UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):    December 17, 2008

TAKE-TWO INTERACTIVE SOFTWARE, INC.

(Exact name of registrant as specified in its charter)

Registrant’s telephone number, including area code  (646) 536-2842

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

On December 17, 2008, Take-Two Interactive Software, Inc. (the “Company”) issued a press release announcing the financial results of the Company for its fourth quarter and fiscal year ended October 31, 2008.  A copy of the press release is attached to this Current Report as Exhibit 99.1 and is incorporated by reference herein.

The information included in this Current Report on Form 8-K, including Exhibit 99.1 hereto, that is furnished pursuant to this Item 2.02 shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended.  In addition, the information included in this Current Report on Form 8-K, including Exhibit 99.1 hereto, that is furnished pursuant to this Item 2.02 shall not be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference into such filing.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

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EXHIBIT INDEX

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Exhibit 99.1

FOR IMMEDIATE RELEASE

CONTACT:

Meg Maise (Corporate Press/Investor Relations)

Take-Two Interactive Software, Inc.

(646) 536-2932

meg.maise@take2games.com

Take-Two Interactive Software, Inc. Reports

Fourth Quarter Fiscal 2008 Financial Results

Company achieves record revenue and net income for fiscal year 2008

Signs new long-term agreements with Rockstar Games’ senior creative talent

Provides initial guidance for first quarter and fiscal 2009

New York, NY – December 17, 2008 – Take-Two Interactive Software, Inc. (NASDAQ:TTWO) today announced financial results for its fourth quarter and fiscal year ended October 31, 2008.

Net revenue for the fourth quarter was $323.4 million, compared to $292.6 million for the same period of fiscal 2007.  Fourth quarter sales were led by Midnight Club: Los Angeles, NBA 2K9, Grand Theft Auto IV and Carnival Games titles.  Distribution revenue rose year over year, as current generation hardware sales were fueled by the strength of new frontline titles, along with robust demand for Wii software.

Net loss for the fourth quarter was $15.0 million or $0.20 per share, compared to a net loss of $7.1 million or $0.10 per share in the fourth quarter of fiscal 2007.

The fourth quarter 2008 results include $9.3 million in stock-based compensation expense ($0.12 per share); $5.6 million in professional fees and expenses related to unusual legal matters ($0.07 per share); and $1.6 million in business reorganization costs ($0.02 per share). Results for the fourth quarter of 2007 included $4.8 million in stock-based compensation expense ($0.06 per share); $4.5 million in business reorganization costs ($0.06 per share); and $1.5 million in professional fees and expenses related to unusual legal matters ($0.02 per share).

Non-GAAP net income was $1.6 million or $0.02 per share in the fourth quarter of 2008, compared to $3.4 million or $0.05 per share in the fourth quarter of 2007.  (Please refer to Non-GAAP Financial Measures and reconciliation tables included later in this release for additional information and details on Non-GAAP items.)

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Fiscal Year 2008 Results

Net revenues were a record $1,537.5 million for the fiscal year ended October 31, 2008, compared to $981.8 million in fiscal 2007.  Net income for fiscal 2008 was a record $97.1 million or $1.28 per share, compared to a net loss of $138.4 million or $1.93 per share in fiscal 2007.

Fiscal 2008 results include $40.4 million in stock-based compensation expense ($0.53 per share); $16.2 million in professional fees and expenses related to unusual legal matters ($0.21 per share); and $4.5 million in business reorganization costs ($0.06 per share).  Results for fiscal 2007 included $17.3 million in stock-based compensation expense ($0.24 per share); $23.6 million in business reorganization costs ($0.32 per share); and $16.7 million in professional fees and expenses related to unusual legal matters ($0.23 per share).

Non-GAAP net income was a record $158.2 million or $2.08 per share in fiscal 2008, versus a net loss of $81.0 million or $1.13 per share in the comparable period of 2007.  (Please refer to Non-GAAP Financial Measures and reconciliation tables included later in this release for additional information and details on Non-GAAP items.)

Business Highlights

Among the significant recent business developments, Take-Two noted the following:

“Take-Two’s record results for the 2008 fiscal year reflect the fundamental strength of our business model,” said Strauss Zelnick, Chairman of Take-Two.  “Our performance has benefited from the strategies we’ve implemented during the past 18 months to unlock the potential of our creative talent, sharpen our focus on the core business, and take costs out of our operations.  We’ve also signed new agreements with the senior members of the Rockstar Games label, a team that has produced some of the industry’s most extraordinary hits.  These actions were taken in the interest of creating long-term shareholder value, and we believe they have also better positioned the Company to weather an increasingly challenging economic climate.”

