of age.

Privacy and data protection laws [added: and industry terms] are rapidly changing and likely will continue to do so for the foreseeable future, which could have an impact on our approach to operating and marketing our [removed: games.][added: games and which may harm the sales of our products or decrease the size of our potential audience.]

For example, the E.U. General Data Protection Regulation ("GDPR") [added: and the UK Data Protection Act 2018 ("DPA 2018") both] became effective [removed: on] [added: in] May [removed: 25, 2018, replacing Data Protection Directive 95/46/EC.][added: 2018.]

[removed: applies] [added: GDPR and DPA 2018 apply] to us because we receive and process the personal information of individuals in the [removed: E.U.,] [added: E.U.] and [added: the U.K., and] we maintain certain local entities in the E.U. [added: and the U.K.] responsible for processing personal information.

GDPR [removed: contains] [added: and DPA 2018 contain] significant penalties for non-compliance.

[removed: If that were to occur we may be required to] seek licenses, authorizations, or approvals from relevant regulators, the granting of which may be dependent on us meeting certain capital and other requirements and we may be subject to additional regulation and oversight, all of which could significantly increase our operating costs.

Although we have structured and operate our skill tournaments [added: and game mechanics, including random digital item mechanics,] with applicable laws in mind, including any applicable laws relating to gambling, and believe that playing these games does not constitute gambling, our skill tournaments [added: or game mechanics] could [removed: in the future] become subject to gambling-related rules and [removed: regulations] [added: regulations, or be deemed violative of current rules] and [added: regulations, and] expose us to civil and criminal penalties.

Further, [removed: some of our online games and other services include] random digital item [removed: mechanics, which] [added: mechanics] may become subject to regulations in various jurisdictions.

We have also grown our product offerings that are available through digital download, including virtual currency, through our existing franchises such as *Grand Theft Auto* and *NBA [removed: 2K,*] [added: 2K*,] as well as through our mobile product offerings.

For example, we may offer games that do not attract sufficient purchases of virtual currency, which may cause our investments into this product space, such as through our [removed: acquisition] [added: acquisitions] of Social [removed: Point,] [added: Point and Playdots,] to fail to realize the expected benefits.

We are also highly dependent on the expertise, skills and knowledge of our key creative personnel responsible [removed: for content creation and development of our *Grand Theft Auto* and other hit titles and titles based on other brands.]

[added: Although we currently believe our] tax estimates are reasonable, the estimation process is inherently uncertain, and such estimates are not binding on tax authorities.

Further, our effective tax rate [added: or tax payable] could be adversely affected by a variety of factors, including changes in the business, the mix [added: and level] of earnings between countries with differing statutory tax rates, changes in [added: the realizability of deferred] tax [added: assets, changes in tax] elections, and changes in applicable tax laws.

Although we cannot predict whether, or in what form, any legislation based on such proposals may be adopted by the countries in which we do business, future tax reform based on such proposals may [removed: increase the amount of taxes we pay and adversely affect] [added: have an adverse impact on] our [removed: operating results] [added: effective tax rate, tax payments,] and [removed: cash flows.][added: financial condition in future periods.]

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

Additionally, while we have seen increased demand for our products due to stay-at-home orders, the curtailment of certain other forms of entertainment, and other pandemic-related factors that make consumers more inclined to spend time at home, benefiting our financial results and operating metrics, the trends in fiscal year 2021 with respect to our revenues, net income, and other financial results and operating metrics may not be indicative of results for future periods, particularly if these pandemic-related factors become less significant.

In 2020, Sony and Microsoft each launched their respective next generation consoles.

for content creation and development of our *Grand Theft Auto* and other hit titles and titles based on other brands.

In addition, our results of operations may be

We may be

appropriate player age group and specific content descriptors, such as graphic violence, profanity or sexually explicit material.

Additionally, cultural differences may affect consumer preferences and as a result, some of

In 2020, the U.K. left the European Union ("E.U.") ("Brexit").

Subsequently, the U.K. and the E.U. struck a bilateral trade and cooperation deal governing the future relationship between the U.K. and the E.U. (the "Trade and Cooperation Agreement"), which took effect on May 1, 2021.

There remains unavoidable uncertainties and risks to our business related to Brexit and the new relationship between the U.K. and E.U., which will continue to be developed and defined.

The Trade and Cooperation Agreement sets out preferential arrangements in areas such as the trade in goods and services but does not reach the level of integration that existed while the U.K. was an E.U. member state, which could have a detrimental impact on our U.K. growth.

We may need to

Competition for these licenses may also increase the advances, guarantees

Risks related to legal or regulatory compliance

The U.K. also implemented an Age Appropriate Design Code that applies to how personal data is used for individuals up to age 18.

California also enacted the California Privacy Rights Act ("CPRA"), which updates the CCPA, and Virginia enacted the Consumer Data Protection Act, both effective January 1, 2023.

Further, and most notably in the mobile ecosystem, companies that provide the platforms on which our games are played are changing the terms on how publishers can collect and use personal data obtained from users on those platforms.

If that were to occur, we may be required to

Further, in 2019, the World Health Organization included "gaming disorder" in the 11th revision of the International Classification of Diseases, leading some to consider legislation and policies aimed at mitigating the overuse of, and overspending within, video games.

Moreover, the inclusion of random digital item mechanics has attracted the attention of the interactive gaming community, and if the future implementation of these features creates a negative perception of gameplay fairness or other negative perceptions, our reputation and brand could be harmed and revenue could be negatively impacted.

For example, on December 14, 2017, the Federal Communications Commission voted to repeal net neutrality regulations in the U.S., and, following that decision, several states enacted net neutrality regulations.

Risks related to financial and economic condition

On March 11, 2021, the U.S. enacted the American Rescue Plan Act of 2021 (“ARPA”) which provided numerous tax and other stimulus measures.

One such measure will expand limitation of compensation deductions for certain covered employees of publicly held corporations, beginning in 2027, to also include our next five highly compensated employees.

It is possible that these changes could have an adverse impact on our effective tax rate, tax payments, and financial condition in future periods.

General Risk Factors

Such events may adversely impact critical infrastructure,

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

In 2020, we expect Sony and Microsoft to launch their respective next generation consoles, although COVID-19 or other events may impact the timing of release and availability of these new consoles.

intellectual property and other assets change frequently, continue to evolve in sophistication and volume, and often are not detected for long periods of time.

We are subject to certain privacy and data protection laws, including those in the United States ("U.S.").

GDPR

Although we currently believe our

In the fiscal year ended March 31, 2019, we released our valuation allowance on certain U.S. deferred tax assets as a result of a determination that it was more-likely-than-not that such deferred tax assets would be realized.

We will continue to evaluate our ability to realize our U.S. deferred tax assets.

If future evidence suggests that any changes are required to reflect the amount of our U.S. deferred tax asset that is more-likely-than-not to be realized, we will adjust our valuation allowance as needed in the appropriate period.

On June 21, 2018, the U.S. Supreme Court issued its decision in South Dakota v.

Wayfair, which overturned previous case law that precluded states from requiring retailers to collect and remit sales tax on sales made to in-state customers unless the retailer had a physical presence in the state.

Although this case is limited to sales tax collection obligations, we continue to monitor the potential impact of this decision on our state income tax footprint.

The ultimate amount of tax payable in a given financial statement period may be materially affected by sudden or unforeseen changes in tax laws, changes in the mix and level of earnings by taxing jurisdictions, or changes to existing accounting rules or regulations.

For example, on July 27, 2015, the U.S. Tax Court issued an opinion in Altera Corp. v.

Commissioner, which concluded that related parties in an intercompany cost-sharing arrangement are not required to share costs related to stock-based compensation.

In February 2016, the U.S. Internal Revenue Service appealed the decision to the U.S Court of Appeals for the Ninth Circuit.

On June 7, 2019, the Ninth Circuit reversed the 2015 decision of the U.S. Tax Court.

As a result of this decision, we are no longer reflecting a net tax benefit within our financial statements related to the removal of stock-based compensation from our intercompany cost-sharing arrangement.

The taxpayer in the case requested a rehearing before the full Ninth Circuit which was denied on November 12, 2019.

The case remains potentially open for judicial review by the U.S. Supreme Court.

As a result, the final outcome of the case is uncertain.

In February 2020, the taxpayer petitioned the U.S. Supreme Court to review the Ninth Circuit’s decision and is awaiting the Supreme Court’s decision as to whether it will hear the case.

We will continue to monitor ongoing developments and potential impacts to our financial statements.

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

The Tax Cuts and Jobs Act (the "Tax Act") subjects a U.S. shareholder to current tax on GILTI earned by foreign subsidiaries.

The FASB Staff Q&A Topic No. 5, Accounting for Global Intangible Low-Taxed Income, states that an entity can make an accounting policy election either to recognize deferred taxes for temporary differences that are expected to reverse as GILTI in future years or provide for the tax expense related to GILTI resulting from those items in the year the tax is incurred.

We have elected to recognize the resulting tax on GILTI as an expense in the period incurred.

disproportionately.

For example, the NBA season, along with several other professional sports leagues, have cancelled or delayed their seasons as a result of the COVID-19 outbreak.

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

This risk has been heightened by the COVID-19 pandemic.

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

Our products are marketed worldwide through a diverse spectrum of promotional programs, such as social media advertising, digital and online marketing, television advertising, print advertising, retail merchandising, website development, and event sponsorship.

Our ability to sell our products and services is dependent in part on the success of these programs.

If the marketing for our products and services fails to resonate with consumers, particularly during the holiday season or other key selling periods, or if advertising rates or other media placement costs increase, these factors could have a material adverse influence on our business, financial condition and operating results.

Quality third-party developers are continually in high demand.

Our development payments may not be sufficient to permit developers to

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

In the event of a significant decline in revenue, we may not be able to dispose of facilities, reduce personnel, or make other changes to our cost structure without disruption to our operations or without significant termination and exit costs.

Management may not be able to implement such actions in a timely manner, if at all, to offset an immediate shortfall in revenue and profit.

We develop and publish products principally through Rockstar Games, 2K, Private Division, [removed: and] Social [removed: Point.][added: Point, and Playdots.]

Our products are currently designed for console gaming [removed: systems, such as Sony's PS4, Microsoft's Xbox One, and Nintendo's Switch,] [added: systems] and PC, including smartphones and tablets.

Sales of *Grand Theft Auto* products generated [removed: 23.0%] [added: 29.2%] of our net revenue for the fiscal year ended March 31, [removed: 2020.][added: 2021.]

*Economic Environment and Retailer Performance.* We continue to monitor economic conditions, including the impact of the COVID-19 pandemic, that may unfavorably affect our businesses, such as deteriorating consumer demand, [removed: delays in development,] pricing pressure on our products, credit quality of our receivables, and foreign currency exchange rates.

[removed: In] [added: During fiscal year 2021, as in] the final quarter of fiscal year 2020, we noted a positive impact to our results that we believe was partly due to increased consumer engagement with our products because of [added: the] COVID-19 related business closures and movement restrictions, such as "shelter in place" and "lockdown" orders, [removed: being] implemented around the world, as well as the online accessibility and social nature of our products.

However, we cannot be certain as to the duration of these [removed: effects] [added: effects, the impact of vaccination efforts or of the lifting of certain restrictions on them,] and the potential offsetting impacts of deteriorating economic conditions and decreased consumer spending generally.

We have developed and continue to develop plans to help mitigate the negative impact of the pandemic on our business, such as our transition, based on our concern for the health and [added: safety of our teams, to working from home for the vast majority of our teams over the last year, which to date has resulted in minimal disruption.]

However, [added: despite largely positive outcomes to date,] these efforts may [added: ultimately] not be effective, and a protracted economic downturn may limit the effectiveness of our mitigation efforts.

Any of these considerations described above could cause or contribute to the risks described, above, in [removed: Item 1A] [added: [Item 1A](#id55210c8f40244b886767e1bec81de64_19)] of this Form 10-K and could materially adversely affect our business, financial condition, results of operations, or stock price.

Therefore, the effects of COVID-19 [removed: will] [added: may] not be fully reflected in our financial results until future periods, and, at this time, we are not able to predict its ultimate impact on our business.

Our five largest customers accounted for [removed: 71.5%, 70.1%] [added: 78.4%, 71.5%] and [removed: 70.7%] [added: 70.1%] of net revenue during the fiscal years ended March 31, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018,] [added: 2019,] respectively.

As of March 31, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] five customers comprised [removed: 58.1%] [added: 77.6%] and [removed: 66.6%] [added: 58.1%] of our gross accounts receivable, respectively, with our significant customers (those that individually comprised more than 10% of our gross accounts receivable balance) accounting for [removed: 48.8%] [added: 69.2%] and [removed: 55.8%] [added: 48.8%] of such balance at March 31, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] respectively.

We had two customers who accounted for [removed: 29.4%] [added: 50.4%] and [removed: 19.4%] [added: 18.8%] of our gross accounts receivable as of March 31, [removed: 2020] [added: 2021] and two customers who accounted for [removed: 40.1%] [added: 29.4%] and [removed: 15.7%] [added: 19.4%] of our gross accounts receivable as of March 31, [removed: 2019.][added: 2020.]

We did not have any additional customers that exceeded 10% of our gross accounts receivable as of March 31, [removed: 2020] [added: 2021] and [removed: 2019.][added: 2020.]

The COVID-19 pandemic [added: has led, and] may [removed: lead] [added: continue] to [added: lead, to] increased consolidation as larger, better capitalized competitors will be in a stronger position to withstand prolonged periods of economic downturn and sustain their business through the financial volatility.

*Hardware Platforms.* We derive most of our revenue from the sale of products made for video game consoles manufactured by third parties, [removed: such as Sony's PS4 and Microsoft's Xbox One,] which comprised [removed: 74.7%] [added: 74.6%] of our net revenue by product platform for the fiscal year ended [removed: March 31, 2020.]

When new hardware platforms are introduced, such as those [removed: slated for release] [added: released] in [removed: calendar] [added: November] 2020 by Sony and Microsoft, demand for interactive entertainment used on older platforms typically declines, which may negatively affect our business during the market transition to the new consoles.

The new Sony and Microsoft consoles [removed: are expected to] provide "backwards compatibility" (i.e. the ability to play games for the previous generation of consoles), which could mitigate the risk of such a decline.

