Paul Eibeler, Chief Executive Officer, President, Director Karl Winters, Chief Financial Officer Cindi Buckwalter, Executive Vice-President

Heath Terry, Credit Suisse First Boston Edward Williams, Harris Nesbitt Elizabeth Osur, Smith Barney Citigroup Anthony Gikas, Piper Jaffray & Co Mike Wallace, UBS Mike Hickey, Janco Partners John Taylor, Arcadia Investment Corporation Chris Clock, SIG Glen Reid, Bear Stearns

Good day ladies and gentleman and welcome to the Take-Two Interactive Software First Quarter Fiscal 2006 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press “*0” on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Ms. Cindi Buckwalter, Executive Vice-President of Take-Two Interactive Software. Thank you, Ms. Buckwalter, you may begin. Cynthia Buckwalter, Executive Vice President of Take-Two Interactive Software: Thank you. Good afternoon and thank you for joining us today. Before we begin, I would first like to quickly review our Safe Harbor Statement by reminding everyone that the statements made during this call that are not historical facts are considered forward-looking statements under Federal Security Laws. These forward-looking statements are based on the beliefs of our management as well as assumptions made by and information currently available to us at this time. Actual operating results may vary significantly from these forward-looking statements based on a variety of factors. These important factors are described in our filings at the FTC including our 10-K for the year ended October 31, 2005, which maybe obtained from our website at www.take2games.com or by contacting the FTC. Today’s call will consist of a presentation by our management team followed by a question and answer period. With me today from Take-Two are Paul Eibeler, our President and CEO, and Karl Winters, our CFO. Today, Karl, will first review our Q1 results, then Paul will talk about our recent releases in our product pipeline. Karl… Karl Winters, Chief Financial Officer: Thanks Cindi and good afternoon. Net sales for the 1st Quarter were $265 million compared to $502 million a year ago. Our net loss for the Quarter was $29 million or 41 cents per share compared to a net profit of $55 million or 79 cents per diluted share in the 1st Quarter of 2005. Revenue was down primarily due to the significant comparison we were up against from last year’s strong holiday sales of Grand Theft Auto: San Andreas for PlayStation2, which accounted for $287 million or about 57% of last year’s 1st Quarter total sales. And as we said on our last call, both our 4th Quarter Fiscal 2005 and 1st Quarter results this year were negatively impacted by the light of unexpected consumer purchases of video games and lower average selling prices as the industry transitions to NexGen hardware. With that said, our revenue came in slightly ahead of the range we had provided in early January, primarily due to the higher unexpected distribution line. This year in Q1, Grand Theft Auto: Liberty City Stories for PSP was our top title, representing approximately 20% of the Quarter’s total revenue. This was followed by Grand Theft Auto: San Andreas with PlayStation2 at approximately 6% of sales and Civilization IV on PC at about 5% of sales. Our sports business also performed quite well representing close to 13% of total revenue with Xbox 360 titles at about 6% of revenue. Our Jack of All Games business increased from Q4 to approximately $107 million in Q1 as they ramped up their hardware and software sales during the holiday season. We’ve also additionally been closely monitoring Jack’s inventory positions through the difficult holiday season and have reduced total distribution inventory by over $25 million year over year as of the end of Q1. Jack continues to work to leverage their size and scale by securing more exclusive distributional arrangements for value products while at the same time providing full support to their customers by also supplying the new hardware platforms and the new frontline software titles that drive customer traffic. But we believe that Jack will have interest in opportunities this year as our hardware transition progresses. Our gross profit margin for the Quarter was approximately 21% compared to 36% last year. The primary reason for the decreased margin was related to our business mix, as our higher margin publishing sales represented a smaller percentage of revenue compared to last year’s 1st Quarter. Our publishing distribution split in the Quarter was roughly 60% publishing and 40% distribution compared to our publishing distribution split of 71% and 29% last year. Within our distribution business, a greater percentage of revenue this year came from hardware sales, which carry lower growth margins. But most importantly, the significant percentage of Grand Theft Auto: San Andreas in last year’s 1st Quarter was the major contributor to our higher growth margin last year. Additionally, this year we realized higher software amortization related to a greater number of our sports titles and other internally developed products that were released in the Quarter. Lastly, we experienced lower average retail pricing in the market this holiday season. These factors are only partially offset by reduction and royalty expenses and a greater percentage of higher margin PC titles from the current period. Our operating expenses in the 1st Quarter were approximately $104 million, down about $3 million from last year’s 1st Quarter. Our selling and marketing and R&D expenses have climbed year over year. However, we saw growth over last year in G&A due to several factors. G&A expenses this year included approximately a $3 million in costs related to the expansion of stocks options, which was required under FAS 123 beginning our 1st Quarter. This year, we also incurred about $2 million more in IT and professional fees related to audit fees, stocks compliance, and legal matters and we’ve expended our IT and finance global head count in the past year to support these initiatives. We also realized an additional $2 million for increased rents and new offices for the development studios we’ve acquired since last year’s 1st Quarter. These increases are only partially offset by reducing the incentive compensation this year. We were cash flow positive in the 1st Quarter generating approximately $38 million as we collected receivables from many of our big holiday releases. At the end of Q1, we had about $143 million in cash as compared to $107 million in cash at year end. I’d like to briefly review some other key balance sheet items. Net accounts receivable at the end of the 1st Quarter were approximately $84 million compared