THE INTERVIEW STRAUSS ZELNICK
LIFE AFTER GRAND THEFT AUTO
How do you follow the most successful video game launch of all time? Christopher Dring asks Take-Two CEO Strauss Zelnick
T
here were queues snaking around the corner at even the most remote games retailer. It featured in every national
newspaper, on every radio station and across every news channel. And in just over six months, 33m units were sold into retail, making GTA V the fastest selling title in games industry history. The impressive arrivals of
Xbox One and PS4 are nothing compared to what Rockstar’s latest delivered last September. Yet let’s step away for a second
from the impact GTA may or may not have on the games industry as a whole, and take a closer look at what it did closer to home. Take-Two, parent of GTA label Rockstar Games, posted revenue of $2.4bn for its last financial year, the biggest haul in its history. It now has cash close to $1bn in the bank. Yet immediately after revealing this last month, Take- Two’s share price fell. Only slightly, but it fell all the same.
HIT FACTORY Because even today, even after BioShock, Borderlands and Red Dead Redemption, Take-Two is still incorrectly viewed as the ‘GTA publisher’. The games giant that’s over-reliant on just one single IP. “Over the past several years,
Take-Two has been transformed from a company that was dependent on one series into a financially strong, global interactive entertainment enterprise with numerous successful franchises over a variety of genres,” insists Take-Two CEO Strauss Zelnick. “Today, our company is defined by its top creative talent; unwavering commitment to
June 6th 2014
quality; and world-class marketing that turns product launches into pop-culture events. Our portfolio includes ten franchises with over five million unit sales, and more than 40 individual, multi-million unit selling titles. “Success is about consistency. Our business has outperformed expectations for the last seven consecutive quarters. We achieved this by having the right strategy, the best talent, the deepest portfolio
Borderlands is 2K’s most sucessful series selling 17m units
of Take-Two and its vast potential is reflected in our significant profit outlook for the current fiscal year, and our expectation for continued non-GAAP profitability every year for the foreseeable future.”
Our primary channel partner remains
physical retail. Strauss Zelnick, Take-Two
of franchises and the financial resources required to invest in our business – including the successful transition to next-gen.” He adds: “We’ve been in this business for over 20 years and few companies have enjoyed that longevity. The successful evolution
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NO ONE-HIT WONDER Zelnick has every right to feel frustrated. NBA 2K14 has sold 6.5m units, BioShock Infinite 6m, and Borderlands 2 has shifted 9m. While those numbers combined fail to touch the GTA V phenomenon, those are figures that would be the envy of its rivals. But there are signs of growing confidence in Take-Two. Aside from a temporary post-financials dip, T2’s share price has been steadily rising throughout 2014. “I hope the market is beginning to
see that we are becoming a more reliable enterprise,” says Zelnick. “I think the market sees the
diversification of our line-up, that digitally delivered revenue is representing a greater percentage of our business, and that our business model is being transformed as well. It used to
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be one big release over a couple of year period, today it is ten big franchises, multiple releases and a good deal of spending happening after the initial release in what we call ‘recurrent consumer spending’.” Take-Two’s ‘recurrent consumer spending’ (which to you and I means money generated through DLC and microtransactions) grew by 65 per cent to $435m (£260m) last year. A lot of that has been down to GTA Online, and Zelnick expects this to be a major area of growth for Take-Two over the coming years, too. And when you consider the cost of making triple-A titles, does that mean fewer games and more digital initiatives moving forward? “It is possible
that over time that you have a multiplicity
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