Further, COVID-19 or other events, may impact the [removed: timing of release and] availability of these new consoles, which may also affect demand.

As disclosed in our "Results of Operations," below, net revenue from digital online channels comprised [removed: 77.0%] [added: 86.6%] of our net revenue for the fiscal year ended March 31, [removed: 2020.][added: 2021.]

We expect online delivery of games and game offerings to continue to grow and to [removed: become] [added: be] the primary part of our business over the [removed: long-term.][added: long term.]

Fiscal [removed: 2020] [added: 2021] Financial Summary

Our Net revenue for fiscal year ended March 31, [removed: 2020] [added: 2021] was led by titles from a variety of our top franchises, primarily *NBA 2K; Grand Theft Auto [removed: V] [added: Online*] and [removed: Grand] [added: *Grand] Theft Auto [removed: Online;] [added: V;] Red Dead Redemption 2* and *Red Dead [removed: Online*, which released on PC in November 2019;] [added: Online*;] *Borderlands 3*, [removed: which released in September 2019;] and [removed: *The Outer Worlds*, which released in October 2019*.*] [added: our *WWE 2K* franchise*.*] Our Net revenue increased to [removed: $3,089.0] [added: $3,372.8] million, an increase of [removed: $420.6] [added: $283.8] million or [removed: 15.8%] [added: 9.2%] compared to the fiscal year ended March 31, [removed: 2019.][added: 2020.]

For the fiscal year ended March 31, [removed: 2020,] [added: 2021,] our [removed: Net] [added: net] income was [removed: $404.5] [added: $588.9] million, as compared to [removed: Net income of $333.8] [added: $404.5] million in the prior year.

Diluted earnings per share for the fiscal year ended March 31, [removed: 2020] [added: 2021] was [removed: $3.54,] [added: $5.09,] as compared to Diluted income per share of [removed: $2.90] [added: $3.54] for the fiscal year ended March 31, [removed: 2019.][added: 2020.]

Our operating income for the fiscal year ended March 31, [removed: 2020] [added: 2021] increased compared to the operating income for fiscal year ended March 31, [removed: 2019,] [added: 2020,] due primarily to higher Gross profit, which was due primarily to higher revenue from the titles described [removed: above] [added: above, lower capitalized software amortization as a percentage of net revenue,] and lower internal royalties as a percentage of net revenue, partially offset by higher Operating expenses primarily due to higher [removed: Selling and marketing expense.][added: headcount.]

At March 31, [removed: 2020,] [added: 2021,] we had [removed: $1,993.4] [added: $2,060.2] million of Cash and cash equivalents and Restricted cash and cash equivalents, compared to [removed: $1,392.0] [added: $1,993.4] million at March 31, [removed: 2019.][added: 2020.]

The increase in Cash and cash equivalents and Restricted cash and cash equivalents from March 31, [removed: 2019] [added: 2020] was due primarily to Net cash provided by operating activities from sales primarily from the previously mentioned titles*,* partially offset by investments in software development and licenses as well as royalty [removed: payments,][added: payments.]

[removed: These] [added: This] net [removed: increases were] [added: increase was partially] offset by [added: (i)] Net cash used in [added: investing activities primarily related to changes in bank time deposits and net purchases of available for sale securities, our acquisition of Playdots, and purchases of fixed assets and (ii) Net cash used in] financing activities, which was primarily related to tax payments related to net share settlements of our restricted stock.

See [removed: Note] [added: [Note] 1 - Basis of Presentation and Significant Accounting [removed: Policies] [added: Policies](#id55210c8f40244b886767e1bec81de64_112)] in the Notes to our Consolidated Financial Statements in this Annual Report on Form 10-K.

See [removed: Note] [added: [Note] 1 - Basis of Presentation and Significant Accounting [removed: Policies.][added: Policies](#id55210c8f40244b886767e1bec81de64_112).]

| | | | Fiscal Year Ended March 31, | | | | | | | | | | | | | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | |]

| | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | | | | | Increase/(decrease) | | | | | | Increase/(decrease) % | | | [removed: | | | | | | | | | | | | | | | | | |]

For the fiscal year ended March 31, [removed: 2020,] [added: 2021,] Net Bookings increased by [removed: $61.6] [added: $562.2] million as compared to the prior year [removed: period] due primarily to [removed: *Borderlands 3,* which released] [added: increases] in [removed: September 2019,] [added: Net Bookings from our *NBA 2K* franchise,] *Grand Theft Auto Online* and *Grand Theft Auto V,* our [removed: *NBA 2K*] [added: *Mafia*] franchise, [removed: *The Outer Worlds*] [added: *PGA TOUR 2K21,*] which released in [removed: October 2019, *Red Dead Online*, *Civilization VI*, and *Ancestors: The Humankind Odyssey*,] [added: August 2020, *Two Dots,*] which [removed: released] [added: was part of our Playdots acquisition completed] in [removed: August 2019,] [added: September 2020*,* and *Dragon City,*] partially offset by a decrease in Net Bookings from [removed: *Red Dead Redemption 2,*] [added: *Borderlands 3*,] which released [removed: on PS4 and Xbox One] in [removed: October 2018] [added: September 2019,] and [removed: PC] [added: *The Outer Worlds,* which released] in [removed: November 2019.][added: October 2019*.*]

*In this section, we discuss the results of our operations for the fiscal year ended March 31, [removed: 2020] [added: 2021] compared to the fiscal year ended March 31, [removed: 2019.][added: 2020.]

For the comparison of fiscal year [removed: 2019] [added: 2020] to fiscal year [removed: 2018,] [added: 2019,] refer [removed: to Part] [added: to* *[Part] II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations” of] [added: Operations”](http://www.sec.gov/ix?doc=/Archives/edgar/data/946581/000162828020008291/ttwo-20200331.htm#i522fc58b4b794171b49b2aac24c9e306_43)* *of] our Annual Report on Form 10-K for the year ended March 31, [removed: 2019.*][added: 2020.*]

| | | | | | | Fiscal Year Ended March 31, | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

| | | | | | | [removed: 2020 | | | | | | | | | | | | | | | | | | 2019 | | | | | | | | | | | |] [added: 2021] | | | | | | [removed: 2018] | | | | | | [added: 2020] | | | | | | | | | | | | [added: 2019] | | | | | | | | |

| Net revenue | | | | | | $ | [removed: 3,088,970] [added: 3,372,772] | | | | | 100.0 | | % | | | | $ | [removed: 2,668,394] [added: 3,088,970] | | | | | 100.0 | | % | | | | $ | [removed: 1,792,892] [added: 2,668,394] | | | | | 100.0 | | % | [removed: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

| Cost of goods sold | | | | | | [removed: 1,542,450] [added: 1,535,085] | | | | | | [removed: 49.9] [added: 45.5] | | % | | | | [removed: 1,523,644] [added: 1,542,450] | | | | | | [removed: 57.1] [added: 49.9] | | % | | | | [removed: 898,311] [added: 1,523,644] | | | | | | [removed: 50.1] [added: 57.1] | | % | [removed: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

We expect that engagement trends will continue to be notably higher than they were pre-pandemic; however, as the return to normalcy continues, we expect a moderation of the trends that benefited our industry over the past year.

March 31, 2021.

Content Release Highlights

During fiscal year 2021, we released new content for a number of our biggest franchises, including, but not limited to *Grand Theft Auto Online, Red Dead Online, Borderlands,* and *Sid Meier’s Civilization*.

Our 2K label also released *NBA 2K21* and *PGA TOUR 2K21*.

To date we have announced that, during fiscal year 2022, Rockstar Games will release *Grand Theft Auto V* for the PS5 and Xbox Series X|S, Private Division will release *OlliOlli World* digitally, and 2K will release *NBA 2K22* and *WWE 2K22*.

In addition, throughout the year, we expect our labels to deliver new content for our franchises.

We will also continue to invest in opportunities that we believe will enhance and scale our business and have the potential to drive growth over the long-term.

| | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Net Bookings | | | $ | 3,552,598 | | | | | $ | 2,990,358 | | | | | $ | 562,240 | | | | | 18.8 | | % |

| Net revenue | | | | | | $ | 3,372,772 | | | | | 100.0 | | % | | | | $ | 3,088,970 | | | | | 100.0 | | % | | | | $ | 283,802 | | | | | 9.2 | | % |

| Internal royalties | | | | | | 637,652 | | | | | | 18.9 | | % | | | | 483,697 | | | | | | 15.7 | | % | | | | 153,955 | | | | | | 31.8 | | % |

| Licenses | | | | | | 260,721 | | | | | | 7.7 | | % | | | | 170,408 | | | | | | 5.5 | | % | | | | 90,313 | | | | | | 53.0 | | % |

| Product costs | | | | | | 239,915 | | | | | | 7.1 | | % | | | | 277,147 | | | | | | 9.0 | | % | | | | (37,232) | | | | | | (13.4) | | % |

| Cost of goods sold | | | | | | 1,535,085 | | | | | | 45.5 | | % | | | | 1,542,450 | | | | | | 49.9 | | % | | | | (7,365) | | | | | | (0.5) | | % |

| Gross profit | | | | | | $ | 1,837,687 | | | | | 54.5 | | % | | | | $ | 1,546,520 | | | | | 50.1 | | % | | | | $ | 291,167 | | | | | 18.8 | | % |

The increase was due primarily to an increase in net revenue of (i) $378.6 million from our *NBA 2K* franchise*,* (ii) $267.4 million from *Grand Theft Auto Online* and *Grand Theft Auto V,* (iii) $75.5 million from our *Mafia* franchise, (iv) $65.0 million from *PGA TOUR 2K21,* which released in August 2020, (vi) $24.1 million from *Dragon City,* and (vii) $20.5 million from *Two Dots,* which was part of our Playdots.

The increase was due to an increase in net revenue from *Grand Theft Auto V* and *Grand Theft Auto Online,* our *NBA 2K* franchise, *Dragon City, Two Dots*, and our *Mafia* franchise, partially offset by a decrease in net revenue from *Borderlands 3* and *The Outer Worlds.*

The increase was due to an increase in net revenue from our *NBA 2K* franchise, *Grand Theft Auto Online* and *Grand Theft Auto V*,

*Civilization VI,* *Dragon City* and *Two Dots*.

The percentage increase was due primarily to lower capitalized software amortization as a percentage of net revenue based on the timing of releases and a reversal of stock-based compensation expense as a result of forfeited awards (see [N](#id55210c8f40244b886767e1bec81de64_163)[ote 17](#id55210c8f40244b886767e1bec81de64_163) [- Stock](#id55210c8f40244b886767e1bec81de64_163)[\-B](#id55210c8f40244b886767e1bec81de64_163)[ased](#id55210c8f40244b886767e1bec81de64_163) [Compensation](#id55210c8f40244b886767e1bec81de64_163)), partially offset by higher internal royalties as a percentage of net revenue due to the timing of when royalties are earned, and product mix.

Changes in foreign currency exchange rates increased net revenue and gross profit by $11.2 million and $7.5 million, respectively, in the fiscal year ended March 31, 2021 as compared to the prior year.

| (thousands of dollars) | | | | | | 2021 | | | | | | % of net revenue | | | | | | 2020 | | | | | | % of net revenue | | | | | | Increase/(decrease) | | | | | | % Increase/(decrease) | | |

| Selling and marketing | | | | | | $ | 444,985 | | | | | 13.2 | | % | | | | $ | 458,424 | | | | | 14.8 | | % | | | | $ | (13,439) | | | | | (2.9) | | % |

| General and administrative | | | | | | 390,683 | | | | | | 11.6 | | % | | | | 318,235 | | | | | | 10.3 | | % | | | | 72,448 | | | | | | 22.8 | | % |

| Research and development | | | | | | 317,311 | | | | | | 9.4 | | % | | | | 296,398 | | | | | | 9.6 | | % | | | | 20,913 | | | | | | 7.1 | | % |

| Business reorganization | | | | | | (272) | | | | | | — | | % | | | | 83 | | | | | | — | | % | | | | (355) | | | | | | (427.7) | | % |

| Total operating expenses | | | | | | $ | 1,208,303 | | | | | 35.8 | | % | | | | $ | 1,121,253 | | | | | 36.3 | | % | | | | $ | 87,050 | | | | | 7.8 | | % |

| | | | | | | 2021 | | | | | | 2020 | | |

Selling and marketing expenses decreased by $13.4 million in the fiscal year ended March 31, 2021 as compared to the prior year, due primarily to $49.1 million in lower overall marketing expenses due primarily to less spend on *Borderlands 3* and *Red Dead Redemption 2*, partially offset by marketing expenses for *Two Dots* with no comparable costs in the prior year period.

The net decrease was partially offset by an increase in personnel expenses, primarily due to increased headcount.

During the fiscal year ended March 31, 2021, business reorganization expense decreased by $0.4 million as compared to the prior year period and was not material.

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| (thousands of dollars) | | | | | | 2021 | | | | | | % of net revenue | | | | | | 2020 | | | | | | % of net revenue | | | | | | Increase/(decrease) | | | | | | % Increase/(decrease) | | |

| Interest income | | | | | | $ | 18,701 | | | | | 0.6 | | % | | | | $ | 47,341 | | | | | 1.5 | | % | | | | $ | (28,640) | | | | | (60.5) | | % |

| Interest expense | | | | | | (6,207) | | | | | | (0.2) | | % | | | | (2,637) | | | | | | (0.1) | | % | | | | (3,570) | | | | | | 135.4 | | % |

| Other | | | | | | (4,425) | | | | | | (0.1) | | % | | | | (2,610) | | | | | | (0.1) | | % | | | | (1,815) | | | | | | 69.5 | | % |

The decrease was due primarily to a $28.6 million decrease in interest income due to lower interest rates.

We endeavor to be the most creative, innovative and efficient company in our industry.

Our core strategy is to capitalize on the popularity of video games by developing and publishing high-quality interactive entertainment experiences across a range of genres.

We focus on building compelling entertainment franchises by publishing a select number of titles for which we can create sequels and incremental revenue opportunities through virtual currency, add-on content, and in-game purchases.

Most of our intellectual property is internally owned and developed, which we believe best positions us financially and competitively.

We have established a portfolio of proprietary software content for the major hardware platforms in a wide range of genres, including action, adventure, family/casual, racing, role-playing, shooter, sports and strategy, which we distribute worldwide.