Ben Feder, Chief Executive Officer of Take-Two, commented, “While our initial guidance provided today is a prudent response to the difficult current and possible future business conditions, we continue to maintain our strategy of developing a select portfolio of AAA titles. We believe one of the keys to long-term success in our industry is to offer truly outstanding products and a great entertainment experience.  We’re excited about our 2009 pipeline, which will include the introduction of Grand Theft Auto: Chinatown Wars on the Nintendo DS, episodic content for Grand Theft Auto IV on the Xbox 360 and downloadable content for Midnight Club: Los Angeles, as well as new offerings from such powerful franchises as BioShock, Mafia and the 2K Sports roster.  We’ll also continue to invest in initiatives to achieve scale and create new revenue opportunities, while running a disciplined and cost-effective operation.”

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Financial Guidance

The Company is providing initial guidance for the first quarter ending January 31, 2009, and for the fiscal year ending October 31, 2009 as follows:

* Dollars in millions

(a) The Company’s non-GAAP EPS estimates for the first quarter ending January 31, 2009 and fiscal year ending October 31, 2009 exclude approximately $0.14 and $0.52 per share, respectively, of stock-based compensation expense; and approximately $0.01 and $0.05 per share, respectively, of expenses related to unusual legal matters. The Company’s stock-based compensation expense for the first quarter and fiscal 2009 reflects the cost of approximately 2 million stock options and 1.5 million shares issued to ZelnickMedia that are subject to variable accounting. Actual expense to be recorded in connection with these options and shares is dependent upon several factors, including future changes in Take-Two’s stock price.

(b) Q1 and fiscal year 2009 EPS estimates reflect tax expense primarily due to international operations.

Key assumptions and dependencies underlying the Company’s guidance include continued consumer acceptance of the Xbox 360® video game and entertainment system from Microsoft, PLAYSTATION®3 computer entertainment system and Wii™ home video game system from Nintendo; the ability to develop and publish products that capture market share for these current generation systems while continuing to leverage opportunities on certain prior generation platforms; as well as the timely delivery of titles.

Product Pipeline

The following titles shipped during the first quarter of 2009:

Take-Two’s lineup announced to date for the remainder of fiscal 2009 includes the following announced titles:

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Conference Call

Take-Two will host a conference call today at 4:30 p.m. Eastern Time to review these results and discuss other topics.  The call can be accessed by dialing (877) 407-0984 or (201) 689-8577.  A live listen-only webcast of the call will be available by visiting http://ir.take2games.com and a replay will be available following the call at the same location.

Non-GAAP Financial Measures

In addition to reporting financial results in accordance with U.S. generally accepted accounting principles (GAAP), the Company uses non-GAAP measures of financial performance that exclude certain non-recurring or non-cash items.  Non-GAAP gross profit, income (loss) from operations, net income (loss) and earnings (loss) per share are measures that exclude certain non-recurring or non-cash items and should be considered in addition to results prepared in accordance with GAAP. They are not intended to be considered in isolation from, as a substitute for, or superior to, GAAP results.  These non-GAAP financial measures may be different from similarly titled measures used by other companies.

The non-GAAP measures exclude the following items from the Company’s statements of operations:

·                  Business reorganization, restructuring and related expenses

·                  Stock-based compensation

·                  Professional fees and expenses associated with unusual legal and other matters, including the Company’s recently completed strategic review process

·                  Income tax effects of the items listed above

In addition, the Company may consider whether other significant non-recurring items that arise in the future should also be excluded from the non-GAAP financial measures it uses.

The Company believes that these non-GAAP financial measures, when taken into consideration with the corresponding GAAP financial measures, are important in gaining an understanding of the Company’s ongoing business. These non-GAAP financial measures also provide for comparative results from period to period.  Therefore, the Company believes it is appropriate to exclude certain items as follows:

Business reorganization, restructuring and related expenses

In March 2007, the Company’s stockholders elected a new slate of members to Take-Two’s Board of Directors, who immediately removed the Company’s former President and Chief Executive Officer. Subsequently, the Company’s former Chief Financial Officer resigned.  As a result of these actions and the implementation of a business reorganization plan, the Company incurred significant costs in the fiscal years ended October 31, 2007 and October 31, 2008 to reduce headcount, relocate employees and consolidate sales and operational functions. These costs were related to severance, asset write-offs and associated professional fees.  As of October 31, 2008, the Company had substantially concluded the reorganization plan.

The Company does not engage in reorganization activities on a regular basis and therefore believes it is appropriate to exclude business reorganization expenses from its non-GAAP financial measures.

