Cindi Buckwalter – EVP, IR Strauss Zelnick – Chairman Ben Feder- CEO Lainie Goldstein - CFO Seth Krauss - Counsel Analysts: Heath Terry - Credit Suisse Michael Savner - Banc of America Securities John Taylor - Arcadia Edward Urban - Bear Stearns Douglas Krupp - Cowen and Co. Edward Williams - BMO Capital Markets Eric Handler - Lehman Brothers Daniel Ernst - Hudson Square Research Ben Schachter - UBS Securities

Greetings ladies and gentlemen and welcome to the Take-Two Interactive third quarter 2007 results. (Operator Instructions) It is now my pleasure to introduce your host, Ms. Cindi Buckwalter, Executive Vice President for Take-Two Interactive. Thank you, Ms. Buckwalter, you may begin. Cindi Buckwalter: Welcome, and thank you for joining us for today's call. Today's one-hour call will be led by Strauss Zelnick, our Chairman; Ben Feder, our CEO; and Lainie Goldstein, our CFO. We are also joined by Seth Krauss, Take-Two's Chief Legal Counsel. The entire team will be available to answer questions you may have during the Q&A session following our prepared remarks. 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 securities 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 with the SEC, including our 10-K for the fiscal year ended October 31, 2006 and our 10-Q for the third quarter ended July 31, which we are filing tonight; or, by contacting the SEC. Now let me turn the call over to Strauss.

Thanks Cindi and good afternoon. Thanks for joining us today. I'm very proud of the way Take-Two has performed as an organization in the third quarter, and particularly in the past month. The period hasn’t been without challenges, to say the least. The team at Take-Two has responded to those challenges decisively, constructively and professionally and as a result, we have made solid progress on a number of fronts. This afternoon I would like to comment on our efforts to manage and grow the company's extremely valuable portfolio of video game assets; then Ben will talk about various operational developments and Lainie will review our financial results and guidance. We intend to provide you with a good deal of detail about our past performance and our future plans today, and I hope the takeaway will be this: we have rapidly addressed a number of Take-Two's historic issues and we are now focused on future growth. We are deeply committed to building the company's major game franchises and to creating new ones. Our most important focus in the months and years ahead will be building and diversifying our revenue streams. Simply stated, we are moving from fixing the company to managing and growing our business. Much has already been said about the delay in the release schedule for Grand Theft Auto IV, so I will just touch on the topic briefly today. I think it's important to emphasize that our actions demonstrated that the Take-Two team can and will make tough decisions that we think are in the best interests of our consumers, our core brand and product franchises, and our shareholders. Everyone here agreed on the need to devote the additional time necessary to make a game we can all be proud of. Once that game is delivered, we are confident that consumers will respond enthusiastically, with the fervor that only a Grand Theft Auto title can command. By the way, I just saw the latest build of the game on Friday, and it looks great. In the case of Manhunt 2, our Rockstar team responded quickly and effectively to the ratings issue. They produced a modified version and have received an M rating from the ESRB, while preserving the spirit and experience of this extraordinary game. As a result, Manhunt 2 will launch on Wii, PS2 and PSP in North America in October, in time for Halloween. We have high hopes for the performance of this title. I'm particularly pleased with the tremendous market response to 2K's BioShock. The game has received unprecedented ratings. It is the highest rated Xbox 360 title in history and it is the highest rated game this year across all console platforms, according to MetaCritic. It's also generating lots of buzz among consumers. It is reportedly the top-selling title at Gamestop. In less than a month since launch, we have already shipped more than 1.5 million units; clearly, we have a new hit franchise on our hands. This one was developed internally and we own the IP. We are proving our ability to diversify Take-Two's product portfolio. We are also building on the growing opportunity in casual games. Today we announced the formation of 2K Play, a new publishing label aimed at providing fun and engrossing family-friendly games for players of all ages and skill levels. The cornerstone of 2K Play is our new videogame partnership with Nickelodeon, featuring several of their top-rated properties including Dora the Explorer and Go, Diego, Go! which will be among the first titles to debut under the 2K Play label this fall. Also in the casual game space I'm pleased to say that we already have a hit that demonstrates the breadth of our product range, Carnival Games, for the Wii. The success of this family-oriented, wholly-owned and internally developed title shows that our developers have actually been ahead of the curve engaging and satisfying the demand for casual games. I think it is worth noting that seven of the titles in our pipeline are being developed for the Wii as our teams are responding rapidly to the popularity of that system. We have a really strong pipeline for holiday 2007 and all of 2008. We are also pleased to provide our initial fiscal 2008 financial guidance today. Although it is early, I think it is worth mentioning that 2009 also is shaping up to be strong. Fiscal 2008 includes the highly anticipated titles Grand Theft Auto IV, Midnight Club: Los Angeles, Bully: Scholarship Edition, our complete Sports lineup and Sid Meier's Civilization Revolution. We also recently announced Borderlands, our first person shooter from legendary game developer Gearbox Software. Looking further out to 2009, we have announced Mafia 2, the sequel to the original title that sold over 2 million units. We are also developing L.A. Noire and Beaterator. We have moved those titles out of fiscal 2008. We will have more to say about our fiscal 2009 pipeline over the coming months. Turning back to the reception of our games, our teams recently returned from the Games Convention in Leipzig where we received a terrific response to our upcoming titles. 2K showcased Borderlands, Mafia 2 and Civilization Revolution along with our Sports titles to a very enthusiastic audience. We think the initial gamer response is really promising for these highly anticipated titles. Rockstar debut Table Tennis for the Wii at the convention, and Leipzig was also part of our worldwide launch of the highly anticipated Midnight Club: Los Angeles. We demoed the game to European retailers, the press and almost 200,000 consumers on the show floor. We also unveiled the title to the U.S. press in San Francisco, to consumers at the Penny Arcade Expo in Seattle and to retailers and press in Sydney; it's been a busy time. Judging from the action of worldwide press, retailers and consumers, we think this title will be the best in the racing genre, both critically and commercially. I should note that our Midnight Club franchise has been extremely successful; it sold over 11 million units to date. Our latest version in the title Midnight Club III has already sold 6 million units. Finally, I would like to comment on our outlook for 2K Sports. Based on our assumptions and market outlook, we are budgeting for our sports business to be profitable next year. We think this has been an under -appreciated asset of Take-Two and we made the decision early on to continue our commitment to producing high quality Sports titles. It is gratifying to be able to report that our investment in Sports is already close to contributing to the bottom line in fiscal 2007, and budgeted to be profitable in fiscal 2008. We anticipate increased profitability of the business as it scales up. From the start of our involvement with Take-Two, we believed this could be the most creative and innovative company in our industry. We feel even more confident that is the case now. We are also working hard to make it the most efficient. I would like to turn the call over to Ben.