We believe that our commitment to creativity and innovation is a distinguishing strength, enabling us to differentiate our products in the marketplace by combining advanced technology with compelling storylines and characters that provide unique gameplay experiences for consumers.

We have created, acquired or licensed a group of highly recognizable brands to match the broad consumer demographics that we serve, ranging from adults to children and game enthusiasts to casual gamers.

Another cornerstone of our strategy is to support the success of our products in the marketplace through innovative marketing programs and global distribution on platforms and through channels that are relevant to our target audience.

Our revenue is primarily derived from the sale of internally developed software titles and software titles developed by third parties.

Operating margins are dependent in part upon our ability to release new, commercially successful software products and to manage effectively their development and marketing costs.

We have internal development studios located in Australia, Canada, China, Czech Republic, Hungary, India, Spain, South Korea, the United Kingdom, and the United States.

Software titles published by our Rockstar Games label are primarily internally developed.

We expect Rockstar Games, our wholly-owned publisher of the *Grand Theft Auto*, *Max Payne*, *Midnight Club*, *Red Dead Redemption,* and other popular franchises, to continue to be a leader in the action/adventure product category and to create groundbreaking entertainment.

We believe that Rockstar Games has established a uniquely original, popular cultural phenomenon with its *Grand Theft Auto* series, which is the interactive entertainment industry's most iconic and critically acclaimed brand and has sold-in over 320 million units.

The latest installment, *Grand Theft Auto V*, has sold-in over 125 million units worldwide and includes access to *Grand Theft Auto Online*.

On October 26, 2018, Rockstar Games launched *Red Dead Redemption 2*, which has been a critical and commercial success that set numerous entertainment industry records.

To date, *Red Dead Redemption 2* has sold-in more than 30 million units worldwide.

Rockstar Games is also well known for developing brands in other genres, including the *L.A. Noire*, *Bully* and *Manhunt* franchises.

Rockstar Games continues to expand on our established franchises by developing sequels, offering downloadable episodes, content, and virtual currency.

Our 2K label has published a variety of popular entertainment properties across all key platforms and across a range of genres including shooter, action, role-playing, strategy, sports and family/casual entertainment.

We expect 2K to continue to develop new, successful franchises in the future.

2K's internally owned and developed franchises include the critically acclaimed, multi-million unit selling *BioShock*, *Mafia*, *Sid Meier's Civilization,* and *XCOM* series.

2K also publishes successful externally developed franchises, such as *Borderlands*.

2K's realistic sports simulation titles include our flagship *NBA 2K* series, which continues to be the top-ranked NBA basketball video game, the *WWE 2K* professional wrestling series, and *PGA Tour 2K*.

In March 2020, 2K announced a multi-year partnership with the National Football League encompassing multiple future video games that will be non-simulation football game experiences and will launch starting in fiscal year 2022.

Our Private Division label is dedicated to bringing titles from top independent developers to market and is the publisher and owner of *Kerbal Space Program*.

During the fiscal year 2020, Private Division released *The Outer Worlds* and *Ancestors: The Humankind Odyssey*, based on new IP from renowned industry creative talent.

Additionally, Private Division*,* has announced that *Disintegration* is planned for release in fiscal year 2021 and *Kerbal Space Program 2* in fiscal year 2022.

Social Point develops and publishes popular free-to-play mobile games that deliver high quality, deeply-engaging entertainment experiences, including its two most successful games, *Dragon City* and *Monster Legends*.

In addition, Social Point has a robust development pipeline with a number of exciting games planned for launch in the coming years.

We are continuing to execute on our growth initiatives in Asia, where our strategy is to broaden the distribution of our existing products and expand our online gaming presence, especially in China and South Korea.

2K has secured a multi-year license from the NBA to develop an online version of the NBA simulation game in China, Taiwan, South Korea, and Southeast Asia.

*NBA 2K Online*, our free-to-play NBA simulation game, which was co-developed by 2K and Tencent, is the top online PC sports game in China with over 49 million registered users.

We have released two iterations of *NBA 2K Online* and continue to enhance the title with new features.

In February 2017, we expanded our relationship with the NBA through the creation of the NBA 2K League.

Launched in May 2018, this groundbreaking competitive gaming league is jointly owned by us and the NBA and consists of teams operated by actual NBA franchises.

The NBA 2K League follows a professional sports league format: head-to-head competition throughout a regular season followed by a bracketed playoff system and a finals match-up that was held in August in each of the NBA 2K League's first two seasons.

safety of our teams, to working from home for the vast majority of our teams, which to date has resulted in minimal disruption.

Product Releases

We released the following key titles in fiscal year 2020:

Since short-term investments mature relatively quickly and can be reinvested at the [removed: then-current] [added: then current] market rates, interest income on a portfolio consisting of short-term securities is more subject to market fluctuations than a portfolio of longer-term maturities.

As of March 31, [removed: 2020,] [added: 2021,] we had [removed: $644.0] [added: $1,308.7] million of short-term investments, which included [removed: $453.0] [added: $729.9] million of available-for-sale securities.

We also had [removed: $1,357.7] [added: $1,422.9] million of cash and cash equivalents that are comprised primarily of money market funds and bank-time deposits.

We determined that, based on the composition of our investment portfolio, there was no material interest rate risk exposure to our Consolidated Financial Statements or liquidity as of March 31, [removed: 2020.][added: 2021.]

Under our Credit Agreement, loans will bear interest at a rate of (a) 0.250% to 0.750% above a certain base rate [removed: (5.50%] [added: (3.25%] at March 31, [removed: 2020)] [added: 2021)] or (b) 1.125% to 1.750% above LIBOR (approximately [removed: 1.66%] [added: 1.10%] at March 31, [removed: 2020),] [added: 2021),] which rates are determined by reference to our consolidated total net leverage ratio.

At March 31, [removed: 2020,] [added: 2021,] there were no outstanding borrowings under our Credit Agreement.

For the fiscal years ended March 31, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] our foreign currency translation adjustment was a [removed: loss] [added: gain] of [removed: $27.4] [added: $51.3] million and a loss of [removed: $28.8] [added: $27.4] million, respectively.

We recognized a foreign currency exchange transaction [removed: loss] [added: gain] of [removed: $3.6] [added: $0.7] million, a loss of [removed: $0.5] [added: $3.6] million, and a loss of [removed: $3.0] [added: $0.5] million for the fiscal years ended March 31, [added: 2021,] 2020, [removed: 2019,] and [removed: 2018,] [added: 2019,] respectively, in Interest and other, net in our Consolidated Statements of Operations.

At March 31, [removed: 2019,] [added: 2021,] we had [removed: $116.6] [added: $92.1] million of forward contracts outstanding to buy foreign currencies in exchange for U.S. dollars and [removed: $87.8] [added: $140.5] million of forward contracts outstanding to sell foreign currencies in exchange for U.S. dollars all of which have maturities of less than one year.

For the fiscal years ended March 31, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018,] [added: 2019,] we recorded a loss of [removed: $1.0] [added: $3.6] million, a [removed: gain] [added: loss] of [removed: $16.8] [added: $1.0] million, and a [removed: loss] [added: gain] of [removed: $19.5] [added: $16.8] million, respectively, related to foreign currency forward contracts in Interest and other, net on [removed: the] [added: our] Consolidated Statements of Operations.

As of March 31, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] the fair value of these outstanding forward contracts was a loss of [removed: $0.0] [added: $0.1] million and a loss [removed: $0.4] [added: $0.0] million, respectively, and is included in accrued and other current liabilities.

[removed: We believe the counterparties to these foreign currency forward contracts are credit-worthy multinational] commercial banks and that the risk of counterparty nonperformance is not material.

For the fiscal year ended March 31, [removed: 2020, 42.5%] [added: 2021, 40.2%] of our revenue was generated outside the United States.

Using sensitivity analysis, a hypothetical 10% increase in the value of the U.S. dollar against all currencies would decrease revenue by [removed: 4.3%,] [added: 4.0%,] while a hypothetical 10% decrease in the value of the U.S. dollar against all currencies would increase revenue by [removed: 4.3%.][added: 4.0%.]

We believe the counterparties to these foreign currency forward contracts are creditworthy multinational

We develop and publish products principally through Rockstar Games, 2K, Private Division, [removed: and] Social [removed: Point.][added: Point, and Playdots.]

Our products are currently designed for console gaming systems, [removed: such as] [added: including, but not limited to,] the Sony Computer Entertainment, Inc. ("Sony") PlayStation®4 [removed: ("PS4"),] [added: ("PS4") and PlayStation5 ("PS5"),] Microsoft Corporation ("Microsoft") Xbox One® ("Xbox [removed: One"),] [added: One")] and [added: Xbox Series X|S ("Xbox Series X|S"), and] Nintendo's SwitchTM ("Switch"), [removed: and] [added: as well as] personal computers ("PC"), including smartphones and tablets.

We make all of our filings with the Securities and Exchange Commission ("SEC") available free of charge on our website under the caption [removed: "Corporate—SEC] [added: "Financial Information—SEC] Filings." Included in these filings are our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports, which are available as soon as reasonably practicable after we electronically file or furnish such materials with the SEC pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934.

We have established a portfolio of proprietary software content for the major hardware platforms in a wide range of genres, including action, adventure, family/casual, [removed: racing,] role-playing, shooter, sports and strategy, which we distribute worldwide.

We have created, [removed: acquired] [added: acquired,] or licensed a group of highly recognizable brands to match the broad consumer demographics that we serve, ranging from adults to children and game enthusiasts to casual gamers.

Another cornerstone of our strategy is to support the success of our products in the marketplace through [added: innovative marketing programs and global distribution on platforms and through channels that are relevant to our target audience.]

We have [removed: 4,488] [added: 5,079] employees working in game development in studios around the world, including some of the most well-known names in the business.

In addition, Private Division is dedicated to bringing titles from top independent developers to market, and Social Point [added: and Playdots] further [removed: enhances] [added: enhance] our development capabilities with a track record of producing multiple hits in the free-to-play mobile sector.

We currently own the intellectual property rights to [removed: 26] [added: 27] proprietary brands.

In addition, we selectively develop titles based on licensed properties, including [removed: sports,] [added: sports leagues,] and also publish externally developed titles.

We use a product investment review process to evaluate potential titles for investment, to review existing titles in development, and to assess titles after release [removed: to measure] [added: by measuring] their performance in the market and the return on our investment.

The product investment review process includes reviews of each project at various stages of development by our executive management team and the senior management of our publishing labels and [added: also] includes coordination between our sales and marketing personnel before the launch of titles.

Leverage Emerging Technologies, Platforms, and Distribution Channels, Including Digitally Delivered Content. Interactive entertainment played online and on mobile platforms, [removed: including] [added: such as] tablets and smartphones, presents opportunities to enhance our growth and profitability.

We have internal development studios located in Australia, Canada, China, Czech Republic, Hungary, India, [added: South Korea,] Spain, the United [removed: Kingdom,] [added: Kingdom (U.K.),] and the United [removed: States.][added: States (U.S.).]

As of March 31, [removed: 2020,] [added: 2021,] we had a research and development staff of [removed: 4,488] [added: 5,079] employees with the technical capabilities to develop software titles for all major consoles, PCs, and mobile platforms in multiple languages and territories.

We expect Rockstar Games, our wholly-owned publisher of the *Grand Theft Auto*, *Max Payne*, *Midnight Club*, *Red Dead [removed: Redemption,*] [added: Redemption*,] and other popular franchises, to continue to be a leader in the action/adventure product category and to create groundbreaking entertainment.

We believe that Rockstar Games has established a uniquely original, popular cultural phenomenon with its *Grand Theft Auto* series, which is the interactive entertainment industry's most iconic and critically acclaimed brand and has sold-in over [removed: 320] [added: 335] million units worldwide.

The latest installment, *Grand Theft Auto V*, has sold-in over [removed: 125] [added: 145] million units worldwide and includes access to *Grand Theft Auto Online*.

[removed: On October 26, 2018, Rockstar Games launched] *Red* *Dead Redemption [removed: 2,*] [added: 2*,] which has been a critical and commercial success that set numerous entertainment industry [removed: records.][added: records, has sold-in more than 35 million units worldwide to date.]

Rockstar Games continues to expand on our established franchises by developing sequels, offering downloadable episodes, [removed: content,] and [removed: virtual currency.][added: additional content.]

2K's internally owned and developed franchises include the critically acclaimed, multi-million unit selling *BioShock*, *Mafia*, *Sid Meier's [removed: Civilization,*] [added: Civilization*,] and *XCOM* series.

In March 2020, 2K announced a multi-year partnership with the National Football League encompassing multiple future video games that will be non-simulation football game [removed: experiences and will launch starting in fiscal year 2022.][added: experiences.]

Private Division. Our Private Division label is dedicated to bringing titles from [removed: top independent developers] [added: the industry's leading creative talent] to market and is the publisher and owner of [removed: *Kerbal] [added: Kerbal] Space [removed: Program*.][added: Program.]

[removed: During fiscal year 2020,] Private Division [added: also] released *The Outer Worlds* and [removed: *Ancestors: The] [added: *Ancestors:* *The] Humankind [removed: Odyssey,*] [added: Odyssey*,] based on new IP from renowned industry creative talent.

[removed: Additionally, Private Division has announced that *Disintegration* is planned for release in fiscal year 2021 and] *Kerbal Space Program 2* [added: is planned for release] in fiscal year [removed: 2022.][added: 2023.]

*NBA 2K Online*, our free-to-play NBA simulation game, that is based on the console edition of NBA 2K, which was co-developed by 2K and Tencent, is the top online PC sports game in China with over [removed: 49] [added: 52] million registered users.

We have expanded our relationship with the NBA through the [removed: creation of the] NBA 2K League.

[removed: Launched in May 2018, this] [added: This] groundbreaking competitive gaming league is jointly owned by us and the NBA and consists of teams operated by actual NBA franchises.

The NBA 2K League follows a professional sports league format: head-to-head competition throughout a regular [removed: season] [added: season,] followed by a bracketed playoff system and a finals match-up that was held in August in each of the NBA 2K League's first [removed: two] [added: three] seasons.

