INTERVIEW: STRAUSS ZELNICK, TAKE-TWO
Why do you think the market is in a depression at the moment? Is it time for a new console? If you exclude Wii – which one could argue is at least partially a different market than Xbox 360 and PS3 – the market is not in a depression. Moreover, we’ve seen and will continue to see huge growth in new forms of interactive entertainment. If you give consumers what they want – whether that’s a social game on Facebook or a triple-A, multi- hour experience on a console – they’ll come out for it. As for the technology itself, we still have plenty of room to push the limits of creativity in the current console generation.
Retail still accounts for 90 per cent of Take- Two’s business, and its big upcoming projects include (clockwise from top left) BioShock Infinite, Duke Nukem Forever, The Darkness II and Xcom
Take-Two has been really active in digital, how much does it account for your business now? Our digital content accounted for about nine per cent of our revenue during FY 2011, led by offerings for Red Dead Redemption, Borderlands and Sid Meier’s Civilization V. Over the long-term, we expect digital revenue to increase as a per cent of our overall revenue; that said, it will naturally vary based on our release schedule and the success of our titles.
One of the most exciting areas of interactive entertainment is online gaming, including MMO and social gaming. Asia’s MMO market represents about $8.7bn. To that end, we’ve undertaken strategic initiatives to deliver triple-A experiences through online platforms. These include 2K Games’ planned summer release of Civilization Worldfor Facebook,
2K Sports’
partnership with Tencent to develop an online basketball game based on our NBA 2K
franchise in Asia, 2K
Sports’ partnership with Nexon to develop an online baseball simulation in South Korea; and 2K Games’ partnership with XLGAMES to create an MMO based on one of our franchises for the Asian market. These initiatives are all examples of how we are pursuing emerging opportunities by leading with our content while minimising our financial risk. We’re very encouraged by the prospects for these projects. Over time, if we get it right, we ought to be able to deliver significant revenues and profit for Take-Two, and we will continue to pursue these and other online initiatives at the same time as we execute on our core strategy of delivering triple-A games for consoles.
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www.mcvuk.com
If you exclude Wii the market is certainly not in a depression. Strauss Zelnick, Take-Two
GameStop has made big moves in digital. What do you make of retail’s attempts to stay relevant in this shifting market place? While 90 per cent of our business is comprised of the sale of physical goods, there is clearly an industry- wide paradigm shift underway. It is not surprising that retail is actively engaged in evolving their business, especially given the lessons learned with music, books and DVDs. Our goal is to distribute our content
to consumers how and where they want it. I’m confident we’ll maintain our strong relationships with retail as they develop new ways to make our content available to consumers.
You’ve just had a big new IP hit with L.A. Noire. How do you strike the balance between creating IP and developing exisiting brands? We think that Take-Two owns the strongest portfolio of IP in our industry. We have worked diligently to diversify our portfolio and to create more hits – and the team has done a superb job in executing against that strategy. I think that we’ve done a good job in balancing our line-up between existing franchises and new IPs.
June 3rd 2011 21
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