Thanks, Strauss. As Strauss mentioned, Take-Two has made progress on a number of fronts in the third quarter. I will detail that progress in the next few minutes. Some of the developments that I will discuss have been announced previously, although it is worth recapping them to give you a perspective on how much we have accomplished in a short time. One of our priorities has been to identify alternatives for non-core businesses. We announced on Friday the sale of substantially all of the assets of our Joytech Video Game Accessories business to Mad Catz Interactive. While this was a small deal, it represents a significant milestone in our restructuring efforts. With respect to the Jack Of All Games business, we have entertained a variety of alternatives. We haven't found one that makes economic sense for Take-Two. While we remain open to other alternatives, we plan to operate the business for the foreseeable future in a way that will optimize its performance and take advantage of distribution opportunities and growth in the next gen environment. This business is profitable and we expect that to continue. We continue to work with the Manhattan District Attorney and the SEC toward a resolution of any outstanding matters. You have all seen the announcement last month that Take-Two received a Wells Notice from the SEC. It's important to note and I want to emphasize that the alleged conduct that was the source of the SEC action ceased approximately four years ago, and that none of the individuals said to be involved are employed by the company today. The Wells Notice was anticipated and reflects our continuing dialogue with the SEC staff. We hope and expect to resolve this matter to a settlement rather than to contested litigation of the charges, and we believe the Wells Notice represents a significant step forward toward resolution. I will remind you that professional fees and legal expenses related to the District Attorney and the SEC investigations consumer class action and other regulatory and litigation issues were approximately $15 million year-to-date so the progress we are making in resolving these matters is meaningful to our financial performance. I particularly want to emphasize our success in broadening and diversifying our product portfolio. Today the company can claim more top-tier franchises than at any time in its history. In addition to Grand Theft Auto, our roster of million-plus wholly owned brands includes BioShock, Civilization, Midnight Club, Max Payne, Red Dead Revolver, Manhunt and Bully. We fully intend to leverage these products which are on development cycles that should complement and counterbalance each other. We also have the recurring revenue streams which we expect to be profitable from our Sports business. As Strauss noted earlier, our commitment is to ensure that Take-Two is the most creative, the most innovative, and the most efficient company in our industry. Our progress during the third quarter, divesting of non-core assets, pursuing the resolution of regulatory litigation issues, and importantly, adding to our hit-driven creative portfolio shows how serious we are about that commitment. We believe that the single most important value creator in the future will be growing Take-Two's major game franchises and creating new ones. Our focus in the months and years ahead will be growth and diversity of our major game franchises. Now I'm pleased to turn the call over to Lainie who will review our financial results. Lainie Goldstein: Thanks, Ben and good afternoon everyone. I will be covering several topics today. First I will review our third quarter results; second, our outlook for the remainder of fiscal 2007; and third, our initial guidance for fiscal 2008. Now to our Q3 results. Net revenue was $206 million compared with $241 million a year ago. Our non-GAAP net loss, which excludes unusual charges and stock-based compensation, was $46 million compared to $19 million last year. Non-GAAP net loss per share in Q3 was $0.64 per share compared to a net loss per share of $0.27 last year. Our GAAP results, which include a total of $12.4 million in unusual charges and stock-based compensation expenses were a net loss of approximately $59 million or $0.81 per share. This compares to the net loss of $91 million or $1.29 per share in the third quarter of 2006. Our 2007 Q3 net loss included a $13.5 million valuation allowance against deferred tax assets and caused us to realize no tax benefit for the carryforward tax effect of this loss. This compares to a $59.5 million valuation allowance in Q3 of last year. Our decline in revenue year over year was primarily due to the strong sales last year of our Grand Theft Auto series, especially Grand Theft Auto: Liberty City Stories for PS2 which shipped in June of last year. Our leading titles this quarter were the Darkness, Fantastic Four: Rise of the Silver Surfer, All-Pro Football 2K8 and the BIGS. Our sports business was once again a strong contributor to revenue. Sports titles represented about 28% of our publishing revenue in the third quarter. Looking at the breakdown of our total revenue, the mix was 76% publishing, 24% distribution for the recent quarter compared to 80% publishing, 20% distribution in Q3 of last