The intellectual property rights we have created or acquired for our internally-owned portfolio of brands include *BioShock*, *Bully*, *Carnival Games*, *Dragon City*, *Grand Theft Auto*, *Kerbal Space [removed: Program, L.A.] [added: Program*, *L.A.] Noire*, *Mafia*, [removed: *Manhunt, Max] [added: *Manhunt*, *Max] Payne*, *Midnight Club*, *Monster Legends*, *Red Dead*, *Sid Meier's Civilization*, [added: *Two Dots*,] and *XCOM*.

We believe that content ownership facilitates our [added: internal product development efforts and maximizes profit potential.]

We place a purchase order for the manufacture of our products with Sony, Nintendo, or Microsoft's approved replicator and then send software code [removed: and a prototype of the product] to the manufacturer, together with related artwork, user instructions, warranty information, brochures and packaging designs for approval, defect testing and manufacture.

*Sony.* Effective March 23, 2017, we entered into a PlayStation Global Developer and Publisher Agreement with Sony Computer Entertainment, Inc. and certain of its affiliates, pursuant to which Sony granted us the right and license to develop, publish, have manufactured, market, advertise, distribute and sell PlayStation compatible products for all PlayStation [removed: systems, including the PS4.][added: systems.]

The agreement requires us to submit products to Sony for approval and for us to make royalty payments to Sony based on the number of units manufactured or revenue from [added: digitally] downloaded content.

In addition, products for PlayStation systems are required to be manufactured by [removed: Sony approved] [added: Sony-approved] manufacturers.

The term of the [removed: agreement] [added: agreement, as amended,] expires on March 31, [removed: 2021,] [added: 2022,] with automatic one-year renewal terms [removed: thereafter.][added: thereafter (unless one party gives the other notice of termination).]

Sony may terminate the agreement for any or no reason upon [removed: thirty] [added: 30] days’ notice.

*Microsoft.* Under the terms of the license agreements that we have entered into with Microsoft Corporation and its affiliates, Microsoft granted us the right and license to develop, publish, have manufactured, market, advertise, distribute and sell Xbox compatible [removed: products for the Xbox One and Xbox 360.][added: products.]

The agreements require us to submit products to Microsoft for approval and [removed: for us] to make royalty payments to Microsoft based on the number of units manufactured or revenue from [added: digitally] downloaded content.

In addition, products for the Xbox [removed: One and Xbox 360] [added: consoles] are required to be manufactured by [removed: Microsoft approved] [added: Microsoft-approved] manufacturers.

Playdots. On September 4, 2020, we acquired privately held Playdots, Inc. ("Playdots") for consideration having an acquisition date fair value of $195.5 million, consisting of $97.8 million in cash and the issuance of 0.6 million shares of our common stock.

(See [Note](#id55210c8f40244b886767e1bec81de64_1750) [22](#id55210c8f40244b886767e1bec81de64_1750) [](#id55210c8f40244b886767e1bec81de64_1750)[\- Acquisitions](#id55210c8f40244b886767e1bec81de64_1750) of our Consolidated Financial Statements.) Founded in 2013 and based in New York, New York, Playdots builds mobile games with unique and thoughtful designs.

Playdots is best known for *Two Dots*, which has been downloaded over 80 million times since its launch six years ago and continues to deeply engage audiences throughout the world.

The NBA 2K League's fourth season is set to take place in calendar year 2021.

On September 30, 2020, we entered into a PlayStation 5 Amendment, with an effective date of May 1, 2020 (the “PS5 Amendment”), to our existing PlayStation Global Developer and Publisher Agreement.

The PS5 Amendment amends the existing agreement to include the PlayStation 5 interactive entertainment system in the definition of systems in the agreement and to extend all of the terms and conditions of the existing agreement to our PlayStation 5 products and services.

Effective as of November 17, 2005, we entered into an Xbox 360 Publisher License Agreement with Microsoft for the Xbox 360 console (the “Xbox 360 Agreement”).

Effective as of July 1, 2020, we entered into an Xbox Console Publisher License Agreement with Microsoft for the Xbox Series X|S and Xbox One consoles (the “Xbox Next Gen Agreement” and together with Xbox 360 Agreement, the “Xbox Agreements”).

immediately in the event of our bankruptcy or insolvency.

We have one operating and reportable segment.

Human Capital

*Human Capital Management.* One of Take-Two’s most important assets is our people.

With 6,495 full-time employees as of March 31, 2021, of which 3,341 were employed outside of the United States, we are constantly focused on our teams – their success, their structure and how best to support them given their particular needs and projects.

49% of our employees are located in North America, 35% in Europe, and 16% in the Asia-Pacific region; 77% of our employees are focused on product development.

Due to COVID-19, this past year was a challenging one for our employees, and, given the largely remote working environment, we implemented programs to make sure our people felt supported in their roles, providing enhanced manager training to help strengthen teams despite the physical distance, broadening our wellness and mental health offerings, encouraging people to step away from their screens when they could and spending a lot of time listening to employee feedback.

Despite the challenges of the pandemic, creativity and innovation remained the core tenets of our organization and the lifeblood of our ongoing success.

The creative teams at our labels are renowned for their consistent ability to deliver games that set new benchmarks for excellence.

We support our creative and corporate teams by focusing on talent retention and acquisition, including through: offering job development and skills training initiatives, extensive employee benefits and numerous well-being programs, and partnering with the leadership at our labels to foster the types of cultures our leaders believe best support and grow the creative processes for their particular teams.

*Diversity, Equity, and Inclusion.* We firmly believe that diverse teams are more valuable and effective, and that diversity is key to our success.

We are committed to enhancing workforce diversity at Take-Two, and we strive to provide an inclusive workplace in which everyone feels respected, heard, and safe.

We believe our culture of compassion and respect fosters a warm, welcoming environment for all qualified candidates and colleagues.

Specific efforts we take include company-sponsored service projects in the communities in which we operate; providing financial and other support to organizations working to eradicate social and racial injustice as well as providing educational, athletic, and other opportunities to underserved communities; working with organizations to support the rights of the LGBTIQ community; endeavoring to expand the diversity of our industry’s candidate pool through scholarships to minority game design students and contributions to organizations providing STEM opportunities to children in underserved communities; delivering interview training and career counseling to young adults in those same communities; and celebrating cultural differences through various employee affinity groups and company events and offerings.

*Talent Assessment & Development and Employee Experience.* We strongly believe in internal growth opportunities and career development tracks.

We also recognize the importance of our employees staying current in an ever-changing industry.

To that end, our global Learning & Development team curates a wide variety of training materials and programs

targeting both hard skills development and career progression as well as programs in leadership development and employee round tables.

Further, our compliance training program seeks to ensure that our employees recognize and report any signs of harassment, discrimination, retaliation, or other inappropriate behaviors in the workplace and that they understand and abide by our Code of Business Conduct and other internal policies.

Our learning and development programs are designed to be closely aligned with our performance management process and succession planning.

Our formalized performance management process provides the platform for evaluating each individual employee’s contributions to the team and our success, with a focus on regular communication and transparency.

We work hard to ensure that development opportunities are individually tailored and that all decisions regarding hiring, career progression, and compensation are based on qualifications, work ethic, and job performance.

Beyond formal performance management, we check in with our teams throughout the year with global town hall meetings, "pulse" surveys, culture assessments and team qualities and values workshops.

The feedback generated through these tools helps to ensure we are providing a supportive, dynamic, and stimulating work environment for all of our employees.

These efforts and more contributed to Take-Two being named one of The Wall Street Journal’s Best Managed US Companies in 2018, included among EM360’s Top 10 Companies with the Best Employee/Employer Relations in 2019, and listed on Fortune’s Great Places to Work list in 2019 and 2021 and Best Places to Work in NYC list in 2020.

*Compensation and Benefits.* The main objectives of our compensation and benefit programs are to attract, retain, motivate, and reward our employees, who operate in a highly competitive and technologically challenging environment.

We offer competitive compensation packages designed to incentivize high individual and company performance.

We regularly review our compensation and benefits packages from both an internal and external standpoint to ensure competitiveness, including through industry benchmarking analysis.

We seek to link compensation (including annual changes in compensation) to our overall and business unit performance, as well as each individual’s contribution to the results achieved.

The emphasis on our overall performance is intended to align our employees’ financial interests with the interests of our shareholders.

In addition to awarding Restricted Stock Units to employees at certain levels, we also offer an Employee Stock Purchase Plan to further align the interests of our employees with our shareholders.

We also provide a comprehensive benefits package that includes traditional offerings, such as medical, dental vision, retirement, disability, accident and life insurance, prescription drugs, and leaves, and also includes programs such as well-being, fitness reimbursement, mental health benefits, mental health awareness training for Human Resources personnel and managers throughout the Company, and charitable giving with a company match.

We were incorporated under the laws of the State of Delaware in 1993 and are headquartered in New York, New York with approximately 5,800 employees globally.

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

To date, *Red Dead Redemption 2* has sold-in more than 30 million units worldwide.

The latest installment, *Borderlands 3*, launched on September 13, 2019.

internal product development efforts and maximizes profit potential.

The term of the Xbox One license agreement renewed on April 1, 2020 for a two-month period expiring on June 1, 2020, while the parties negotiate a new license agreement also covering Microsoft's next generation consoles.

Price protection, sales returns and other allowances amounted to $98.0 million, $81.7 million and $59.7 million during the fiscal years ended March 31, 2020, 2019 and 2018, respectively.

Employees

As of March 31, 2020, we had 5,800 full-time employees, of which 3,123 were employed outside of the United States.

None of our regular employees is subject to collective bargaining agreements.

We consider our relations with employees to be satisfactory.

Refer to [Note 15](#id55210c8f40244b886767e1bec81de64_157) [](#id55210c8f40244b886767e1bec81de64_157)[\- Commit](#id55210c8f40244b886767e1bec81de64_157)[ments and Contingen](#id55210c8f40244b886767e1bec81de64_157)[c](#id55210c8f40244b886767e1bec81de64_157)[ies](#id55210c8f40244b886767e1bec81de64_157) to our Consolidated Financial Statements for disclosures regarding our legal proceedings.

We are, or may become, subject to demands and claims (including intellectual property and employment related claims) and are involved in routine litigation in the ordinary course of business which we do not believe to be material to our business or financial statements.

We have appropriately accrued amounts related to certain of these claims and legal and other proceedings.

While it is reasonably possible that a loss may be incurred in excess of the amounts accrued in our financial statements, we believe that such losses, unless otherwise disclosed, would not be material.

| ☒ | | | Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | | | [removed: | | |]

| | | | For the fiscal year ended March 31, [removed: 2020 | | |] [added: 2021] | | |

| ☐ | | | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | | | [removed: | | |]

| | | | For the transition period from to . | | | [removed: | | |]

As of May [removed: 7, 2020,] [added: 5, 2021,] there were [removed: 113,942,760] [added: 115,656,093] shares of the Registrant's Common Stock outstanding, net of treasury stock.

Portions of the registrant's definitive proxy statement for the [removed: 2020] [added: 2021] Annual Meeting of Stockholders

| | | | | | | PAGE | | | [removed: | | | | | |]

| [Item [removed: 1](#i522fc58b4b794171b49b2aac24c9e306_16). | | | [Business](#i522fc58b4b794171b49b2aac24c9e306_16) | | | [1](#i522fc58b4b794171b49b2aac24c9e306_16)] [added: 1](#id55210c8f40244b886767e1bec81de64_16).] | | | [added: [Business](#id55210c8f40244b886767e1bec81de64_16)] | | | [added: [1](#id55210c8f40244b886767e1bec81de64_16)] | | |

| [Item [removed: 1A.](#i522fc58b4b794171b49b2aac24c9e306_19)] [added: 1A.](#id55210c8f40244b886767e1bec81de64_19)] | | | [Risk [removed: Factors](#i522fc58b4b794171b49b2aac24c9e306_19) | | | [6](#i522fc58b4b794171b49b2aac24c9e306_19) | | |] [added: Factors](#id55210c8f40244b886767e1bec81de64_19)] | | | [added: [7](#id55210c8f40244b886767e1bec81de64_19)] | | |

| [Item [removed: 1B.](#i522fc58b4b794171b49b2aac24c9e306_22)] [added: 1B.](#id55210c8f40244b886767e1bec81de64_22)] | | | [Unresolved Staff [removed: Comments](#i522fc58b4b794171b49b2aac24c9e306_22) | | | [22](#i522fc58b4b794171b49b2aac24c9e306_22) | | |] [added: Comments](#id55210c8f40244b886767e1bec81de64_22)] | | | [added: [22](#id55210c8f40244b886767e1bec81de64_22)] | | |

| [Item [removed: 2.](#i522fc58b4b794171b49b2aac24c9e306_25) | | | [Properties](#i522fc58b4b794171b49b2aac24c9e306_25) | | | [22](#i522fc58b4b794171b49b2aac24c9e306_25)] [added: 2.](#id55210c8f40244b886767e1bec81de64_25)] | | | [added: [Properties](#id55210c8f40244b886767e1bec81de64_25)] | | | [added: [22](#id55210c8f40244b886767e1bec81de64_25)] | | |

| [Item [removed: 3.](#i522fc58b4b794171b49b2aac24c9e306_28)] [added: 3.](#id55210c8f40244b886767e1bec81de64_28)] | | | [Legal [removed: Proceedings](#i522fc58b4b794171b49b2aac24c9e306_28) | | | [23](#i522fc58b4b794171b49b2aac24c9e306_28) | | |] [added: Proceedings](#id55210c8f40244b886767e1bec81de64_28)] | | | [added: [22](#id55210c8f40244b886767e1bec81de64_28)] | | |

| [Item [removed: 4.](#i522fc58b4b794171b49b2aac24c9e306_31)] [added: 4.](#id55210c8f40244b886767e1bec81de64_31)] | | | [Mine Safety [removed: Disclosures](#i522fc58b4b794171b49b2aac24c9e306_31) | | | [23](#i522fc58b4b794171b49b2aac24c9e306_31) | | |] [added: Disclosures](#id55210c8f40244b886767e1bec81de64_31)] | | | [added: [22](#id55210c8f40244b886767e1bec81de64_31)] | | |

| [Item [removed: 5.](#i522fc58b4b794171b49b2aac24c9e306_37)] [added: 5.](#id55210c8f40244b886767e1bec81de64_37)] | | | [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#i522fc58b4b794171b49b2aac24c9e306_37) | | | [24](#i522fc58b4b794171b49b2aac24c9e306_37) | | |] [added: Securities](#id55210c8f40244b886767e1bec81de64_37)] | | | [added: [23](#id55210c8f40244b886767e1bec81de64_37)] | | |