to $198 million at the end of Q4 and $137 million at this time last year. Our DSOs in Q1 were approximately 29 days compared to 58 days in the 4th Quarter and 25 days in the 1st Quarter last year. Accounts receivable reserves stood at about $91 million at the end of the Quarter representing approximately 52% of gross receivables. Our Q1 reserves were approximately 16% of trailing six months revenue and about 12% of trailing nine months revenue, higher than last year’s Q1 levels due to the mix of publishing product we sold during the holiday period. Inventories at the end of the Quarter were approximately $107 million, down significantly from $136 million at year end and $134 million at Q1 last year due to our reduced business this holiday season. Our software development cost and licenses totalled about $129 million at the end of the Quarter compared to about $118 million at year end and about $96 million at this time last year. The increase from these costs relates primarily to our diversification strategy, which is in line with the continued execution on our plans to further expand our portfolio in depth. We’ve also signed up a significant number of new products for our 2K Games and 2K Sports labels and are putting significant development resources behind Rockstar’s current and next-generation products so that we are well positioned in 2007 and beyond. We currently have over 120 SKUs in various stages of development, representing over 40 different brands. Approximately 70 SKUs are planned for Fiscal 2006 including the titles we’ve already released this year. Now, a few comments about the present and future: We’re assuming a continued cautious retail environment due to the ongoing console transition. We also assume that 360 hardware availabilities will remain constrained and that the pricing pressure we are seeing now in CurrentGen software will continue through 2006. Having said that, we believe that our Q2 lineup looks very promising; 2K’s Major League Baseball and Oblivion titles are both highly anticipated, and we expect strong consumer demand for Grand Theft Auto: Liberty City Stories on console, which is currently planned for release late in the Quarter. We are continuing to manage our business for the opportunities that we see in 2007 and beyond. At this point, I will turn the call over to Paul to provide more detail on our recent releases in our product lineup for the remainder of 2006, as well as an early glimpse into 2007. Paul… Paul Eibeler, President and CEO Take-Two: Thanks Karl. Good afternoon and thanks for joining us today. Our results for the 1st Quarter of Fiscal 2006 were disappointing and reflected the challenging conditions in our market during the past holiday season. The video game industry is in the midst of a difficult transition, which presents us with a number of near-term market uncertainties. As a result, we are taking steps to streamline our business, reexamining our product line, and closely evaluating our release schedule for both CurrentGen and NextGen platforms. But any steps we take will not be at the expense of the quality of our products and brands. It’s important to emphasize that the transition will create new opportunities. It is hardware platforms that allow our developers to express the full range of their talents in creating compelling new content. In the meantime, it is crucial that we manage through the transition as effectively as possible while ensuring that Take-Two is in a strong competitive position for the upturn that we believe begins in ‘07. Our plan to achieve these goals has three basic elements: One, continue to support our high-quality product line for Fiscal 2006. We believe great content remains the driving factor for growth and we are very excited about the quality of our release schedule over the next year. Two, improve the efficiency of our operations. We are streamlining our business and controlling costs, while at the same time continuing to support the creative talent that will produce our next wave of hit products. Three, maintain our investment in diverse development resources. As the industry moves beyond the current transition, we will be well positioned to leverage the opportunities of NextGen platforms, thanks to our talented internal development studios, our growing portfolio brands, and our expansion into new genres such as sports. Now, I’d like to spend a few moments discussing these initiatives. The ‘06 lineup is one of the strongest in our history with a broad range of products that are winning praise from gamers and critics alike. Our strategy is to continue to develop quality games for current generation of hardware while introducing new games for NextGen platforms such as the Xbox 360 and PSP. For example, Grand Theft Auto: Liberty City Stories for the PSP was our top tile in the Quarter and has been the number one PSP title in the US every month since its launch in October. We anticipate strong sales throughout 2006 as the hardware base continues to build. The strong contribution of Grand Theft Auto: San Andreas in the Quarter demonstrates longevity of our Grand Theft Auto brand. In late January, Grand Theft Auto: San Andreas joined our growing roster of greatest hits titles for PS2 and platinum hits for Xbox. We are extremely proud of the continued strong performance of Rockstar products. Rockstar is clearly the dominant video game publishing label in this cycle with five original franchises selling over 1 million units during the current generation. On top of those five proprietary brands, Rockstar created the blockbuster Grand Theft Auto series which generated unprecedented demand. This brand has sold more than 40 million units during the current console cycle alone. This is a testament to the hard work, talent, and creative story telling of the Rockstar organization now over 700 individuals. We have a long-term agreement that will enable Rockstar to continue to make great products under its current management team for many years to come with terms of allowing the interest of all parties to drive the product sales and company performance. Moving on to 2K, we continue to see strong sales momentum from Civilization IV which shipped late in Q4. 24 enjoyed the high game rankings and was named ‘05 PC game of the year, best online game, and best strategy game by IGN. NBA 2K6, NHL 2K6, and AMP3 for the Xbox 360 all shipped during the 1st Quarter in conjunction with the hardware launch. NBA 2K6 outsold GA’s title in head-to-head competition in December and January according to the MPD data. Also, in the 1st Quarter, we shipped College Hoops 2K6 for PlayStation2 and Xbox featuring a variety of new features for the franchise, and Torino 2006 shipped for PlayStation2, Xbox, and PC in January, in advance of the Winter Olympics. Looking at Q2, we are adding to our strong lineup. 