year. Our distribution business was roughly flat compared to last year’s third quarter. Revenue from distribution of next-gen platforms increased due to the introduction of the Playstation 3 and Wii during our current fiscal year. This is offset by the decline in volume in average selling prices of legacy platform titles along with reduced sales and lower margins for PC titles this year. Looking at our consolidated results, our total gross profit margin for the quarter decreased this year to 18.5% compared to 23.7% last year. This decrease is mainly due to our distribution business being a greater percentage of our overall revenue and higher license cost from the larger number of licensed titles sold this quarter compared to last year when our Grand Theft Auto titles were a significant percentage of revenue. Relative to our Q3 results, we expect gross profit margins to increase in the fourth quarter and in fiscal 2008 as our revenue mix shifts towards internally developed, wholly owned title. Our operating expenses in the third quarter were approximately $95 million, down almost $9 million from last year's third quarter. Operating expenses decreased in all areas except depreciation and amortization, which was up slightly, and selling and marketing which increased as a result of our new All-Pro Football, Stakes and Darkness franchises. G&A fell by approximately $9 million year-over-year due to lower stock-based compensation as a result of the departure of our former management team and savings realized from our development studio closures last year. Also, last year's third quarter included some unusual charges for our stock option investigation, studio closures and certain relocation costs. R&D expenses declined by $6 million year over year driven by the studio closures last year, and higher software capitalization rates this year for next-gen platforms. Additionally, last year's Q3 R&D numbers included some charges related to our studio closures. We also reported $8.5 million in impairment charges last year, primarily related to JoyTech . In this year's third quarter, we incurred business reorganization and related expenses of $7.1 million, due to our cost savings initiatives and management changes. The last area of discussion on our income statement relates to taxes. As a reminder and as we've discussed on previous calls, in light of our domestic cumulative losses for the past three years, we are required under FASB 109 to record a valuation allowance to reduce our deferred tax assets. Accordingly, our effective tax rate was negative 4% in the third quarter. It's important to note that as we generate taxable income in the U.S. in future periods, we will be able to recapture these deductions and have a lower than normal effective tax rate. Moving onto to our balance sheet, at the end of Q3 we had approximately $51.6 million in cash and $11 million of borrowings on our $100 million credit line, with $89 million available under the line. Our overall cash position was solid at the end of Q3; the majority of our cash balance was in Europe. We drew down on our lines because repatriating cash to US is not currently tax efficient. We have had several questions about liquidity and so we would like to address the issue here. We manage cash utilization in a disciplined manner and have taken into account the expected timing of releases including strong cash-generating titles like Grand Theft Auto IV and BioShock. While the recent change in our release schedule affected our near-term cash flow forecast, other than timing, our financial position has not changed. We have our $100 million credit line to fund periodic working capital needs. We will continue to tap into that line as needed. We plan to draw down on the line further in the fourth quarter, so you can expect to see a greater utilization of the line at the end of our fiscal year. We believe that should our business needs or growth opportunities require additional financing in the future, there are various additional liquidity sources available to us. In any event, we will make any determinations regarding financing based on the best interest of all our shareholders. Our accounts receivable reserve stood at about $66 million at end of the quarter, representing approximately 40% of gross receivables. Our Q3 reserves were approximately 16% of trailing six months revenue and about 10% of trailing nine months revenue, about comparable to last year's Q3 level. Inventories at the end of the quarter were approximately $76 million, down significantly from $96 million at year end and $83 million at Q3 last year, due to our reduced sales volume and continued focus on managing Jack's inventories level. The increase in our software development costs and licenses is primarily related to the key title planned for release over the next 12 to 24 months, including Grand Theft Auto IV, L.A. Noire, BioShock, Midnight Club: Los Angeles and Manhunt 2. We currently have over 35 titles in various stages of development on current and next-gen platform. Now to our guidance. For fiscal 2007, we are reiterating the Q4 guidance we previously provided which is detailed in our press release. For fiscal 2008, we are issuing initial guidance today. For the full year, we