| [Item [removed: 6.](#i522fc58b4b794171b49b2aac24c9e306_40)] [added: 6.](#id55210c8f40244b886767e1bec81de64_40)] | | | [Selected Financial [removed: Data](#i522fc58b4b794171b49b2aac24c9e306_40) | | | [26](#i522fc58b4b794171b49b2aac24c9e306_40) | | |] [added: Data](#id55210c8f40244b886767e1bec81de64_40)] | | | [added: [25](#id55210c8f40244b886767e1bec81de64_40)] | | |

| [Item [removed: 7.](#i522fc58b4b794171b49b2aac24c9e306_43)] [added: 7.](#id55210c8f40244b886767e1bec81de64_43)] | | | [Management's Discussion and Analysis of Financial Condition and Results of [removed: Operations](#i522fc58b4b794171b49b2aac24c9e306_43) | | | [26](#i522fc58b4b794171b49b2aac24c9e306_43) | | |] [added: Operations](#id55210c8f40244b886767e1bec81de64_43)] | | | [added: [25](#id55210c8f40244b886767e1bec81de64_43)] | | |

| [Item [removed: 7A.](#i522fc58b4b794171b49b2aac24c9e306_46)] [added: 7A.](#id55210c8f40244b886767e1bec81de64_46)] | | | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#i522fc58b4b794171b49b2aac24c9e306_46) | | | [37](#i522fc58b4b794171b49b2aac24c9e306_46) | | |] [added: Risk](#id55210c8f40244b886767e1bec81de64_46)] | | | [added: [34](#id55210c8f40244b886767e1bec81de64_46)] | | |

| [Item [removed: 8.](#i522fc58b4b794171b49b2aac24c9e306_49)] [added: 8.](#id55210c8f40244b886767e1bec81de64_49)] | | | [Financial Statements and Supplementary [removed: Data](#i522fc58b4b794171b49b2aac24c9e306_49) | | | [38](#i522fc58b4b794171b49b2aac24c9e306_49) | | |] [added: Data](#id55210c8f40244b886767e1bec81de64_49)] | | | [added: [35](#id55210c8f40244b886767e1bec81de64_49)] | | |

| [Item [removed: 9.](#i522fc58b4b794171b49b2aac24c9e306_52)] [added: 9.](#id55210c8f40244b886767e1bec81de64_52)] | | | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#i522fc58b4b794171b49b2aac24c9e306_52) | | | [38](#i522fc58b4b794171b49b2aac24c9e306_52) | | |] [added: Disclosure](#id55210c8f40244b886767e1bec81de64_52)] | | | [added: [35](#id55210c8f40244b886767e1bec81de64_52)] | | |

| [Item [removed: 9A.](#i522fc58b4b794171b49b2aac24c9e306_55)] [added: 9A.](#id55210c8f40244b886767e1bec81de64_55)] | | | [Controls and [removed: Procedures](#i522fc58b4b794171b49b2aac24c9e306_55) | | | [39](#i522fc58b4b794171b49b2aac24c9e306_55) | | |] [added: Procedures](#id55210c8f40244b886767e1bec81de64_55)] | | | [added: [35](#id55210c8f40244b886767e1bec81de64_55)] | | |

| [Item [removed: 9B.](#i522fc58b4b794171b49b2aac24c9e306_58)] [added: 9B.](#id55210c8f40244b886767e1bec81de64_58)] | | | [Other [removed: Information](#i522fc58b4b794171b49b2aac24c9e306_58) | | | [39](#i522fc58b4b794171b49b2aac24c9e306_58) | | |] [added: Information](#id55210c8f40244b886767e1bec81de64_58)] | | | [added: [36](#id55210c8f40244b886767e1bec81de64_58)] | | |

| [PART [removed: III](#i522fc58b4b794171b49b2aac24c9e306_61) | | | | | |] [added: III](#id55210c8f40244b886767e1bec81de64_61)] | | | | | | | | |

| [Item [removed: 10.](#i522fc58b4b794171b49b2aac24c9e306_64)] [added: 10.](#id55210c8f40244b886767e1bec81de64_64)] | | | [Directors, Executive Officers and Corporate [removed: Governance](#i522fc58b4b794171b49b2aac24c9e306_64) | | | [40](#i522fc58b4b794171b49b2aac24c9e306_64) | | |] [added: Governance](#id55210c8f40244b886767e1bec81de64_64)] | | | [added: [37](#id55210c8f40244b886767e1bec81de64_64)] | | |

| [Item [removed: 11.](#i522fc58b4b794171b49b2aac24c9e306_67)] [added: 11.](#id55210c8f40244b886767e1bec81de64_67)] | | | [Executive [removed: Compensation](#i522fc58b4b794171b49b2aac24c9e306_67) | | | [40](#i522fc58b4b794171b49b2aac24c9e306_67) | | |] [added: Compensation](#id55210c8f40244b886767e1bec81de64_67)] | | | [added: [37](#id55210c8f40244b886767e1bec81de64_67)] | | |

| [Item [removed: 12.](#i522fc58b4b794171b49b2aac24c9e306_70)] [added: 12.](#id55210c8f40244b886767e1bec81de64_70)] | | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#i522fc58b4b794171b49b2aac24c9e306_70) | | | [40](#i522fc58b4b794171b49b2aac24c9e306_70) | | |] [added: Matters](#id55210c8f40244b886767e1bec81de64_70)] | | | [added: [37](#id55210c8f40244b886767e1bec81de64_70)] | | |

| [Item [removed: 13.](#i522fc58b4b794171b49b2aac24c9e306_73)] [added: 13.](#id55210c8f40244b886767e1bec81de64_73)] | | | [Certain Relationships and Related Transactions, and Director [removed: Independence](#i522fc58b4b794171b49b2aac24c9e306_73) | | | [40](#i522fc58b4b794171b49b2aac24c9e306_73) | | |] [added: Independence](#id55210c8f40244b886767e1bec81de64_73)] | | | [added: [37](#id55210c8f40244b886767e1bec81de64_73)] | | |

| [Item [removed: 14.](#i522fc58b4b794171b49b2aac24c9e306_76)] [added: 14.](#id55210c8f40244b886767e1bec81de64_76)] | | | [Principal Accounting Fees and [removed: Services](#i522fc58b4b794171b49b2aac24c9e306_76) | | | [40](#i522fc58b4b794171b49b2aac24c9e306_76) | | |] [added: Services](#id55210c8f40244b886767e1bec81de64_76)] | | | [added: [37](#id55210c8f40244b886767e1bec81de64_76)] | | |

| [Item [removed: 15.](#i522fc58b4b794171b49b2aac24c9e306_82)] [added: 15.](#id55210c8f40244b886767e1bec81de64_82)] | | | [Exhibits, Financial Statement [removed: Schedules](#i522fc58b4b794171b49b2aac24c9e306_82) | | | [41](#i522fc58b4b794171b49b2aac24c9e306_82) | | |] [added: Schedules](#id55210c8f40244b886767e1bec81de64_82)] | | | [added: [38](#id55210c8f40244b886767e1bec81de64_82)] | | |

| [Item [removed: 16.](#i522fc58b4b794171b49b2aac24c9e306_85)] [added: 16.](#id55210c8f40244b886767e1bec81de64_85)] | | | [Form 10-K [removed: Summary](#i522fc58b4b794171b49b2aac24c9e306_85) | | | [45](#i522fc58b4b794171b49b2aac24c9e306_85) | | |] [added: Summary](#id55210c8f40244b886767e1bec81de64_85)] | | | [added: [42](#id55210c8f40244b886767e1bec81de64_85)] | | |

| | | | [Index to Financial [removed: Statements](#i522fc58b4b794171b49b2aac24c9e306_88) | | | [46](#i522fc58b4b794171b49b2aac24c9e306_88) | | |] [added: Statements](#id55210c8f40244b886767e1bec81de64_88)] | | | [added: [43](#id55210c8f40244b886767e1bec81de64_88)] | | |

| | | | | | |

| --- | --- | --- | --- | --- | --- |

| OR | | | | | |

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

| [PART I](#id55210c8f40244b886767e1bec81de64_13) | | | | | | | | |

| [PART II](#id55210c8f40244b886767e1bec81de64_34) | | | | | | | | |

| [PART IV](#id55210c8f40244b886767e1bec81de64_79) | | | | | | | | |

| | | | [Signatures](#id55210c8f40244b886767e1bec81de64_184) | | | [83](#id55210c8f40244b886767e1bec81de64_184) | | |

| OR | | | | | | | | |

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

| | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| [PART I](#i522fc58b4b794171b49b2aac24c9e306_13) | | | | | | | | | | | | | | |

| [PART II](#i522fc58b4b794171b49b2aac24c9e306_34) | | | | | | | | | | | | | | |

| [PART IV](#i522fc58b4b794171b49b2aac24c9e306_79) | | | | | | | | | | | | | | |

| | | | [Signatures](#i522fc58b4b794171b49b2aac24c9e306_196) | | | [87](#i522fc58b4b794171b49b2aac24c9e306_196) | | | | | | | | |

In addition, our other subsidiaries lease office space in [removed: Sydney,] [added: Sydney and Pyrmont,] Australia; [added: Halifax, Lunenburg,] Oakville, [removed: Montreal,] [added: Montreal] and [removed: Parksville] [added: Parksville,] Canada; Chengdu and Shanghai, China; [removed: Brno,] [added: Brno and Prague,] Czech Republic; Paris, France; Munich, Germany; Budapest, Hungary; Bangalore, India; Dublin, Ireland; Tokyo, Japan; Mexico City, Mexico, Breda, Netherlands; Auckland, New Zealand; Singapore; Seoul, South Korea; Madrid and Barcelona, Spain; Luzerne, Switzerland; Taipei, Taiwan; Brighton, [added: Dundee,] London, Lincoln, Leeds, and Oxford, [added: United Kingdom; and, in the United States: Agoura Hills, Carlsbad, Foothill Ranch, Petaluma, Moorpark, San Jose, and San Mateo California; Sparks, Maryland; Andover and Westwood, Massachusetts; Las Vegas, Nevada; Bethpage and New York, New York; Austin, Texas; and Kirkland and Seattle, Washington.]

For information regarding our lease commitments, see [removed: Note 14] [added: [Note 14](#id55210c8f40244b886767e1bec81de64_154) [](#id55210c8f40244b886767e1bec81de64_154)[\- Leases](#id55210c8f40244b886767e1bec81de64_154)] to [removed: the] [added: our] Consolidated Financial Statements.

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

Our common stock trades on the NASDAQ Global Select Market under the symbol "TTWO." The number of record holders of our common stock was 61 as of May [removed: 7, 2020.][added: 6, 2021.]

The following line graph compares, from March 31, [removed: 2015] [added: 2016] through March 31, [removed: 2020,] [added: 2021,] the cumulative total stockholder return on our common stock with the cumulative total return on the stocks comprising the NASDAQ Composite Index and the stocks comprising a peer group index consisting of Activision Blizzard, Inc. and Electronic Arts Inc. The comparison assumes $100 was invested on March 31, [removed: 2015] [added: 2016] in our common stock and in each of the following indices and assumes reinvestment of all cash dividends, if any, paid on such securities.

[added: | | | |] March [removed: 2020][added: 31, | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

[removed: ][added: ]

[removed: | | | |] March [removed: 31, | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |][added: 2021]

| | | | [removed: 2015 | | | | | |] 2016 | | | | | | 2017 | | | | | | 2018 | | | | | | 2019 | | | | | | 2020 | | | | | | [removed: | | | | | | | | | | | | | | | | | | | | | | | |] [added: 2021] | | |

During the fiscal years ended March 31, [added: 2021,] 2020, [removed: 2019,] and [removed: 2018] [added: 2019,] we repurchased 0, [removed: 3,715,642,] [added: 0,] and [removed: 1,512,557] [added: 3,715,642] shares of our common stock in the open market, respectively, for $0.0 million, [removed: $362.4] [added: $0.0] million, and [removed: $154.8] [added: $362.4] million, respectively, including commissions, as part of the program.

As of March 31, [removed: 2020,] [added: 2021,] we had repurchased a total of 10,399,529 shares of our common stock under the program, and 3,818,154 shares of our common stock remained available for repurchase under the share repurchase program.

*Summary Table*—The table below details the share repurchases that were made by us during the three months ended March 31, [removed: 2020:][added: 2021:]

| January 1 - 31, [removed: 2020] [added: 2021] | | | | | | — | | | | | | — | | | | | | — | | | | | | 3,818 | | |

| February 1 - 28, [removed: 2020] [added: 2021] | | | | | | — | | | | | | $ | — | | | | | — | | | | | | 3,818 | | |

| March 1 - 31, [removed: 2020] [added: 2021] | | | | | | — | | | | | | $ | — | | | | | — | | | | | | 3,818 | | |

* The graph and chart assume that $100 was invested on March 31, 2016 in the applicable stock or index and that all dividends were reinvested.

