Take-Two CEO Strauss Zelnick agrees with PlayStation’s subscription plan
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Take-Two CEO Strauss Zelnick agrees with PlayStation’s stance on not releasing brand new AAA products into a subscription service on the day they’re released.
Speaking at GI Live: Online last month, the publisher boss reiterated his views on the business model, but says it can be effective for catalogue games. He feels that for the majority of gamers, subscriptions simply don’t make sense in the same way that they do in music and TV.
Take-Two has regularly supported services such as Xbox Game Pass with legacy titles, including with the likes of Grand Theft Auto and NBA. Last year, around the launch of its Grand Theft Auto: The Trilogy Definitive Edition, it put one of the games from the collection into Game Pass (GTA San Andreas) and PlayStation Now (GTA Vice City). And going back to 2019, Take-Two’s Private Division publishing arm launched The Outer Worlds into Game Pass on the same day it launched at retail (it followed Microsoft’s acquisition of the game’s developer Obsidian).
“We’ve supported various subscription services and we’re happy to do so,” Zelnick said during his keynote. “Our scepticism has been around making frontline console products available day and date with subscription. That doesn’t make any sense to us, because economically speaking, we don’t think consumers are prepared to pay for that. And we can’t afford to turn our business upside down in a way that doesn’t make sense economically. There always has to be an intersection between what the consumer wants and what the publisher is able to do. And you know, it doesn’t make sense to do that for our properties. That’s our opinion, and I think Sony agrees with us, because it said so.
“It’s not clear that your broad based audience wants access to many hundreds of games”
“It can potentially be great for catalogue properties, sales of properties that have been in the market for a while and their price has been reduced. It can make economic sense to offer those on a subscription basis.”
Outside of the economics, Zelnick isn’t convinced that subscription services will appeal beyond a certain subset of gamers.
“Not enough people are talking about what’s right for the consumers. So I understand why linear entertainment subscriptions exist. People in this country [US], households, consume 150 hours of linear programming a month. That’s over 100 properties. [You can] fill that need with two or three subscription services. That’s a very good deal compared to buying a la carte or even compared to prior cable packages.
“But interactive entertainment is consumed at a different level, about 45 hours a month and in a different way. It’s perhaps two or three or four properties in a month. It’s certainly not over 100 properties. So it’s not clear that your broad based audience wants access to many hundreds of games in a month and is willing to pay for them. It is possible that small subset of the audience wants that, but I don’t think it’s a broad base, because it’s not how people tend to consume interactive entertainment.
“By the way, I could be completely wrong about this, which is totally fine. This company does not operate based on one person’s opinions, including mine. And when it makes sense, we support subscription services and if that’s where the consumer wants to be, that’s where we’ll be.”
Zelnick’s comments came as part of a talk on the future of games at GI Live: Online. The executive discussed consolidation, streaming and the metaverse during the 20-minute session. In terms of the metaverse, it is a concept that Take-Two believes in, but Zelnick is critical of the amount of investment put into the buzzword.
“I’m not sceptical at all about huge, interactive, dynamic, entertaining worlds, because our company is responsible for three of them. The biggest on earth, Grand Theft Auto Online, and Red Dead Redemption Online and NBA 2K Online, and others to come. So I’m a dyed-in-the-wool believer that people will go to digital worlds to be entertained, and if you offer a super entertaining experience, I think people will flock to it. Where my scepticism lives is every company suddenly believing that by saying the word ‘metaverse’, adjacent to their company’s business strategy, that that means they will be transformed and nirvana is around the corner. And naturally that’s not the case.
“Entertaining people is really hard. Building hit properties is incredibly hard. It costs a lot of money, it takes a lot of time and there’s a massive amount of risk attached to it. So when a company that didn’t exist two years ago launches with a White Paper, a blockchain-based metaverse, and sells hundreds of millions of dollars of digital real estate in a two day period, sure, I’m a little sceptical because I have a healthy respect for how hard it is to entertain people within that real estate.”
Alongside talk about the latest trends in video games, Zelnick concluded by discussing Take-Two’s recent $12.7 billion acquisition of Zynga, and what comes next for the publisher.
“We’re a work in progress,” he concluded. “We just closed the big transaction, so what we have ahead of us is plenty of hard work and that’s what’s behind us, too. I’m fond of saying arrogance is the enemy of continued success. We see ourselves as a lean, ambitious company with a culture we’re proud of, a culture of inclusion, transparency, honesty, some diplomacy, and kindness. [A company] that is focused entirely on excellence, starting with creative excellence.
“We believe we have now the best collection of owned intellectual property across both console and mobile interactive entertainment businesses. We’re proud of that. We have a lot of hits in the marketplace, the Zynga franchises, the Take-Two mobile games that continue to perform, and the massive hits that come from 2K and Rockstar on Private Division.
“So we’re in a great place. And if you assume the Microsoft/Activision deal closes, we’re the number two pure play interactive entertainment company on earth. So we’re number two, that means we have to try harder. We intend to try harder.”