expect earnings per share in the range of $1.30 to $1.50 on a non-GAAP basis; $1.1 billion to $1.4 billion in revenue. This excludes stock-based compensation expense of $0.45 per share and reorganization and restructuring charges and unusual professional fees and legal expenses of $0.05 per share. On a GAAP basis, EPS to be $0.80 to $1. Additionally, fiscal 2008 estimates reflect tax expense attributable to the company's international operations and the benefit of the partial reversal of the valuation allowance previously reported against deferred tax assets. Let me provide some additional data points on our 2008 outlook. We expect our total revenue mix to be split about 80% publishing and 20% distribution as compared to fiscal 2007, the projected mix of business and publishing will be more favorable from a margin standpoint. On a blended basis for publishing and distribution, we expect gross margins for fiscal 2008 to be about 35%. We expect our split between North America and international revenue to be about 75% to 25%, excluding our Sports and distribution business, our North America and international split is two-thirds to one-third. Within publishing, we expect the relative breakdown for our four key publishing labels to be roughly 60% from Rockstar, 25% from 2K Sports, and 15% from 2K Games and 2K Play. A significant portion of Rockstar's revenue will come from our premium priced titles Grand Theft Auto IV and Midnight Club: Los Angeles on next-gen platforms, compared to 2007, when a large part of Rockstar's business was lower-priced catalog products on current-gen platforms. For 2K Games, we expect a greater percentage of sales to come from higher margin, internally owned and developed titles led by BioShock and Civilization Revolution. In 2K Sports we expect to realize our first year of profitability on a label level in fiscal 2008. This assumption is driven by several factors. First, we will be expanding our range of non-licensed sports titles into additional categories with titles like Top Spin 3. Second, we are driving our continued market share gains relative to our competitors in our NBA and College Basketball titles where we compete head to head against lower rated titles. Lastly, we expect to see a continued ramp up in the next-gen installed base going forward and consequently, the greater percentage of our sales at higher software price points, which will favorably impact our profit margins. Now let me give you an idea of where we see our operating expenses trending. We're coming off of a recent period of high G&A spend, based on some of the regulatory challenges we've had, along with our business reorganization. We see 2008 G&A levels improving by approximately 10% in absolute dollars compared to 2007, based on reduced personnel expenses following our restructuring and decreased professional fees, as we resolve some of our outstanding regulatory issues. Sales and marketing is closely tied to our product releases. We expect a larger marketing spend in absolute dollars in 2008, while holding relatively stable as a percentage of sales. R&D will fluctuate from quarter to quarter based on the products in development. On an annual basis, we expect R&D expenses to increase about 25% due to headcount additions and the higher number of internally developed games in our pipeline. Depreciation and amortization should increase modestly. Based on our current forecast, we expect our effective tax rate to be about 10% in 2008. To give a bit more color on Q1, we plan to release College Hoops 2K8, Bully's Scholarship Edition and our new Nick Jr. Dora the Explorer and Go, Diego, Go! titles. We also expect continuing strong sales from our Q4 releases including BioShock, Manhunt 2, Rockstar Games presents Table Tennis, Carnival Games and NBA 2K8. To summarize, we see additional opportunities to capitalize on the strength of our core franchises and our sports business in fiscal 2008. The benefit of our restructuring will be fully realized by the end of next year. Taking these factors together, we believe we can show a meaningful improvement in our operating performance in 2008. Looking at fiscal 2009 in general terms, we are laying the groundwork to further improve on our expected fiscal 2008 performance. We now have a baseline of recurring annual products in our sports business with our MLB, NBA and NHL titles complemented by our non-licensed titles in other categories including tennis, football and boxing. In addition, we have developed several triple A multi-million unit selling franchises to provide balance in years without a major Grand Theft Auto release; franchises like Midnight Club, Civilization and BioShock. We also have million unit plus selling franchises including Max Payne, Bully, Manhunt and Red Dead Revolver, which provide incremental revenue opportunity and we expect to add to that strong revenue base with new titles. At this point I will turn the call back to Strauss. Strauss Zelnick: Thanks, Lainie. I'd like to conclude by saying that we are very pleased with our recent accomplishments and we look forward to reporting further progress in the months ahead that we believe will lead to profitability and enhance shareholder value. We will now take your questions.