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Take-Two Interactive Software, Inc. | | | $ | 100.00 | | | | | $ | 157.34 | | | | | $ | 259.57 | | | | | $ | 250.52 | | | | | $ | 314.87 | | | | | $ | 469.07 | |

| NASDAQ Composite Index | | | 100.00 | | | | | | 122.88 | | | | | | 148.39 | | | | | | 164.16 | | | | | | 165.30 | | | | | | 286.62 | | |

| Peer Group | | | 100.00 | | | | | | 142.46 | | | | | | 193.38 | | | | | | 144.40 | | | | | | 167.11 | | | | | | 248.86 | | |

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

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Take-Two Interactive Software, Inc. | | | $ | 100.00 | | | | | $ | 147.96 | | | | | $ | 232.80 | | | | | $ | 384.05 | | | | | $ | 370.66 | | | | | $ | 465.87 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| NASDAQ Composite Index | | | 100.00 | | | | | | 100.55 | | | | | | 123.56 | | | | | | 149.21 | | | | | | 165.07 | | | | | | 166.22 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Peer Group | | | 100.00 | | | | | | 130.29 | | | | | | 185.60 | | | | | | 251.95 | | | | | | 188.13 | | | | | | 217.73 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

Not applicable

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

(in thousands, except per share data)

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | Fiscal Year Ended March 31, | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| STATEMENT OF OPERATIONS DATA: | | | 2020 | | | | | | 2019 (1) | | | | | | 2018 | | | | | | 2017 | | | | | | 2016 | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Net revenue | | | $ | 3,088,970 | | | | | $ | 2,668,394 | | | | | $ | 1,792,892 | | | | | $ | 1,779,748 | | | | | $ | 1,413,698 | | | | | | | | | | | | | | | | | | | | | | | | | |

| Gross profit | | | 1,546,520 | | | | | | 1,144,750 | | | | | | 894,581 | | | | | | 756,789 | | | | | | 599,825 | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Net income (loss) | | | $ | 404,459 | | | | | $ | 333,837 | | | | | $ | 173,533 | | | | | $ | 67,303 | | | | | $ | (8,302) | | | | | | | | | | | | | | | | | | | | | | | | | |

| Earnings per share: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Basic: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Earnings (loss) per share: | | | $ | 3.58 | | | | | $ | 2.95 | | | | | $ | 1.57 | | | | | $ | 0.73 | | | | | $ | (0.10) | | | | | | | | | | | | | | | | | | | | | | | | | |

| Diluted: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Earnings (loss) per share: | | | $ | 3.54 | | | | | $ | 2.90 | | | | | $ | 1.54 | | | | | $ | 0.72 | | | | | $ | (0.10) | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | As of March 31, | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| BALANCE SHEET DATA: | | | 2020 | | | | | | 2019 | | | | | | 2018 | | | | | | 2017 | | | | | | 2016 | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Total assets | | | $ | 4,948,832 | | | | | $ | 4,243,065 | | | | | $ | 3,737,841 | | | | | $ | 3,149,154 | | | | | $ | 2,590,277 | | | | | | | | | | | | | | | | | | | | | | | | | |

| Long-term debt | | | — | | | | | | — | | | | | | 8,068 | | | | | | 251,929 | | | | | | 497,935 | | | | | | | | | | | | | | | | | | | | | | | | | | |

(1) During fiscal 2019, we adopted Accounting Standards Update 2014-09, "Revenue from Contracts with Customers (Topic 606)," using a modified retrospective method.

Therefore, prior periods were not restated.

The financial statements and supplementary data appear in a separate section of this [removed: report] [added: Form 10-K] following Part IV.

We provide details of our valuation and qualifying accounts in [removed: Note 22 -] [added: [Note](#id55210c8f40244b886767e1bec81de64_178) [2](#id55210c8f40244b886767e1bec81de64_178)[1](#id55210c8f40244b886767e1bec81de64_178) [-] Supplementary Financial [removed: Information] [added: Information](#id55210c8f40244b886767e1bec81de64_178)] to [removed: the] [added: our] Consolidated Financial Statements.

All schedules have been omitted since the information required to be submitted has been included on [removed: the] [added: our] Consolidated Financial Statements or notes thereto or has been omitted as not applicable or not required.

Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures at March 31, [removed: 2020,] [added: 2021,] the end of the period covered by this report.

Based on this evaluation, the principal executive officer and principal financial officer concluded that, at March 31, [removed: 2020,] [added: 2021,] our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized, and reported on a timely basis, and (ii) accumulated and communicated to management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosures.

Based on this evaluation, management has concluded that our internal control over financial reporting was effective as of March 31, [removed: 2020.][added: 2021.]

Our independent registered public accounting firm, Ernst & Young LLP, has issued an audit report on our internal control over financial [removed: reporting.][added: reporting, which is included in this Form 10-K.]

There were no changes in our internal control over financial reporting during the fiscal quarter ended March 31, [removed: 2020,] [added: 2021,] which were identified in connection with management's evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

In accordance with SEC guidance, our management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of Playdots, which we acquired in September 2020 and is included in the March 31, 2021 Consolidated Financial Statements and constituted 3.2% of consolidated total assets as of March 31, 2021.

On September 4, 2020, we acquired Playdots.

We are currently in the process of incorporating the internal controls and procedures of Playdots into our internal control over financial reporting for purposes of our assessment of and report on internal control over financial reporting for the fiscal year ending March 31, 2022.

The report on the audit of internal control over financial reporting is included in this Form 10-K.

The information required by this Item is incorporated herein by reference to the sections entitled "Proposal 1—Election of Directors" and "Executive Compensation—Section 16(a) Beneficial Ownership Reporting Compliance" in our definitive Proxy Statement (the "Proxy Statement") for the Annual Meeting of Stockholders to be held in [removed: 2020.][added: 2021.]

We intend to file the Proxy Statement within 120 days after the end of the fiscal year (i.e. on or before July 29, [removed: 2020).][added: 2021).]

See Index to Financial Statements on page [removed: 53] [added: [44](#id55210c8f40244b886767e1bec81de64_88)] of this Report.

| | | | | | | | | | | | | Incorporated by Reference | | | | | | | | | | | | | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | |]

| Exhibit Number | | | | | | Exhibit Description | | | | | | Form | | | | | | Filing Date | | | | | | Exhibit | | | | | | Filed Herewith | | | [removed: | | | | | | | | | | | | | | | | | |]

| 3.1 | | | | | | [Restated Certificate of Incorporation](http://www.sec.gov/Archives/edgar/data/946581/000112528204000439/b330117ex3_1.txt) | | | | | | 10-K | | | | | | 2/12/2004 | | | | | | 3.1 | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | |]

| 3.1.1 | | | | | | [Certificate of Amendment of Restated Certificate of Incorporation, dated April 30, 1998](http://www.sec.gov/Archives/edgar/data/946581/000112528204000439/b330117ex3_1-1.txt) | | | | | | 10-K | | | | | | 2/12/2004 | | | | | | 3.1.2 | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | |]

| 3.1.2 | | | | | | [Certificate of Amendment of Restated Certificate of Incorporation, dated November 17, 2003](http://www.sec.gov/Archives/edgar/data/946581/000112528204000439/b330117ex3_1-2.txt) | | | | | | 10-K | | | | | | 2/12/2004 | | | | | | 3.1.3 | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | |]

| 3.1.3 | | | | | | [Certificate of Amendment of Restated Certificate of Incorporation, dated April 23, 2009](http://www.sec.gov/Archives/edgar/data/946581/000110465909025827/a09-10859_1ex3d1.htm) | | | | | | 8-K | | | | | | 4/23/2009 | | | | | | 3.1 | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | |]

| 3.1.4 | | | | | | [Certificate of Amendment of Restated Certificate of Incorporation, dated September 21, 2012](http://www.sec.gov/Archives/edgar/data/946581/000110465912065069/a12-21962_1ex3d1.htm) | | | | | | 8-K | | | | | | 9/24/2012 | | | | | | 3.1 | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | |]

| 3.2 | | | | | | [Certificate of Designation of Series A Preferred Stock, dated March 11, 1998](http://www.sec.gov/Archives/edgar/data/946581/000112528204000439/b330117ex3_1-1.txt) | | | | | | 10-K | | | | | | 2/12/2004 | | | | | | 3.1.1 | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | |]

| 3.3 | | | | | | [Certificate of Designation of Series B Preferred Stock, dated March 26, 2008](http://www.sec.gov/Archives/edgar/data/946581/000110465908019702/a08-9031_2ex4d2.htm) | | | | | | 8-A12B | | | | | | 3/26/2008 | | | | | | 4.2 | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | |]

| 3.4 | | | | | | [Second Amended and Restated Bylaws of Take-Two Interactive Software, Inc., effective as of June 20, 2019](http://www.sec.gov/Archives/edgar/data/946581/000110465919037421/a19-11896_18k.htm) | | | | | | 8-K | | | | | | 6/25/2019 | | | | | | 3.1 | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | |]

| 4.1 | | | | | | [Description of Registrant's Securities Registered Pursuant to Section 12 of the Securities Exchange Act of [removed: 1934](https://www.sec.gov/Archives/edgar/data/946581/000162828020008291/ex-4103312020.htm) | | | | | | | | | | | | | | | | | |] [added: 1934](http://www.sec.gov/Archives/edgar/data/946581/000162828020008291/ex-4103312020.htm)] | | | | | | [removed: X] [added: 10-K] | | | | | | [added: 5/22/2020] | | | | | | [added: 4.1] | | | | | | | | |

| 10.1 | | | | | | [Take-Two Interactive Software, Inc. Change in Control Employee Severance Plan](http://www.sec.gov/Archives/edgar/data/946581/000114420408014086/v105825_ex10-1.htm)+ | | | | | | 8-K | | | | | | 3/7/2008 | | | | | | 10.1 | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | |]

| 10.2 | | | | | | [Amended and Restated Take-Two Interactive Software, Inc. 2009 Stock Incentive Plan, effective as of July 21, 2016](http://www.sec.gov/Archives/edgar/data/946581/000119312516662296/d146119ddef14a.htm#tx146119_32)+ | | | | | | 14A | | | | | | 7/28/2016 | | | | | | Annex A | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | |]

| 10.3 | | | | | | [Form of Employee Restricted Stock Agreement](http://www.sec.gov/Archives/edgar/data/946581/000104746909006187/a2193344zex-10_2.htm)+ | | | | | | 10-Q | | | | | | 6/5/2009 | | | | | | 10.2 | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | |]

| 10.4 | | | | | | [Form of Non-Employee Director Restricted Stock Agreement](http://www.sec.gov/Archives/edgar/data/946581/000104746909006187/a2193344zex-10_3.htm)+ | | | | | | 10-Q | | | | | | 6/5/2009 | | | | | | 10.3 | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | |]

| 10.5 | | | | | | [Form of Employee Restricted Unit Agreement](http://www.sec.gov/Archives/edgar/data/946581/000104746912007602/a2210397zex-10_1.htm)+ | | | | | | 10-Q | | | | | | 8/1/2012 | | | | | | 10.1 | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | |]

| 10.6 | | | | | | [Form of Employee Restricted Unit Agreement](http://www.sec.gov/Archives/edgar/data/946581/000104746913010066/a2217131zex-10_1.htm)+ | | | | | | 10-Q | | | | | | 10/30/2013 | | | | | | 10.1 | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | |]

| 10.7 | | | | | | [Form of Employee Global Restricted Unit Agreement](http://www.sec.gov/Archives/edgar/data/946581/000104746913010066/a2217131zex-10_2.htm)+ | | | | | | 10-Q | | | | | | 10/30/2013 | | | | | | 10.2 | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | |]

| 10.8 | | | | | | [Form of Employee Restricted Unit Agreement](http://www.sec.gov/Archives/edgar/data/946581/000104746913010066/a2217131zex-10_3.htm) + | | | | | | 10-Q | | | | | | 10/30/2013 | | | | | | 10.3 | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | |]

| 10.9 | | | | | | [Form of Employee Global Restricted Unit Agreement](http://www.sec.gov/Archives/edgar/data/946581/000104746913010066/a2217131zex-10_4.htm)+ | | | | | | 10-Q | | | | | | 10/30/2013 | | | | | | 10.4 | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | |]

| 10.10 | | | | | | [Form of Employee Global Restricted Unit Agreement Pursuant to the Take-Two Interactive Software, Inc. 2009 Stock Incentive Plan](http://www.sec.gov/Archives/edgar/data/946581/000104746913010066/a2217131zex-10_5.htm)+ | | | | | | 10-Q | | | | | | 10/30/2013 | | | | | | 10.5 | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | |]

| [removed: 10.11] [added: 10.13] | | | | | | [Take-Two Interactive Software, Inc. 2017 Stock Incentive [removed: Plan,] [added: Plan Qualified RSU Sub-Plan for France,] effective as of September 15, [removed: 2017](http://www.sec.gov/Archives/edgar/data/946581/000119312517238644/d330685ddef14a.htm#tx330685_36)+] [added: 2017](http://www.sec.gov/Archives/edgar/data/946581/000119312517238644/d330685ddef14a.htm#tx330685_37)+] | | | | | | 14A | | | | | | 7/27/2017 | | | | | | Annex [removed: B | | | | | | | | | | | | | | | | | |] [added: C] | | | | | | | | |

| [removed: 10.12] [added: 10.11] | | | | | | [removed: [Take-Two] [added: [Amended and Restated Take-Two] Interactive Software, Inc. 2017 Stock Incentive [removed: Plan Qualified RSU Sub-Plan for France, effective as of September 15, 2017](http://www.sec.gov/Archives/edgar/data/946581/000119312517238644/d330685ddef14a.htm#tx330685_37)+] [added: Plan](http://www.sec.gov/Archives/edgar/data/0000946581/000119312520198591/d940734ddef14a.htm#tx940734_33)] | | | | | | 14A | | | | | | [removed: 7/27/2017] [added: 7/24/2020] | | | | | | Annex [removed: C | | | | | | | | | | | | | | | | | |] [added: B] | | | | | | | | |

| [removed: 10.13] [added: 10.14] | | | | | | [Take-Two Interactive Software, Inc. 2017 Second Amended and Restated Global Employee Stock Purchase Plan, effective as of March 28, 2019](http://www.sec.gov/Archives/edgar/data/946581/000162828019006691/ex-10132ndamendedandrestat.htm)+ | | | | | | 10-K | | | | | | 5/14/2019 | | | | | | 10.13 | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | |]

| [removed: 10.14] [added: 10.15] | | | | | | [Form of Global Restricted Stock Unit Agreement Pursuant to the Take-Two Interactive Software, Inc. 2017 Stock Incentive Plan](http://www.sec.gov/Archives/edgar/data/946581/000162828017011117/ttwoex-10x4.htm)+ | | | | | | 10-Q | | | | | | 11/8/2017 | | | | | | 10.4 | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | |]

| [removed: 10.15] [added: 10.16] | | | | | | [Form of Global Restricted Stock Performance Unit Agreement Pursuant to the Take-Two Interactive Software, Inc. 2017 Stock Incentive Plan](http://www.sec.gov/Archives/edgar/data/946581/000162828017011117/ttwoex-10x5.htm)+ | | | | | | 10-Q | | | | | | 11/8/2017 | | | | | | 10.5 | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | |]

| [removed: 10.16] [added: 10.17] | | | | | | [Form of Non-Employee Director Restricted Stock Agreement Pursuant to the Take-Two Interactive Software Inc. 2017 Stock Incentive Plan](http://www.sec.gov/Archives/edgar/data/946581/000162828017011117/ttwoex-10x6.htm)+ | | | | | | 10-Q | | | | | | 11/8/2017 | | | | | | 10.6 | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | |]