24: The Game for PlayStation2 shipped in North America last week. It was developed in conjunction with Fox TV and the television series creators. Kiefer Sutherland and other actors from the show are featured in the game. Global Star shipped Soduko Fever for Game Boy Advance based on the popular puzzle game. From Rockstar, we leveraged the success of the multimillionaire selling Midnight Club franchise with Midnight Club III: DUB Edition Remix shipping next week. Remix has as in New City Tokyo along with new music, new races, and new cars and will resell for $19.99 for the PlayStation2 Greatest Hits Program and Xbox Platinum Hits Collection. Both fans and new players will be drawn by the speeding style that defines this series and the great value proposition at under $20. Shipping in just a few weeks from 2K is Elder Scrolls IV: Oblivion for PC and 360, one of the most highly anticipated games this year. We are pleased with the NextGen look and feel of the title and are proud to be working with the Bethesda team on such a platform defining title. The game is in production now and will ship on March 20th. Building on the tremendous reception that Liberty City Stories received for the PSP, we plan to ship the PlayStation2 version late in the 2nd Quarter. We are confident that extending this theme to the console market will allow more gamers to experience this unique compelling content. We are also continuing to expand our sports franchises in the 2nd Quarter. College Hoops 2K6 for Xbox 360 is in stores this week in advance of March Madness. It is the only next-generation college basketball title available on this system and like out NBA 2K6 Xbox 360 title, the game has the pace of play and entire feature set found in the CurrentGen game, plus 2K Sports added more schools and enhancements that only the power of the Xbox 360 can offer by high-definition realism and the excitement and passion of a college crowd. Also in Q2, we’ll introduce the first products under our exclusive partnership with Major League Baseball. MLB 2K6 for PlayStation2 and Xbox will ship in early April and the Xbox 360 PSP and Gade2 versions ship in late April. We are taking this time to make the extra investments giving gamers the high quality they expect. As we proved with the NBA 2K6 on the Xbox 360, details such as realistic crowd movement and true television broadcast camera angles complement great game play and resonate with gamers. The enhanced more comprehensive batting, pitching, fielding, and coaching controls combined with the inside-edge intelligence adds an unprecedented element of realism to the baseball video game genre. We’re also featuring a number of major advertisers in MLB 2K6 who are attracted to the audience of sports games. As for our sports titles, we’ll focus on PSP’s plan for release in April, Top Spin 2, the Mexican Storm of this critically acclaimed top-selling tennis brand is also coming to the Xbox 360 DS and Game Boy Advance in April. We’re equally enthusiastic about the products planned for the second half of ’06, which includes a strong roster of offering from Rockstar and 2K. Yesterday, Rockstar announced Table Tennis for Xbox 360 for release in the 3rd Quarter. Rockstar, San Diego designed this title, used the full power of the 360 hardware taking advantage of high-resolution graphics and high-speed animation to create a fun and addictive game. We believe they will capture the passion of the highly popular sport in a way that only Rockstar can. Later this year, Rockstar will bring Bully to PlayStation2 and Xbox. Additional titles include a sequel of Rockstar’s brands for console along with two PSP titles, including one base on the Grand Theft Auto franchise. And from 2K, we have the Da Vinci Code for CurrentGen console and PC planned for the release in conjunction with the Columbia Pictures feature film. In the summer, 2K will introduce Prey for PC and Xbox 360, a highly anticipated game from Human-Edge Studios and 3D Realms. In the fall, we have Stronghold Legends for PC, a sequel to the popular Stronghold brand, Family Guy based on the Emmy Award winning hit, Fox Television Series, for the current-generation console systems also in the fall. And later this year, 2K Sports will sequel its popular license titles with the NBA, NHL, College Hoops, and additional titles based on our Major League Baseball license. Looking forward to ’07, we already have a solid lineup of titles in development. Old next-generation lineup from Rockstar including sequels to the several best-selling Rockstar franchises. The 2K Sports lineup of titles based on our multi-year licenses with MLB, NBA, MCA, and NHL. The 2K sports non-license title lineup from the development teams that created tennis, snowboarding, boxing, and other sports games. The NextGen console game BioShock from 2K’s recently acquired Rational Games Development Studio. A new product, The Darkness, the NextGen platforms based on the popular comic book series, and also in ’07 2K is planning to leverage a number of its premier original franchises into the mobile game arena including Topspin and Civilization. I noted earlier that cost discipline is also a key part of our strategy for managing through the uncertainties of the current trends transition. In this regard, we have consolidated two of our development studios, PopTop and the recently acquired Firaxis Studio. This will allow us to combine the strong creative talents of these studios into a single entity under the development headed by Sid Meier. We’re pleased that Sid will be honored next week with Old Star on the Walker Game in San Francisco. We’re also evaluating plans to reduce overhead in several key areas. We’re working to bring cost down to the greatest extents possible while recognizing that we need to be well positioned for ’07. In our Jack of All Games distribution business, the management team remains focused on bottom line results. With their inventory down significantly, Jack can be flexible in taking advantage of opportunities that arise. Their focus is on providing value-added services as they leverage their strength in the overall retail marketplace and capitalize on hardware transition opportunities. While we are absolutely determined to exercise strict cost discipline, we know that no company ever cut its way to growth. That’s why we believe it is essential to continue to invest in the future by building our development resources, supporting our products with appropriate marketing, and expanding our ability