(Operator Instructions) Our first question comes from Heath Terry - Credit Suisse. Heath Terry - Credit Suisse: Lainie, of the 35 titles that you mentioned in development, can you give us a breakdown on where those fall, even roughly, between the two fiscal years and which labels we should anticipate those coming under?

I don't have that detail in front of me, Heath. We can give you an estimate if you give Cindi a call I think we can give you a little more guidance in that area. Heath Terry - Credit Suisse: On the relationship with Nickelodeon, I know you'd mentioned a couple of the titles that this is going to impact with Dora the Explorer and Go, Diego, Go! but given that they obviously have another big videogame relationship, as they develop new titles and as you start to work with them on this, are there additional titles that you can talk about or how many games do you expect to do under this relationship on an ongoing basis?

We can't really talk about any titles other than the ones we have announced. We are excited about our relationship with Nickelodeon. I hope they are excited about doing business with us. I think if you had to parse some of the titles that we are doing versus some of the titles that another video game company is doing, you would see a lower age bracket for us, consistent with our 2K Play announcement. We are hopeful that this is the beginning of a beautiful relationship with Nickelodeon. Beyond that, we can’t really comment on any further titles. Heath Terry - Credit Suisse: And then I know you mentioned the 1.5 million that BioShock has shipped into retail. Can you give us an idea just on the latest data that you’ve got on how closely that matches up with the sell through you have seen so far?

Sell through is pretty terrific. We are not releasing sell through today. I will say that we think it is one of the fastest selling games in video game history. It’s sell through is great, we are thankful that the replenishment rate is pretty quick so that we can go back to the manufacturers and get it out to the marketplace as quickly as they have sold through. But we are very, very pleased with that. We can’t disclose a number today, but we are very pleased with sell through. In fact, we are ecstatic. Heath Terry - Credit Suisse: Given that this is a 2K title and not a Rockstar title, is it fair to assume that you will see a higher margin associated with this title versus some of the others?

Yes, we do. I mean other than what we are paying to the hardware manufacturers, there are virtually no royalties associated with those titles. It all goes to the bottom line.

Your next question comes from Michael Savner - Banc of America Securities. Michael Savner - Banc of America Securities: Lainie, can you go into a little more detail? I'm sure I understood the answer to your prepared remarks on liquidity. If we look at the financials and the guidance you provided today and the cash obligations that we know about through your filings, it does seem very likely that you will need additional liquidity. So first, is that correct in that assumption and if so, can you be little bit more specific on your ideal source of additional liquidity?