| [removed: 10.17] [added: 10.18] | | | | | | [Form of Non-Employee Director Stock Grant Agreement Pursuant to the Take-Two Interactive Software Inc. 2017 Stock Incentive Plan](http://www.sec.gov/Archives/edgar/data/946581/000162828017011117/ttwoex-10x7.htm)+ | | | | | | 10-Q | | | | | | 11/8/2017 | | | | | | 10.7 | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | |]

| [removed: 10.18] [added: 10.19] | | | | | | [Employment Agreement, dated May 12, 2010, between the Company and Lainie Goldstein](http://www.sec.gov/Archives/edgar/data/946581/000110465910028475/a10-10145_1ex10d1.htm)+ | | | | | | 8-K | | | | | | 5/14/2010 | | | | | | 10.1 | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | |]

| [removed: 10.19] [added: 10.20] | | | | | | [First Amendment to Employment Agreement, dated October 25, 2010, between the Company and Lainie Goldstein](http://www.sec.gov/Archives/edgar/data/946581/000110465910053523/a10-19838_1ex10d1.htm)+ | | | | | | 8-K | | | | | | 10/25/2010 | | | | | | 10.1 | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | |]

| [removed: 10.20] [added: 10.21] | | | | | | [Second Amendment to Employment Agreement, dated August 27, 2012, between the Company and Lainie Goldstein](http://www.sec.gov/Archives/edgar/data/946581/000104746912009896/a2211465zex-10_6.htm)+ | | | | | | 10-Q | | | | | | 10/31/2012 | | | | | | 10.6 | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | |]

| [removed: 10.21] [added: 10.22] | | | | | | [Third Amendment to Employment Agreement dated May 7, 2018, between the Company and Lainie Goldstein](http://www.sec.gov/Archives/edgar/data/946581/000162828018010376/a063018ttwoex-10x2.htm)+ | | | | | | 10-Q | | | | | | 8/3/2018 | | | | | | 10.2 | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | |]

| [removed: 10.22] [added: 10.23] | | | | | | [Employment Agreement, dated February 14, 2008, by and between the Company and Karl Slatoff](http://www.sec.gov/Archives/edgar/data/946581/000114420408009931/v103944_ex10-3.htm)+ | | | | | | 8-K | | | | | | 2/15/2008 | | | | | | 10.3 | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | |]

| [removed: 10.23] [added: 10.24] | | | | | | [Employment Agreement dated January 28, 2015 between the Company and Daniel Emerson](http://www.sec.gov/Archives/edgar/data/946581/000104746915000639/a2222916zex-10_1.htm)+ | | | | | | 10-Q | | | | | | 2/6/2015 | | | | | | 10.1 | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | |]

| [removed: 10.24] [added: 10.25] | | | | | | [Management Agreement, dated as of March 10, 2014, by and between the Company and ZelnickMedia Corporation](http://www.sec.gov/Archives/edgar/data/946581/000110465914018060/a14-7799_1ex10d1.htm)+ | | | | | | 8-K | | | | | | 3/10/2014 | | | | | | 10.1 | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | |]

| [removed: 10.25] [added: 10.26] | | | | | | [Restricted Unit Agreement, dated as of May 20, 2015, by and between the Company and ZelnickMedia Corporation](http://www.sec.gov/Archives/edgar/data/946581/000110465915039690/a15-12266_2ex10d2.htm)+ | | | | | | S-3 ASR | | | | | | 5/20/2015 | | | | | | 10.2 | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | |]

| [removed: 10.26] [added: 10.27] | | | | | | [Amended and Restated Restricted Unit Agreement Pursuant to the Take-Two Interactive Software, Inc. 2009 Incentive Stock Plan, dated as of June 30, 2015](http://www.sec.gov/Archives/edgar/data/946581/000104746915006749/a2225573zex-10_1.htm)+ | | | | | | 10-Q | | | | | | 8/10/2015 | | | | | | 10.1 | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | |]

| [removed: 10.27] [added: 10.28] | | | | | | [Amendment to the Restricted Stock Unit Agreement, dated as of March 31, 2016, by and between Take-Two Interactive Software, Inc. and ZelnickMedia Corporation](http://www.sec.gov/Archives/edgar/data/946581/000104746916013278/a2228643zex-10_50.htm)+ | | | | | | 10-K | | | | | | 5/19/2016 | | | | | | 10.50 | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | |]

| [removed: 10.28] [added: 10.29] | | | | | | [Restricted Unit Agreement, dated as of May 20, 2016, by and between Take-Two Interactive Software, Inc. and ZelnickMedia Corporation](http://www.sec.gov/Archives/edgar/data/946581/000110465916122193/a16-11783_2ex10d2.htm)+ | | | | | | S-3 ASR | | | | | | 5/20/2016 | | | | | | 10.2 | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | |]

See [Note 2](#id55210c8f40244b886767e1bec81de64_178)[1](#id55210c8f40244b886767e1bec81de64_178) [](#id55210c8f40244b886767e1bec81de64_178)[\- Supplement](#id55210c8f40244b886767e1bec81de64_178)[ary F](#id55210c8f40244b886767e1bec81de64_178)[inancial Information](#id55210c8f40244b886767e1bec81de64_178) to our Consolidated Financial Statements.

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| 2.1 | | | | | | [Agreement and Plan of Merger, dated as of August 17, 2020, by and among Take-Two Interactive Software, Inc., Dash MS, LLC, Dash MS II, LLC, Playdots, Inc. and Shareholder Representative Services LLC, as Stockholder Representative](http://www.sec.gov/Archives/edgar/data/0000946581/000119312520223616/d82273dex21.htm) | | | | | | 8-K | | | | | | 8/18/2020 | | | | | | 2.1 | | | | | | | | |

| 10.12 | | | | | | [Amendment No. 1 to the Amended and Restated Take-Two Interactive Software, Inc. 2017 Stock Incentive Plan](http://www.sec.gov/Archives/edgar/data/0000946581/000119312520240149/d90600ds8.htm)+ | | | | | | S-8 | | | | | | 9/4/2020 | | | | | | 99.2 | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | Incorporated by Reference | | | | | | | | | | | | | | | | | | | | |

| Exhibit Number | | | | | | Exhibit Description | | | | | | Form | | | | | | Filing Date | | | | | | Exhibit | | | | | | Filed Herewith | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | Incorporated by Reference | | | | | | | | | | | | | | | | | | | | |

| Exhibit Number | | | | | | Exhibit Description | | | | | | Form | | | | | | Filing Date | | | | | | Exhibit | | | | | | Filed Herewith | | |

| 10.37 | | | | | | [Restricted Unit Agreement dated as of April 13, 2021, by and between Take-Two Interactive Software, Inc. and ZelnickMedia Corporation](http://www.sec.gov/Archives/edgar/data/0000946581/000110465921049797/tm2112666d1_s3asr.htm) + | | | | | | S-3 ASR | | | | | | 4/13/2021 | | | | | | 10.2 | | | | | | | | |

| 10.46 | | | | | | [Xbox Console Publisher License Agreement, dated as of July 1, 2020, by and between Take-Two Interactive Software, Inc. and Microsoft Corporation](http://www.sec.gov/Archives/edgar/data/0000946581/000162828020015824/xboxagreement.htm) | | | | | | 10-Q | | | | | | 11/6/2020 | | | | | | 10.1 | | | | | | | | |

| 10.48 | | | | | | [PlayStation 5 Amendment to PlayStation Global Developer and Publisher Agreement, effective as of May 1, 2020 and signed on September 30, 2020, between Take-Two Interactive Software, Inc. and certain of its affiliates and Sony Interactive Entertainment, Inc., Sony Interactive Entertainment America LLC, and Sony Interactive Entertainment Europe Ltd.](http://www.sec.gov/Archives/edgar/data/0000946581/000162828020015824/playstationagreement.htm) | | | | | | 10-Q | | | | | | 11/6/2020 | | | | | | 10.4 | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | Incorporated by Reference | | | | | | | | | | | | | | | | | | | | |

| Exhibit Number | | | | | | Exhibit Description | | | | | | Form | | | | | | Filing Date | | | | | | Exhibit | | | | | | Filed Herewith | | |

See Note 22 to the Consolidated Financial Statements.

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| 10.44 | | | | | | [Xbox One Publisher License Agreement dated October 31, 2013, between Microsoft Licensing, GP and the Company](http://www.sec.gov/Archives/edgar/data/946581/000104746914000555/a2218068zex-10_1.htm)* | | | | | | 10-Q | | | | | | 2/4/2014 | | | | | | 10.1 | | | | | | | | | | | | | | | | | | | | | | | | | | |

| 10.45 | | | | | | [Amendment to the Xbox One Publisher License Agreement, dated May 7, 2014, between Microsoft Licensing, GP and the Company](http://www.sec.gov/Archives/edgar/data/946581/000104746914006667/a2220828zex-10_1.htm)* | | | | | | 10-Q | | | | | | 8/6/2014 | | | | | | 10.1 | | | | | | | | | | | | | | | | | | | | | | | | | | |

| 10.46 | | | | | | [Amendment to the Xbox One Publisher License Agreement, dated January 30, 2015, between Microsoft Corporation and the Company](http://www.sec.gov/Archives/edgar/data/946581/000104746916013278/a2228643zex-10_48.htm)* | | | | | | 10-K | | | | | | 5/19/2016 | | | | | | 10.48 | | | | | | | | | | | | | | | | | | | | | | | | | | |

| 10.47 | | | | | | [Amendment No. 3 to the Xbox One Publisher License Agreement, dated August 13, 2015, between Microsoft Corporation and the Company](http://www.sec.gov/Archives/edgar/data/946581/000104746916013278/a2228643zex-10_49.htm)* | | | | | | 10-K | | | | | | 5/19/2016 | | | | | | 10.49 | | | | | | | | | | | | | | | | | | | | | | | | | | |

| 10.48 | | | | | | [Amendment No. 4 to the Xbox One Publisher License Agreement, dated December 15, 2016, between Microsoft Corporation and the Company](http://www.sec.gov/Archives/edgar/data/946581/000110465917034645/a17-14046_1ex10d2.htm)* | | | | | | 10-Q/A | | | | | | 5/23/2017 | | | | | | 10.2 | | | | | | | | | | | | | | | | | | | | | | | | | | |

| 10.49 | | | | | | [Amendment No. 5 to the Xbox One Publisher License Agreement, signed on January 10, 2018, between Microsoft Corporation and the Company](http://www.sec.gov/Archives/edgar/data/946581/000162828018006877/ex-1055033118.htm)* | | | | | | 10-K | | | | | | 5/17/2018 | | | | | | 10.55 | | | | | | | | | | | | | | | | | | | | | | | | | | |

| 10.50 | | | | | | [Amendment No. 6 to the Xbox One Publisher License Agreement, dated as of April 9, 2019, between Microsoft Corporation and the Company](http://www.sec.gov/Archives/edgar/data/946581/000162828019010011/a101ttwoxboxoneplaamen.htm) | | | | | | 10-Q | | | | | | 8/6/2019 | | | | | | 10.1 | | | | | | | | | | | | | | | | | | | | | | | | | | |

[removed: FISCAL YEAR ENDED MARCH 31, 2020][added: | | | | | | | Fiscal Year Ended March 31, | | | | | | | | | | | | | | |]

| [Reports of Independent Registered Public Accounting [removed: Firm](#i522fc58b4b794171b49b2aac24c9e306_91)] [added: Firm](#id55210c8f40244b886767e1bec81de64_91)] | | | [removed: [47](#i522fc58b4b794171b49b2aac24c9e306_91)] [added: [44](#id55210c8f40244b886767e1bec81de64_91)] | | |

| [Consolidated Balance [removed: Sheets](#i522fc58b4b794171b49b2aac24c9e306_94)—At] [added: Sheets](#id55210c8f40244b886767e1bec81de64_94)—At] March 31, [removed: 2020] [added: 2021] and [removed: 2019] [added: 2020] | | | [removed: [51](#i522fc58b4b794171b49b2aac24c9e306_94)] [added: [48](#id55210c8f40244b886767e1bec81de64_94)] | | |

| [Consolidated Statements of [removed: Operations](#i522fc58b4b794171b49b2aac24c9e306_100)—For] [added: Operations](#id55210c8f40244b886767e1bec81de64_97)—For] the fiscal years ended March 31, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018] [added: 2019] | | | [removed: [52](#i522fc58b4b794171b49b2aac24c9e306_100)] [added: [49](#id55210c8f40244b886767e1bec81de64_97)] | | |

| [Consolidated Statements of Comprehensive [removed: Income](#i522fc58b4b794171b49b2aac24c9e306_103)—For] [added: Income](#id55210c8f40244b886767e1bec81de64_100)—For] the fiscal years ended March 31, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018] [added: 2019] | | | [removed: [53](#i522fc58b4b794171b49b2aac24c9e306_103)] [added: [50](#id55210c8f40244b886767e1bec81de64_100)] | | |

| [Consolidated Statements of Cash [removed: Flows](#i522fc58b4b794171b49b2aac24c9e306_106)—For] [added: Flows](#id55210c8f40244b886767e1bec81de64_103)—For] the fiscal years ended March 31, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018] [added: 2019] | | | [removed: [54](#i522fc58b4b794171b49b2aac24c9e306_106)] [added: [51](#id55210c8f40244b886767e1bec81de64_103)] | | |

| [Consolidated Statements of Stockholders' [removed: Equity](#i522fc58b4b794171b49b2aac24c9e306_109)—For] [added: Equity](#id55210c8f40244b886767e1bec81de64_106)—For] the fiscal years ended March 31, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018] [added: 2019] | | | [removed: [55](#i522fc58b4b794171b49b2aac24c9e306_109)] [added: [52](#id55210c8f40244b886767e1bec81de64_106)] | | |

| [Notes to the Consolidated Financial [removed: Statements](#i522fc58b4b794171b49b2aac24c9e306_115)] [added: Statements](#id55210c8f40244b886767e1bec81de64_109)] | | | [removed: [56](#i522fc58b4b794171b49b2aac24c9e306_115)] [added: [53](#id55210c8f40244b886767e1bec81de64_109)] | | |