to offer a more diversified product line. We have made investments which will be important building blocks for growth. For example, for Access, which gives us the extraordinary development and management talent; the Rational Games with their critically acclaimed development teams in Boston and Australia; Rockstar Leeds which gives us some exceptional entrées into the portable games market, and our sports development studios which diversify our revenue stream. In summary, while the console transition is challenging, we are dealing with the current industry conditions and working hard to position Take-Two for future opportunities. We’re continuing to create great products that will cement our strong following among gamers and seeking a balance of managing our expenses while investing in creative resources to build a diversified business base. We look forward to the results of these efforts in the future. Again, thanks for your time today. The operator will now open up the call to questions.

Thank you. Ladies and gentleman, at this time we will be conducting a question and answer session. If you’d like to ask a question, please press “*1” on your telephone keypad. The confirmation tone will indicate your line is in the question queue. To remove your questions from the queue, please press “*2.” And for persons using speaker equipment it may be necessary to pick up your handset before pressing the “*” key. We will allow everyone the opportunity to ask a question, please limit your time to one question. Thank you. Our first question is coming from Heath Terry with Credit Suisse First Boston. Please state your question. Heath Terry, Credit Suisse First Boston: Great, thanks. Karl, could you — just one kind of housekeeping thing — can you tell us what the 123R charge was for this quarter? Karl Winters, Chief Financial Officer: The charge in total was about $4.5 million. Heath Terry, Credit Suisse First Boston: Okay, thanks. Then, Paul, can you talk about the pricing strategy for Grand Theft Auto: Liberty City Stories, not a lot has been holding premium prices lately, do you feel like this is one that you can maybe reach for given the Grand Theft Auto brand? Paul Eibeler, Chief Executive Officer, President, Director: We’ve been very successful with Liberty City Stories at the higher price point, full price on the PSP, which is a different type of consumer and we’ve delivered a unique game for the PSP, and that’s a $249 purchase, and we’re looking at lower pricing on Liberty City Stories for the console, which is $149 or below purchase. We are very, very protective of the Grand Theft Auto brand. We’ve delivered unprecedented and a tremendous value to the consumer in terms of the size of the game and the scope, and we think Liberty City Stories is a great product and we look forward to bringing it to the console, but it’s also at a different time in the transition and it ties the products together, because it does tie back into the original Grand Theft Auto III story line, so it’s very engaging for the consumer. So, we’re excited about it, but it will be at lower prices. Heath Terry, Credit Suisse First Boston: The cost cutting or cost containment focus, I guess, Karl mentioned that there are going to be seventy skews in ’06; how does that compare with what you released in ’05? And then looking at ’06, how much of the focus on cost containment is going to come from rationalizing your skew count down to your most profitable…maybe focusing on your most profitable franchises? Karl Winters, Chief Financial Officer: Heath, I think the SKU count of about 70 for ’06 is comparable to ’05. Having said that, we’ve certainly added a number of internal resources by way of studio development that build out in the sports business and some significant titles that were involved with, for instance, with Firaxis and all in addition to the great line upcoming from Rockstar. So, the cost exercise that we’ve tried to undertake on a regular basis but certainly with an intensity most recently given the holiday season focuses not only on the pipeline and the embedded people supporting those products but on every cross within the business. So, we’re keenly sensitive to the GNA levels as well as the margin performance, for instance. So, I don’t foresee an immediate future that we would suddenly have a significant dent in the pipeline by way of products that we would walk away from, but more perhaps of a right sizing of timing of that product in the marketplace and just being very cost conscious about how we’re spending elsewhere within the business. Paul Eibeler, Chief Executive Officer, President, Director: This is Paul. The past holiday season was different than we expected. There is uncertainty in the market in terms of flow of hardware, hardware price reductions, introductions of the NextGen, the timing. So, we’re just taking that all into account and we do believe there’s a lot of opportunity on this existing gen and we’re showing several products in the release schedule that will take advantage of that. But, given the uncertainty in the market, we’re just reacting accordingly. We have tremendous leverage in the retail marketplace, we have tremendous leverage with the consumer, and we just want to maximize that leverage going forward. Heath Terry, Credit Suisse First Boston: And then, the long-term employment contract that you mentioned for the Rockstar team, can you give us some idea of what exactly was done to better align their interests with that of the overall company, to what extent was their performance tied to the performance of the company’s equity, a part of this longer term deal? Paul Eibeler, Chief Executive Officer, President, Director: While we don’t give specifics, what we can say is that the Rockstar group is extremely committed, passionate, dedicated group of developers. With that, they entered the last cycle with about 100 people. Today, they’re 700 plus, so it’s a big organization and we had to adjust how we compensate that organization to fit all the different development teams that they have. We’ve aligned them with management, we’ve communicated with them on a regular basis in terms of obstacles in the business today and challenges in the business, and we’re just excited that we have this behind us and we can move forward. Karl Winters, Chief Financial Officer: And the alignment in terms of what we call stake holder interests, we certainly used equity compensation programs in the past with regard to the development of talent and leadership, and we would expect to have more of the same in the future. Heath Terry, Credit Suisse First Boston: Great, alright, I’ll hand it off to somebody else.