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Stock-based compensation

The Company does not consider stock-based compensation charges when evaluating business performance and management does not contemplate stock-based compensation expense in its short and long-term operating plans.  The Company places greater emphasis on stockholder dilution than accounting charges when assessing the impact of stock-based equity awards.

Professional fees and expenses associated with unusual legal and other matters, including the Company’s recently concluded strategic review process

The Company incurred significant legal, consulting and investment banking expenses in the fiscal year ended October 31, 2008 related to the tender offer by Electronic Arts Inc. to acquire all of the Company’s outstanding shares, which was launched in March 2008 and expired in August 2008, and the Company’s related strategic review process which was completed in October 2008. Additionally, the Company has realized significant legal and other professional fees associated with both the investigation of its historical stock option granting process and the Company’s responses to related governmental inquiries and civil lawsuits. One of management’s primary objectives is to bring conclusion to its outstanding legal matters.  The Company continues to incur expenses for professional fees and has accrued for legal settlements that are outside its ordinary course of business. As a result, the Company has excluded such expenses from its non-GAAP financial measures.

EBITDA and Adjusted EBITDA

Earnings (loss) before interest, taxes, depreciation and amortization (“EBITDA”) is a financial measure not calculated and presented in accordance with U.S. GAAP.  Management uses EBITDA adjusted for business reorganization and related expenses (“Adjusted EBITDA”), among other measures, in evaluating the performance of the Company’s business units.  Adjusted EBITDA is also a significant component of the Company’s incentive compensation plans. Adjusted EBITDA should not be considered in isolation from, or as a substitute for, net income/(loss) prepared in accordance with GAAP.

Reclassifications

Certain prior year amounts have been reclassified to conform to current year presentation.

About Take-Two Interactive Software

Headquartered in New York City, Take-Two Interactive Software, Inc. is a global developer, marketer, distributor and publisher of interactive entertainment software games for the PC,  PLAYSTATION®3 and PlayStation®2 computer entertainment systems, PSP® (PlayStation®Portable) system, Xbox 360® video game and entertainment system from Microsoft, Wii™ and Nintendo DS™. The Company publishes and develops products through its wholly owned labels Rockstar Games, 2K Games, 2K Sports and 2K Play; and distributes software, hardware and accessories in North America through its Jack of All Games subsidiary. Take-Two’s common stock is publicly traded on NASDAQ under the symbol TTWO. For more corporate and product information please visit our website at www.take2games.com.

All trademarks and copyrights contained herein are the property of their respective holders.

Microsoft, Xbox, Xbox 360, Xbox LIVE and the Xbox logos are trademarks of the Microsoft group of companies and are used under license from Microsoft.

“PlayStation”, “PLAYSTATION”, “PSP” and the “PS” Family logo are registered trademarks of Sony Computer Entertainment Inc. Memory Stick Duo™ may be required (sold separately).

Wii and Nintendo DS are trademarks of Nintendo.

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Important Legal Information

This press release may contain forward-looking statements made in reliance upon the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The statements contained herein which are not historical facts are considered forward-looking statements under federal securities laws. Such forward-looking statements are based on the current beliefs of our management as well as assumptions made by and information currently available to them. The Company undertakes no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise. Actual results may vary significantly from these forward-looking statements based on a variety of factors. These risks and uncertainties include our dependence on key management and product development personnel, our dependence on Grand Theft Auto and our ability to develop other hit titles for current generation platforms, the timely release and significant market acceptance of our games, the realization of the anticipated benefits from our recent business reorganization, our ability to raise capital if needed, risks associated with international operations, the matters relating to the Special Committee’s investigation of the Company’s stock option grants and the claims and proceedings relating thereto (including stockholder and derivative litigation, actions by the SEC and/or other governmental agencies and negative tax or other implications for the Company resulting from any accounting adjustments or other factors) and risks associated with the Company’s concluded process to evaluate its strategic alternatives including stockholder litigation arising therefrom. Other important factors are described in the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2007, in the section entitled “Risk Factors,” as updated in the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2008, in the section entitled “Risk Factors,” and can be accessed at www.take2games.com. All forward-looking statements are qualified by these cautionary statements and apply only as of the date they are made. This communication does not constitute an offer to sell or invitation to purchase any securities or the solicitation of an offer to buy any securities.

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TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(1) Reflects $3,080 loss on the sale of Joytech, a video game accessories company; and $1,389 loss on the deconsolidation of Blue Castle Games, Inc., which previously was accounted for as a wholly owned subsidiary in accordance with FIN 46(R).

TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)

TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS

(in thousands, except per share amounts)