I can’t agree with you on that. We really manage our cash very carefully, we look at our cash flow all the time. We have a lot of moving parts and a lot of great titles that are coming out. We are going to look at other opportunities as it make sense for us based on growing our business going forward, but it's not necessarily that we have to get additional liquidity. Michael Savner - Banc of America Securities: So if you don’t agree that means that you think you are in good shape, and that is fine. Second, can you just give a bit more granularity on how you are feeling about the baseball license? Any update in terms of renegotiation on that license? Then, with Pro Football, what have you learned from the release this fall? Anything you would change next time, if you are still pleased with your move into football?

We don't comment on ongoing discussions with third parties and we don't have anything to announce at this time. We do feel good in general about our relationships with all of our licensors and as you heard today, we feel particularly confident about where our sports business is going. In terms of all Pro Football, I think the game is great. It’s performance has not been as stellar as we would have liked. We still think there is plenty of opportunity to sell that and as we head into the holiday season and as the installed base grows. Given the competitive landscape, we continue to believe that by making games that rate higher than the competitors, consumers will follow and certainly that is the case in the other sports in which we make games and we feel that can be true in football as well. Sports is proving to be a positive bet for the company, the momentum is strong, the wins are back, so we feel good about it.

Your next question comes from John Taylor - Arcadia. John Taylor - Arcadia: The guidance range has a delta of $300 million and the EPS range is not that affected apparently by that. I wonder if you could talk a little bit about the high lows and maybe what the key variables are in there that we ought to keep in mind? I am particularly interested in the low revenue number and the low EPS number.

Actually no, the bottom line tracks the top line if you take a look at our historical margins and the industry margins, it actually tracks pretty well. I think the risks are sort of obvious. I would say the biggest risk is what the installed basis and we feel otherwise that we are looking at it reasonably conservative. But clearly the elements are how do our key releases perform? How does our catalog perform? How do consumers pick up the hardware platforms? John Taylor - Arcadia: The key pickups, the reversals and negatives, if you will next year, are hopefully the elimination of some of the G&A and then the turnaround on the tax line. Is there another big one in there?

No. There really isn't. I mean, we are looking at a very strong release schedule and as you pointed out, our costs are declining as are our one-time expenses. This is all news that we previously released and emphasized today. As I said, we are going from fixing the company to building the company and our results are going to look a lot more like industry results in '08, the results of a company that has hit franchises. That's what our numbers are going to look like and frankly our margins are going to look a lot like that too. John Taylor - Arcadia: I wonder if you could give us an estimate of what the capitalized lines are going to look like on the balance sheet at fiscal year end and I am also interested in roughly, how much you are going to amortize from what you entered the fourth quarter with for BioShock as you ship that out?

We don't give that detailed information JT, so I don't have that to share with you today. John Taylor - Arcadia: Not even a forecasted grand total?

No. We have never given that out. John Taylor - Arcadia: Can you give me guesstimate or a forecast on cash flow from ops for the year or for the fourth quarter?

We just announce our cash balances at the quarter. We don't do interim announcements, we just gave you information on Q3 and we also gave information on our general view of liquidity, which is positive. John Taylor - Arcadia: Could you breakdown the inventory between publishing and distribution?

It's about that 60% for distribution and 40% for publishing. John Taylor - Arcadia: 60% of the total is distribution?

Yes.

Your next question comes from Edward Urban - Bear Stearns. Edward Urban - Bear Stearns: I just wanted to follow quickly on gross margin. Lainie, you mentioned your fiscal '08 gross margin estimates, and I'm just wondering -- does that guidance imply a gain on the royalty line, or where do you see the most leverage there? Lainie Goldstein: Mostly we see it coming out with internally developed titles next year versus licensed and externally developed titles in '08. Edward Urban - Bear Stearns: So at this point you're not forecasting much in the way of gains on the royalty line? Lainie Goldstein: No.

Your next question comes from Douglas Krupp - Cowen and Co. Douglas Krupp - Cowen and Co.: Could you discuss a little bit the decision to push L.A. Noire and Beaterator out of fiscal '08? Is that something we could expect to see at the beginning of fiscal '09 before the holiday, or later on? Strauss Zelnick: We're still developing the titles, and we don't sense here that they will be ready in '08, so right now we're just pushing out the release date and we will be more specific as we have more information. But we are continuing to develop titles. I think our decision was driven in part by the fact that we have such a strong release schedule for '08 and a pretty robust one.