Thank you. Our next question is coming from Edward Williams with Harris Nesbitt. Please state your question. Edward Williams, Harris Nesbitt: Hi guys, it’s Tom standing in for Edward. On your internal development, can you tell us where you stand with the number of developers in total including the 700 at Rockstar and how many you expect that to go to by the end of the year? Karl Winters, Chief Financial Officer: Tom, I think the answer to that question is approximately 1300 people in development. And then in terms of trending it for the year, we’ve obviously made a number of acquisitions, we’ve benefitted over time. I think where we stand right at this moment is nicely aimed with the portfolio for ‘06 and ’07. You haven’t seen anything from us for several months, you know, new announcements or things like that, of acquiring additional internal talent. We always have a watchful eye on the marketplace. Something extraordinary comes along, we’re not going to just pass it by; but we feel very good about the lineup of products and resources standing behind us on an internal footing for the near term future. Edward Williams, Harris Nesbitt: Okay, and of the total skews that you have in development; can you give us a rough idea how the breaks down on CurrentGen verus NextGen. Karl Winters, Chief Financial Officer: Yeah, the CurrentGen is about 70 or so of the 120 that we have underway in NextGen, including…we consider PSP be part of the NextGen, of about 50 skews. Edward Williams, Harris Nesbitt: Okay. Lastly, if I could, you had mentioned mobile games, can you talk about what your plan or strategy is there, are you thinking of partnering with somebody or do you think you might try to build that up on you own? Cindi Buckwalter, Executive Vice-President: Tom, this is Cindi. We would expect to probably work with other parties. This is obviously an area that has tremendous growth opportunity and we think that there’s quite a bit of content that we now have in our portfolio in terms of the 2K Sports lineup, as Paul mentioned, Topspin and with 2K Games, titles like Civilization that lend themselves very well to mobile gaming. So, you will see us do more of that going forward, but I would say that we would generally work with third parties to achieve that objective. Edward Williams, Harry Nesbitt: Okay great, thank you.

Thank you. Our next question is coming from Elizabeth Osur with Citigroup. Please state your question. Elizabeth Osur, Smith Barney Citigroup: Thanks. A couple of just quick questions. First, you spoke about ____, I am not clear of what kinds of initiatives you guys are planning. Could you be a little bit more specific on where we might be seeing cost come out of the system? Paul Eibeler, Chief Executive Officer, President, Director: Well, one example we gave was combining the two studios of PopTop and Firaxis. We think there are a lot of synergies between the studios that we can take advantage of, we think there’s a lot of cost efficiencies in just managing the business, in terms that we’ve brought our sales organizations together we think there are buying opportunities on the media side, things like that that we could be doing more efficiently as we get through this transition. Elizabeth Osur, Smith Barney Citigroup: Could you quantify that? Karl Winters, Chief Financial Officer: Well Liz, I think at this point rather than trying to pencil this all into one right-sized number, our commitment is to continue to work this certainly over the near term and if there is something more meaningful that we get to by way of a specific announcement, we would certainly try to get that into the marketplace at that point. Elizabeth Osur, Smith Barney Citigroup: Okay, a totally separate topic here. Can you talk about changes you’re still making to the Bully game or when we might expect to see that away, are we just holding off until the holiday season or is there something else going on? Paul Eibeler, Chief Executive Officer, President, Director: Given the climate, we just went back and evaluated the game. We think that Bully has a tremendous opportunity because it’s based on the great story telling of the Rockstar, it’s a fictional Bulworth Academy in school yard antics. We do follow all the ESRB guidelines and the plan is for us to release that in the back half of ’05. Elizabeth Osur, Smith Barney Citigroup: Okay, thanks a lot.