We have audited the accompanying consolidated balance sheets of Take-Two Interactive Software, Inc. (the Company) as of March 31, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] 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, [removed: 2020,] [added: 2021,] 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, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] and the results of its operations and its cash flows for each of the three years in the period ended March 31, [removed: 2020,] [added: 2021,] 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, [removed: 2020,] [added: 2021,] 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 [removed: 22, 2020] [added: 18, 2021] expressed an unqualified opinion thereon.

| *Description of the Matter* | | | As described in Note 1 to the consolidated financial statements, a significant portion of the Company’s revenue recognized is for full game software products that management [removed: evaluates] [added: must evaluate to determine] whether such products sold have distinct and separable performance obligations. Such performance obligations can be licenses for intellectual property that [removed: provides] [added: provide] a functional offline gaming experience or game related services. If multiple performance obligations are identified, management must estimate a standalone selling price for each identified performance obligation which is used to allocate the full game software product transaction price. Revenue for amounts allocated to offline functionality is recognized upon delivery of the product. Separately, revenue for amounts allocated to the game related services is recognized ratably over an estimated service period. Significant judgment is exercised by the Company in identifying performance obligations within its full game software products that should be accounted for separately in each revenue arrangement, estimating the standalone selling price for each performance obligation and determining the service period [added: that should be utilized] to recognize revenue over time. Auditing the identification of performance obligations for full game software products requires complex auditor judgment as each full game software product has unique features that management must [added: evaluate to] determine whether [removed: to] [added: each feature should] be accounted for separately. Auditing the judgments and estimates made by management in determining the standalone selling prices for [added: each] identified performance [removed: obligations] [added: obligation] is especially challenging as the Company typically does not have observable standalone selling prices for each performance obligation and must rely on an expected cost-plus margin methodology, taking into account relevant cost assumptions including estimates of post-release support. Similarly, auditing the estimated service period for the game related services is especially challenging as the Company must consider a variety of data points. Such data points include the weighted average number of days between players’ first and last days played online, known online trends, the service periods of the Company’s previously released products, and, to the extent publicly available, the service periods of the Company’s competitors’ products that are similar in nature. | | |

| *How We Addressed the Matter in Our Audit* | | | We obtained an understanding, evaluated the design and tested the operating effectiveness of [removed: the Company's] [added: Company’s] controls over the revenue recognition process. We selected a sample of transactions and tested the Company’s controls over evaluating and identifying performance obligations, determining the estimated [added: standalone] selling price and estimating the service period [removed: for revenue recognized] over [removed: time.] [added: which game related services revenue is recognized.] Our audit procedures to test the Company’s identification of performance obligations included, among others, inspecting product-specific marketing materials for promised full game software product features, inspecting summaries of product features from Company personnel in product development roles, and independently evaluating the full game software product to corroborate identified product features on a sample basis. Our audit procedures to test the Company’s estimates of standalone selling price for performance obligations included, among others, testing the underlying data used in management’s calculations for completeness and accuracy as well as evaluating the reasonableness of significant assumptions [removed: used] and other factors utilized in making estimates of standalone selling price. For example, for a selection of full game software products which included multiple performance obligations, we tested the Company’s expected cost-plus margin analysis by testing the appropriateness of the assumptions used in the analysis, including product development costs and forecasted post-release support costs, marketing costs and licensing costs. Our audit procedures to test and evaluate the reasonableness of the Company’s estimated service period included, among others, testing the completeness and accuracy of management’s player data analysis, testing qualitative factors utilized such as reviewing online trends, comparing to similar or historical products and analyzing competitor information. | | |

| *Description of the Matter* | | | As described in Note 1 to the consolidated financial statements, the Company capitalizes internally developed software [removed: development] costs, subsequent to establishing technological feasibility of a product. [removed: Amortization of internally developed software costs commences when a product is available for general release and is recorded on a product-by-product basis in cost of goods sold.] As noted in Note 8, the Company had approximately [removed: $323.3] [added: $435.1] million of capitalized internally developed software as of March 31, [removed: 2020.] [added: 2021.] Auditing the Company’s [removed: capitalization] [added: determination] of [removed: internally developed software costs] [added: the establishment of technological feasibility] was especially challenging because management’s determination of which products qualify [removed: for capitalization] and the [added: related] timing of [removed: establishing technological feasibility] [added: capitalization] requires significant judgment. [removed: The auditing of amortization of capitalized internally developed software costs is especially challenging as the calculation is dependent on judgments around the estimated economic life and estimates of total revenue of the product. Changes in management’s assumptions of product revenue can have a material effect on amortization.] | | |

| *How We Addressed the Matter in Our Audit* | | | We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the internally developed software costs process. For example, we tested controls over management’s [removed: determination] [added: evaluation] of products that [removed: qualify for capitalization. We also tested management's review controls related to the estimation of product revenue forecasts used in the calculation of amortization.] [added: established technological feasibility.] To test the Company’s capitalization of internally developed software costs, we performed audit procedures that included, among others, inspecting underlying documentation to [removed: evaluate whether] [added: support management’s conclusion on] the [removed: costs to develop products were capitalizable] [added: establishment of technological feasibility] in accordance with the applicable accounting standards. This included inspecting the product’s technical and game design documentation. We also held corroborative inquiries of Company personnel in product development roles to assess the Company’s conclusions as to the technological feasibility of its products. [removed: For a sample of transactions our audit procedures included, among others, testing amortization source data by product, including current period and forecasted revenue by product. Our audit procedures included assessing the reasonableness of the Company’s product specific revenue forecasts and performing sensitivity analyses to evaluate the changes in amortization that would result from changes in the Company's significant assumptions. We also tested the mathematical accuracy of management’s calculations of amortization expense recognized in the consolidated financial statements.] | | |

We have audited Take-Two Interactive Software, Inc.'s (the Company) internal control over financial reporting as of March 31, [removed: 2020,] [added: 2021,] 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, [removed: 2020,] [added: 2021,] 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, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] 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, [removed: 2020,] [added: 2021,] and the related notes and our report dated May [removed: 22, 2020] [added: 18, 2021] expressed an unqualified opinion thereon.

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 [removed: risk,] [added: risk] and performing such other procedures as we considered necessary in the circumstances.

| | | | | | | March 31, | | | | | | | | | [removed: | | | | | |]

| | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | | | | | [added: 2019] | | |

| ASSETS | | | | | | | | | | | | | | | [removed: | | | | | |]

| Current assets: | | | | | | | | | | | | | | | [removed: | | | | | |]

| Cash and cash equivalents | | | | | | $ | [removed: 1,357,664] [added: 1,422,884] | | | | | $ | [removed: 826,525 | | | | | |] [added: 1,357,664] | |

| Short-term investments | | | | | | [removed: 644,003 | | | | | | 744,485] [added: 1,308,692] | | | | | | [added: 644,003] | | |

| Restricted cash and cash equivalents | | | | | | [removed: 546,604 | | | | | | 565,461] [added: 538,822] | | | | | | [added: 546,604] | | |

| Accounts receivable, net of allowances of [removed: $443] [added: $350] and [removed: $995] [added: $443] at March 31, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] respectively | | | | | | [removed: 592,555 | | | | | | 395,729] [added: 552,762] | | | | | | [added: 592,555] | | |

| Inventory | | | | | | [removed: 19,108 | | | | | | 28,200] [added: 17,742] | | | | | | [added: 19,108] | | |

| Software development costs and licenses | | | | | | [removed: 40,316 | | | | | | 28,880] [added: 43,443] | | | | | | [added: 40,316] | | |

| Deferred cost of goods sold | | | | | | [removed: 19,598 | | | | | | 51,867] [added: 15,524] | | | | | | [added: 19,598] | | |

| Prepaid expenses and other | | | | | | [removed: 273,503 | | | | | | 186,688] [added: 320,646] | | | | | | [added: 273,503] | | |

| Total current assets | | | | | | [removed: 3,493,351 | | | | | | 2,827,835] [added: 4,220,515] | | | | | | [added: 3,493,351] | | |

| Fixed assets, net | | | | | | [removed: 131,888 | | | | | | 127,882] [added: 149,364] | | | | | | [added: 131,888] | | |

| Right-of-use assets | | | | | | [removed: 154,284 | | | | | | —] [added: 164,763] | | | | | | [added: 154,284] | | |

| Software development costs and licenses, net of current portion | | | | | | [removed: 401,778 | | | | | | 603,436] [added: 490,892] | | | | | | [added: 401,778] | | |

| Goodwill | | | | | | [removed: 386,494 | | | | | | 381,717] [added: 535,306] | | | | | | [added: 386,494] | | |

| Other intangibles, net | | | | | | [removed: 51,260 | | | | | | 73,115] [added: 121,591] | | | | | | [added: 51,260] | | |

| Deferred tax assets | | | | | | [removed: 116,676 | | | | | | 134,732] [added: 90,206] | | | | | | [added: 116,676] | | |

| Long-term restricted cash and cash equivalents | | | | | | [removed: 89,124 | | | | | | —] [added: 98,541] | | | | | | [added: 89,124] | | |

| Other assets | | | | | | [removed: 123,977 | | | | | | 94,348] [added: 157,040] | | | | | | [added: 123,977] | | |

FISCAL YEAR ENDED MARCH 31, 2021

May 18, 2021

As indicated in the accompanying Management’s Report on Internal Control Over Financial reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of Playdots, Inc., which is included in the March 31, 2021 consolidated financial statements of the Company and constituted 3% of total assets as of March 31, 2021 and 1% of revenues for the year then ended.

Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of Playdots, Inc.

May 18, 2021

| | | | | | | 2021 | | | | | | 2020 | | |

| Non-current software development royalties | | | | | | 110,127 | | | | | | 104,417 | | |

| Other long-term liabilities | | | | | | 154,511 | | | | | | 86,234 | | |

| Net income | | | | | | $ | 588,886 | | | | | $ | 404,459 | | | | | $ | 333,837 | |

| Net income | | | | | | $ | 588,886 | | | | | $ | 404,459 | | | | | $ | 333,837 | |

| Gain on long-term investments, net | | | | | | (41,588) | | | | | | — | | | | | | — | | |

| | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | |

| Other, net | | | | | | 5,515 | | | | | | 9,074 | | | | | | 675 | | |

| | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | |

| Proceeds from sale of long-term investment | | | | | | 47,472 | | | | | | — | | | | | | — | | |

| | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | |

(1) Cash, cash equivalents and restricted cash and cash equivalents shown on our Consolidated Statements of Cash Flow includes amounts in the Cash and cash equivalents, Restricted cash and cash equivalents, and Long-term restricted cash and cash equivalents on our Consolidated Balance Sheet.

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Net income | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 588,886 | | | | | | — | | | | | | 588,886 | | |

| Employee share purchase plan settlement | | | | | | 139 | | | | | | 2 | | | | | | 14,212 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 14,214 | | |

| Issuance of shares related to Playdots, Inc. acquisition | | | | | | 604 | | | | | | 6 | | | | | | 97,641 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 97,647 | | |

| Balance, March 31, 2021 | | | | | | 137,584 | | | | | | $ | 1,376 | | | | | $ | 2,288,781 | | | | | (22,421) | | | | | | $ | (820,572) | | | | | $ | 1,870,971 | | | | | $ | (8,664) | | | | | $ | 3,331,892 | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

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.

May 22, 2020

| Other long-term liabilities | | | | | | 190,651 | | | | | | 229,633 | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | March 31, | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Amortization of discount on Convertible Notes | | | | | | — | | | | | | 91 | | | | | | 15,662 | | | | | | | | | | | | | | |

| Impairment of in-process research and development | | | | | | — | | | | | | — | | | | | | 11,257 | | | | | | | | | | | | | | |

| Impairment of long-term investments | | | | | | 5,333 | | | | | | — | | | | | | — | | | | | | | | | | | | | | |

| Gain on redemption of Convertible Notes | | | | | | — | | | | | | — | | | | | | (4,900) | | | | | | | | | | | | | | |

| Other, net | | | | | | 3,741 | | | | | | 584 | | | | | | 6,953 | | | | | | | | | | | | | | |

| Asset acquisition | | | | | | — | | | | | | — | | | | | | (25,965) | | | | | | | | | | | | | | |

| Other | | | | | | — | | | | | | — | | | | | | (13,791) | | | | | | | | | | | | | | |

(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.

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| 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 | | | | | | | | | | | | | | |

| Repurchased common stock | | | | | | — | | | | | | — | | | | | | — | | | | | | (1,513) | | | | | | (154,792) | | | | | | — | | | | | | | | | | | | (154,792) | | | | | | | | | | | | | | |

| Adoption of ASU 2016-09, Stock Comp Simplification | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (323) | | | | | | — | | | | | | (323) | | | | | | | | | | | | | | |

| Conversion of 1.00% Convertible Notes Due 2018 | | | | | | 377 | | | | | | 4 | | | | | | 8,108 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 8,112 | | | | | | | | | | | | | | |

March 31, 2019.

game title as well as, in some cases, the underlying intellectual property rights.

The new lease accounting standard replaced all prior U.S. GAAP guidance on this topic as codified principally under Topic 840, Leases.

The new standard, among other things, requires a lessee to classify a lease as either an operating or financing lease and to recognize a lease liability and a right-of-use (“ROU”) asset for its leases.

On April 1, 2019, we adopted the new lease accounting standard using the alternative transition approach provided in ASU 2018-11, “Leases (Topic 842) - Targeted Improvements,” which allows initial application of the new standard using the

modified retrospective method.

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

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

This voluntary change in accounting principle,

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

As of March 31, 2020, the goodwill balance of one of our reporting units is $152,175, and the fair value of that reporting unit approximates its carrying values.

In December 2017, the U.S. enacted the Tax Cuts and Jobs Act (the "Tax Act"), which, among other provisions, subjects a U.S. shareholder to current tax on Global Intangible Low-Taxed Income ("GILTI") earned by foreign subsidiaries.

We have elected to recognize the resulting tax on GILTI as an expense in the period incurred.

In May 2014, the FASB issued ASU 2014-09, *Revenue from Contracts with Customers (Topic 606)*.

Under the new standard, revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services.

On April 1, 2018, we adopted the new accounting standard and related amendments (the “New Revenue Accounting Standard”) using the modified retrospective method.

Refer to Note 1 to our Consolidated Financial Statements in our Annual Report on Form 10-K for the