Blaming a variety of factors, including poor catalog sales and weak results in its publishing business, Take-Two also cut its full-year earnings forecast 20 percent.

For the second fiscal quarter, which ended April 30, Take-Two reported sales of $153 million, down from the $170 million projection the company made in April. It posted a loss of 33 cents a share, compared with projections of a loss of 15 cents a share.

The company also announced that Richard W. Roedel, its interim chief executive, had been named permanent chief executive. He is the third chief executive since 2000. Mr. Roedel became interim chief executive on April 14, after Jeffrey A. Lapin resigned.

Shares of Take-Two closed at $28.65, down $1.62.

The quarterly results continue the roller coaster ride for Take-Two and its investors. The Securities and Exchange Commission has been investigating the company for possible accounting irregularities for more than two years; Take-Two has had a revolving door of management, including four chief financial officers in three years.

At the same time, the Grand Theft Auto franchise has been an extraordinary success, accounting for 39 percent of the company's $1 billion sales in 2003, said Stewart A. Halpern, an analyst with RBC Capital Markets. The company has said it plans to release the series' next incarnation, Grand Theft Auto: San Andreas, in October, and industry analysts said it could be one of the best-selling games of all time.

Heath Terry, an analyst with Credit Suisse First Boston, wrote to investors in a note about Take-Two that "while it would be the easy thing to do, we are not ready to throw in the towel."

"While this is the latest in a painfully long string of management missteps, financial disappointments and product delays," he wrote, "we believe the new management team is putting the right structure in place to prevent reoccurrences of these problems."

But Marc Cahodes, a partner with Rocker Partners, which has shorted the stock and will profit if the share price falls, said many Wall Street analysts are guilty of forgiving consistent lack of performance by the company.

Take-Two said yesterday that for fiscal 2004, it would have sales of $1.13 billion to $1.15 billion and earnings of $1.60 to $1.65 a share. In April, it projected that its full-year sales would be $1.17 billion and that earnings would be $2. The company estimated in December 2003 that it would earn $2.60 a share.

Mr. Roedel, who joined the company's board in 2002 as an independent director, said in an interview that the company had been "a bit ambitious with our expectations for ourselves for 2004, and then we had a disappointing year in terms of sales execution."

He said that in particular there was "really weak" performance in the catalog business, which sells back titles. He said he hoped the company's latest guidance would give investors a reliable outlook.

"We've put some of these execution issues behind us," he said. "We've reset our expectations to the point where we can deliver."