Our next question is coming from Anthony Gikas with Piper Jaffray. Please state your question. Anthony Gikas, Piper Jaffray & Co: Hi, good afternoon guys, a couple of questions. Can you elaborate a little bit more on the operating cost in the Quarter? I think you talked about the GNA, I might have missed your comments on why sales and marketing where so high and may be what the trend could be over the course of the next couple Quarters, the tax rate we should use for the remainder of the year, and then may be just…the third question…your thoughts on why we’re seeing such a slow down in the industry and this is not specific to Take-Two, but is this a quality or innovation issue that we’re seeing with CurrentGen products or if the consumer is purely holding off in anticipation of getting the new hardware platform. Karl Winters, Chief Financial Officer: With regard to the first couple of questions, the tax rate is obviously sensitive to the balance pre-tax levels that we generate in different jurisdictions and we’ve have had some discussion and I usually keep these comments fairly brief about where we operate. Generally speaking we operate at very favorable rates overseas and less favorable domestically, so the tax rate is going to follow where the income is really produced. Having said that, the benefit that we have here is as higher than the actual rates we’ve seen in the recent past, and that would tell you that we are generating pre-tax levels certainly in higher tax rate jurisdictions. For the future, we’ll have to see how the mix goes, but that would probably be the best clue I could leave you with in terms of model to mix in terms of your expectations and take it from there. With regard to sales and marketing, we obviously had a fairly large offering of products just in terms of absolute skew counts for the holiday season. We tried to support those products sensibly given what was happening in the marketplace. We were factual for instance about trying to get behind the sports business, which was a new initiative really for us this year and sort of going head to head in the marketplace, and we’re pleased with certain results that came from that, but that absolutely kept the absolute dollars worth of marketing expense up in comparison to a prior year, which was a year heavily dependent on one title; it does not require the same committed amount of marketing expense over time. Paul Eibeler, Chief Executive Officer, President, Director: Tony, in regards to your question about the consumer, we did see the effect of transition; we believe some consumers were looking forward to NextGen. We’re very pleased with the appetite for the consumer, particularly for our games on PSP and on 360, in terms of the quantity of games, the attach rate. I just got back, I was with a number of retail customers out at the destination meeting in Florida and retailers were starting to be much more optimistic than in the past. They were seeing some real excitement created at resale, some of it is just about managing expectations, more excited about the response for some of our titles. We think a title like Oblivion could really drive a lot of business. We just shipped 24 to a good start, a good launch, just shipped it last week, so we think that we’re working through this and we remain optimistic going into the back half of ‘06 and ‘07. Anthony Gikas, Piper Jaffray & Co: What are your expectations for industry sales in calendar ‘06 and calendar ’07? Karl Winters, Chief Financial Officer: That’s why we haven’t given guidance because we’re uncertain right now about hardware numbers, and we see a lot of positive indicators in the business, but we’re just being very cautious right now given the marketplace.

Thank you. Our next question is coming from Mike Wallace with UBS. Please state your question. Mike Wallace, UBS: Hi, a couple of things. Let me just address it directly. You know, people have been saying that houses are leaving, do you specifically address them, are they staying or are they locked up. Second, could you just addressed some of the FTC things, timings, City of LA, what are you thinking about these law suits that have popped up? Karl Winters, Chief Financial Officer: Okay, we don’t like commenting on individuals but Sam Howser in particular and his brother Dan and Terry and Les are all key parts of the Rockstar organization. They were the founders of the Rockstar label and the Rockstar brand. If you can imagine, they are very, very busy working on NextGen, they are very excited about all the resources that they have. It’s a different type of business today than it was at the start of the last cycle where they had 100 people when they were introducing their first products for PlayStation2. Now they, as you can see by the release schedule, have the number one game on the PSP, excited about bringing a different type of offering to the Xbox 360, and they still have some real opportunities for this gen with several titles that they’re bringing out. We’re very excited about working with them and they’re under contract for us for the long term, so all the rumors and everything that is was out there I don’t give a lot of credence to. In terms of the FTC, we really don’t have an update. We have complied with all the requests. We are following and continue and have followed all the guidelines and rules of the ESRB and support their rating systems. We are committed to building awareness of the ESRB and the ratings and educating everyone in the business about the huge diversity of entertainment products and the diverse audience for interactive games. So, part of it is just an education process but we really don’t have any specific updates. Cindi Buckwalter, Executive Vice-President: Just in terms of the City of LA law suits, no, we don’t specifically comment on litigation but we obviously believe that suits don’t have any merit and we’ll continue to defend ourselves against them. Mike Wallace, UBS: Okay, and just one more, any current thinking on the next console version of GTA? I know everything you say is inclusive of Sony or Microsoft, but what is your stance, are you going to wait and see what the installed base is before you make any decisions or are your leaning towards a partner with one or the other, what’s your thought process? Paul Eibeler, Chief Executive Officer, President, Director: Right now, we’re very excited about the plans for the GTA franchise. We were pretty unique in approaching the PSP market with new content and now we’re excited about bringing that content, the Liberty City Stories, to the console market. We have another PSP game planned on the Grand Theft Auto franchise in the back half of the year, and I think we’re in a very envious position because we have the biggest brand in the industry and we are working very, very hard to bring that product out the way we have in the past where we beat expectations and our guys are very, very excited about the opportunity that the NextGen hardware presents. I think we’re in the driver seat in terms of bringing that product to market. Mike Wallace, UBS: Is it possible you do one for the 360 and a different version for the PS3? Paul Eibeler, Chief Executive Officer, President, Director: Anything is possible but it will be what you’d expect in a great Grand Theft Auto product. Cindi Buckwalter, Executive Vice-President: I’d like to think it’s just as important to refer back to our press release where we said that we have a strong line up of NextGen products from Rockstar in 2007 including some of their biggest franchises. Mike Wallace, UBS: Okay, thanks