Your next question comes from Edward Williams - BMO Capital Markets. Edward Williams - BMO Capital Markets: First of all, looking at the release schedule you provided for fiscal '08, how comprehensive is this relative to what is in your guidance? Can you give us an idea as to how many more titles may be in the year or the timing of those titles within the year? Strauss Zelnick: It is about 80%, and obviously our big titles that we expect are in here. Edward Williams - BMO Capital Markets: Then with regard to the flow of the revenues in fiscal '08, obviously we're looking at GTA 4 coming in the second quarter. Besides that, can you give us an idea as to how the third or fourth quarters may differ in '08 versus '07? Lainie Goldstein: We're not ready to share that information yet. We are not giving out quarterly guidance. But hopefully by the next earnings release we will be ready to share that information. Edward Williams - BMO Capital Markets: You will be able to give us some of the key drive titles in each given quarter? Lainie Goldstein: Right. Edward Williams - BMO Capital Markets: Then looking at Sports quickly for a moment, I think the implication that you have is about $250 million in sports revenue in '08. Can you give us an idea as to how that compares to the expectations for '07?

I think the answer is we expect it to grow '08 over '07, but we don't break it out. I'm actually not going to comment on your estimate, except to say that we do expect '08 to be a better year than '07. Things are going in the right direction. Edward Williams - BMO Capital Markets: With regards to All-Pro Football, can you give us an idea as to what your plans are with that franchise as far as an annual iteration or if that is something that could come every other year?

I hope is that it is an annual iteration. We are looking at it. We intend to ship that next year, although we're looking at it carefully. The performance isn't what we expected it to be, although we believe strategically it is important to have football out there in the marketplace as a key competitor in the marketplace. So in looking at a release we're looking at price points, we are looking at the number of ways of being more successful the next time it comes out. Edward Williams - BMO Capital Markets: Then last question with regards to Manhunt 2, have you gotten any feedback from retailers in the U.S. that they will not carry the game? Strauss Zelnick: Certainly not. It is rated M. There's a whole lot of enthusiasm for the title, as there should be.

Your next question comes from Eric Handler - Lehman Brothers. Eric Handler - Lehman Brothers: You have a big jump in stock comp next year. Is that purely a function of management's recent award of 2% of all the stock outstanding, or is there anything else in there? Secondly, when you look at your guidance for next year, if you achieve within that range, what type of free cash flow do you figure you can get off of that type of net income? Strauss Zelnick: In terms of your first question yes, it is largely driven by the recent formalization of the ZelnickMedia grants. It also includes stock compensation for development employees, which is amortized as the titles are released. On your second point, you can draw your own conclusions. We actually don't project cash flow. Clearly we do expect 2008 to be a very strong and successful year across all meaningful criteria.

Your next question comes from Daniel Ernst - Hudson Square Research. Daniel Ernst - Hudson Square Research: First, on 2K Play, can you talk about when that process began to formulate that new label, and what resources you are putting in place and what additional resources do you think you'll be putting in there in terms of the number of people working on the label and the amount of titles that might be possible to put out in the next fiscal year or two? Secondly, for fiscal '08 the $0.05 seems relatively light. I guess that implies that you are wrapping most of this up this fiscal year. Maybe you could just comment about where you are in that process that you have outlined. Thank you.

Thanks for the questions. In terms of your first question, 2K Play, the origination came just as we came into the company. It was part of the restructuring thinking as we tried to reorganize the company around a label-oriented structure. Quite frankly, this is mostly Global Star being folded into 2K. It takes advantage of a lot of our current infrastructure. The deal with Nickelodeon is something that we negotiated during that restructuring process. Carnival Games was already in place. But we are committed to the label for primarily two reasons. One is we're committed to diversifying the product set and the other is we think that casual games is a growth area for the industry and a growth area for Take-Two. But between the diversifying the product set, commitment to casual gaming, the set of assets and infrastructure that we already had in place, we thought it was a good marriage. Putting it under Take-Two gave us a lot of operating efficiency. With respect to litigation we can't really speak for the District Attorney and we can't speak for the SEC. We can't speak for anybody that is a counterparty to any one of our agreements, frankly. I think Seth is doing a terrific job moving these along as quickly as we can, given that we obviously want to put it behind us on the one hand, but want to act in the interest of shareholders on the other. I'm pleased with the progress. When we have something to report obviously we will, but I can't say anything more than that. Daniel Ernst - Hudson Square Research: I meant more along the lines of the charges. If you spent $15 million year-to-date and next year the number is $3.7 million. Strauss Zelnick: If I could unpack that for you, frankly, I think part of that $15 million is related to litigation, with respect directly to litigation. Part of that $15 million is related to a lot of outside counsel, a lot of disorganization frankly around managing all of that. Since the arrival of Seth we have managed to get our arms around that. It hasn't been easy, but we are getting our arms around it. We're managing it carefully. While we're not providing apples-to-apples, if we were fully organized around outside counsel and litigation, what would it be this year versus last year but I would say even if the level of legal activity were the same as it were last year, we would expect a significant reduction of legal expenses based on the work that Seth has been doing at the company.