Thank you. Our next question is coming from Mike Hickey with Janco Partners. Please state your question. Mike Hickey, Janco Partners: Hi guys, thinking about your Rockstar Table Tennis game, is this ____, can you give us a little bit of an idea of how good the game play is going be here and then can you quantify may be a little bit of the development effort in terms of capital outlay, and then can we expect this extend to the PlayStation portability DS or maybe a mobile application? Then lastly, on the distribution side, it’s a casual game, could we see this being downloaded through Xbox live? Paul Eibeler, Chief Executive Officer, President, Director: Right now, we just showed the Table Tennis game to all the key retailers last week and it received a great response from them. Its fun, its addictive, it takes advantage of the 360 of the NextGen hardware capabilities. It’s a different product than you’d expect from the Rockstar, but once you play it and get hooked I think you’ll be a fan of the game. We think it has all those opportunities that you described in terms of putting that brand out to other systems, downloads, and online play, but right now we’re just focused on getting this game out. The plan is to ship it in May and we’ll give you more information as it enfolds. Mike Hickey, Janco Partners: Great, and the last question. For your Q4, you talked about returning to profitability. Originally, I think you were modeling in for a PlayStation3 launch, may be 5% of your sales for your original Fiscal 2006 guidance, are you still anticipating the PlayStation 3 launch, potentially earliest model than for your Q4 and can you give us any sense if it was released in October if you have titles currently available for release at launch? Karl Winters, Chief Financial Officer: Mike, I’m going to underneath your question and go out of it in terms of when PlayStation3 is really going to launch, and our crystal ball doesn’t really address that and it looks certainly in terms of further information. I think you can read plenty about holiday expectations and press with October 31st, that’s a very interesting timeframe as a fiscal year end. So, we will just have to stay tuned on that point. I don’t think we can really give you any further insights in terms of what we’re thinking. Mike Hickey, Janco Partners: Thanks guys.

Thank you. Our next question is coming from John Taylor with Arcadia Investment Corporation. Please state your question. John Taylor, Arcadia Investment Corporation: Hi, I’ve got a couple of questions too. Let me just follow up on that for a second, Karl, if I could. So, let’s assume Sony is in November or December with PS3, how much of your 4th Quarter guidance of getting back in a profitability depends on they being able to ship in October or earlier? Karl Winters, Chief Financial Officer: John, we’re not in the guidance business in that timeframe at a specific level. I can recall that, I think…if we had any comment on this, we did not expect any significant percentage performance that was directly related to our ’06 business. But then going back, I think at least six months in terms of that commentary, so I wouldn’t read too much into that, but that’s certainly where we stood at that point in time. John Taylor, Arcadia Investment Corporation: Okay great. Thanks for that refresher. And then, in terms of inventory, you mentioned you burned off a bunch of Jacks inventory, could you give us a split of what the inventory was between distribution and publishing? Karl Winters, Chief Financial Officer: Inventory breaks down about 50/50 on publishing versus distribution. John Taylor, Arcadia Investment Corporation: Okay, great. And then, in the past you’ve given us a kind of an average acquisition cost on the Jacks side, can you give us an update on that? Karl Winters, Chief Financial Officer: In terms of average cost of inventory? John Taylor, Arcadia Investment Corporation: Yeah. Karl Winters, Chief Financial Officer: That’s still living in about the same neighborhood, about 80% of the skews that we carry have an acquired cost of $14.99 or less. John Taylor, Arcadia Investment Corporation: Okay, great. And then in your amortization development cost, etc. reported in the first quarter, did you burn off anything on an accelerated basis, you could call out or was that a pretty normal sort of amortization rate? Karl Winters, Chief Financial Officer: We clearly as sensitive to the amortization of our costs, in terms of what we expect for the product overall, so if volumes come up you could look at the unit average of that cost and it appears to be something less. I don’t quite know how to answer your question. I don’t think we took anything by way of an acceleration or we’ve looked at something of any size and just walked away from it and just rolled it off the day before, you know, we would have otherwise released it or we didn’t abandon anything of significance. The rest of the mass is directly related to what we expect for the product overall. John Taylor, Arcadia Investment Corporation: Okay, great. And then, as you look at the product line for ’06 and ’07, could you give us a sense of which games kind of have the most robust and unique online feature set, particularly as it might relate to Xbox live; which games really have had a lot of effort and focus put on developing those features? Paul Eibeler, Chief Executive Officer, President, Director: Our sports games have been significant in terms of the online features, particularly with Xbox live, and that is one area where I can tell you on our Rockstar side we’re spending a lot of time because we think there is tremendous potential as a feature set and then tremendous earning opportunities down the road with the online potential. And then, when we look at the 2K games business, you’ll see a lot of great online abilities and components in 360 boxes we build them going forward. John Taylor, Arcadia Investment Corporation: Karl, at the risk of having you send us to Sony for this answer, let me try this one, have you gotten much detail on how Sony’s approaching the online business model as it relates to PS3? Karl Winters, Chief Financial Officer: At the risk of…

Thank you. Our next question is coming from Chris Clock with SIG. Please state your question. Chris Clock, SIG: Great, thank you. Just a few questions. You guys were able to generate positive cash flows despite what was obviously a tough Quarter given the timing of the working capital changes. So, when we look forward into the April and the July Quarters, any sense for cash flows there and the timing of working cap volumes and how that might affect the cash flows in the next two Quarters? Karl Winters, Chief Financial Officer: Chris, we obviously have a number of significant releases that we think will be positive performers or in terms of the near term, whether it’s titles or the baseball game or Elder Scrolls or Liberty Series Stories or Prey, there’s a lot of stuff going on for us in the springtime, so we feel good about our lineup in the near term and the resultant impact on cash. So, we ended rather nicely for the Quarter with cash up over October 31st, and yeah we continue to monitor and be sensitive to where we are and what we’re burning. Chris Clock, SIG: Let me rephrase that. Would it be safe to say your objective over the next couple of Quarters prior to the Q4 profitability would be to try to at least get to a cash flow number that’s close to flag or break even or is there some kind of target that you’re reaching for the April and July Quarters? Karl Winters, Chief Financial Officer: That’s a difficult question again to answer and there’s no guidance, because it’s yet another number on the balance sheet that reflects what’s going on within the business, but we have done rather well over recent years and living on organic cash flows, this is a transition. We had a good war chest entering at the beginning part of that transition and we’re going to continue to be very careful with that as we move forward. But, we’ll have to see where the business is and we think we have a number of titles that on the one hand could have some upside-down expectations, but we’ll just have to see how the consumers behave. Chris Clock, SIG: Two quick final questions: GTA, the next GTA on the PSP, would it be safe to assume that would come out at $49.99? Karl Winters, Chief Financial Officer: At this point, it would be safe, yes. Chris Clock, SIG: And then lastly, the profitability, return to profitability in Q4, would that be driven mostly by exposure to NextGen, CurrentGen, Portables, or combination of all three, is there anything that you’re pressing on in particular in that Quarter in terms of your expectations? Paul Eibeler, Chief Executive Officer, President, Director: I think it would be driven by a combination of all three. Certainly the PSP opportunity is big when you bring a brand like Grant Theft Auto, but then we just have that window there that we think business will pick up significantly. Chris Clock, SIG: Great, thank you.

Thank you. Our next question is coming from Glen Reid with Bear Stearns. Please state your question. Glen Reid, Bear Stearns: Hi, thanks. Three quick ones. Could you sort of give us the sense for profitability of your sports business, how that’s been, sort of year to date, and how you think that’s trending over the next several Quarters? Secondly, pricing on Triple A titles, CurrentGen other than…you just mentioned the PSP title going out at $50, but on the console can we expect to see lower pricing there, and on NextGen do you expect to see $60 on all your NextGen releases. Then, third, could you also give us a sense on the mix of publishing versus distribution this year and perhaps next year? Thanks. Karl Winters, Chief Financial Officer: I think with regard to the first question, which was profitability on sports, given the current series that we just ended where the business operator got an overall loss, that correction is a difficult one in terms of identifying which part of our overhead structures would you identify against any particular margin with contribution coming from any of our divisions. Having said that, I think we were pleased with the sports business. The basketball game did very well in the first Quarter and we’re encouraged by what we see for that business in the future. But, quite frankly given consumer behavior in the holiday season, it’s a difficult period to sort of benchmark against and we certainly expect to see a more positive consumer behavior as we get further in the transition and on to the NextGen opportunities. The Triple A pricing of CurrentGen… Paul Eibeler, Chief Executive Officer, President, Director: We have filled in a $39.99 given the market conditions on the majority of our existing gen, and we’re very pleased with the $59 price point and how that has held up for a number of titles on NextGen. We think that that consumer is excited, who buys NextGen and wants a quality product, and we think on the existing gen prices now $39 and $49 poor quality products will hold up when we move some of our more mass titles for the $39 range on existing gen. Karl Winters, Chief Financial Officer: You had the third part of the question and the last question was, rough split on publishing versus distribution. All I can observe really is that historically we’ve worked in the zone of 60% publishing while we’re not again in the guidance mode for the foreseeable future. We’re certainly encouraged by the trend that Jack showed, Q1 over Q4 of last year where the volume did pick up and we were hopeful of that occurring. The opportunities for Jacks in the future certainly we think continue because it has always played successfully in between the middle of the CurrentGen to the NextGen strategy as the NextGen product starts to become available to it for distribution at lower prices. So, we’ll just have to see where the business goes. Glen Reid, Bear Stearns: Okay, thanks. Cindi Buckwalter, Executive Vice-President: With that we’d like to thank you all for joining us today and we look forward to seeing some of you at E3 in May. Thank you very much.

Thank you. This concludes today’s conference. Thank you all for your participation.