Your next question comes from Ben Schachter - UBS Securities. Ben Schachter - UBS Securities: I am wondering a little longer term if you could talk about the brand equity of Grand Theft Auto, how you're going to play that out across various SKUs and various platforms? Really, how do you walk that fine line of producing a lot of titles around this great franchise, but not overstepping it and sort of saturating the market? Really the same question for BioShock, have you thought about that in terms of how far you can bring this franchise to some other platforms, other SKUs? Thanks. Strauss Zelnick: I think one of the ways that we do it is and we have shown this already in practice, is that we're driven by making the best interactive entertainment that anyone makes and being passionate about what we do and bringing it to market when it is ready; not just having a release date on a calendar and putting something in the box on that date. I think that is the first point. I would say just generally speaking what GTA has done has typically been on a release program that is no more frequent than every two years. Some of our competitors for some franchises tend to be really driven by an annual calendar. While the sports business certainly is now an annual calendar business for most titles -- not all, but most -- that is just not true of other interactive entertainment titles from our point of view. We think that there is this balance, not only in terms of how long it takes to develop an A+ title, which is its own sort of internal mechanism that we can't control entirely, it falls into the category we will sell no wine before its time. But there is also an issue of how do you whet the consumers' appetite and yet keep a franchise alive? We don't tend to think that the best way to do that is necessarily on a lock step annual schedule. If development weren't an issue and a concern, and it didn't come first and foremost to us, this notion of being the most creative company and the most innovative company is crucial to our strategy. If it weren't, I would say probably roughly an every three year schedule would be optimal. If you look historically, that has been largely the case for GTA. I expect we would apply roughly the same strategy to BioShock, because BioShock is shaping up to be a very important franchise. I don't want to say more than that about BioShock because I certainly don't want to jinx it, but I feel awfully good about where that is going. Ben Schachter - UBS Securities: Is there anything for other platforms, aside from the next gen console, would you expect a new GTA on a PSP or DS or anything like that? And the same question for BioShock? Strauss Zelnick: I think the answer is to the extent that a platform makes sense and there is a base for it and we can deliver a real really high quality product for it, we have a very open mind. We have relationships with all the console producers. Obviously being broader in terms of console penetration is better for the company. But -- and it is a significant but -- not if the title is compromised. We don't tend to believe in simple ports, throw them in the box and ship them. We want every title to stand on its own and to be a terrific piece of creative entertainment.

I would also say, bear in mind BioShock has been out for three weeks now. We are thrilled with the success, and it has gone beyond our expectations. So give us a little bit of time. The other thing is that Strauss and I have been managing brands for a long, long time. We're not managers that trash the brand to get a short-term hit. So if the expectation is we're going to do what we can and just milk it as quickly as we can, that is not our intention. Our intention is to build long-term brands and long-term franchise value for the company. Ben Schachter - UBS Securities: Do you expect to be having any new titles for PS2 going forward? Thanks.

Look, we know that PS2 has longer legs than people expected. Manhunt is coming out for PS2. We're excited about that. But going forward our platforms are going to be primarily focused on next gen. We think of Take-Two as being a triple-A company, triple-A titles for next gen is going to drive this business. As we said early on when we got to the company, in addition to being a Microsoft and Sony shop, we are also interested in making inroads into the Nintendo world. You'll see a strong pipeline of Wii products and DS products, and we expect to exploit those platforms as well.

There are no further questions in queue. I would like to hand it back over to management. Strauss Zelnick: Thank you very much for joining us today. We appreciate your attending and stay tuned.