• Hey, guest user. Hope you're enjoying NeoGAF! Have you considered registering for an account? Come join us and add your take to the daily discourse.

Bloomberg: Where Take-Two Interactive Is Seeing Video Games Growth

T

Tripon

Member
Take-Two Interactive Chairman and CEO Strauss Zelnick discusses his sales expectations for the holiday season. He speaks on "Bloomberg ‹GO›." (Source: Bloomberg)
Click to expand...

http://www.bloomberg.com/news/video...-two-interactive-is-seeing-video-games-growth

8 minute video. Please watch to understand.

People asked for synopsis:

Edit:
Bloomberg: - GTA. NBA2K. WHERE GROWTH?
Take 2: GROWTH COMES FROM GAMES. GAMES GOOD. RED DEAD REVOLUTION. BIOSHOCK. GAMES. GOOD GAMES MAKE GROWTH.

Bloomberg: WHAT ABOUT ZYNGA. CANDY CRUSH.
Take 2: WE RELY ON HITS FOR REVENUE.

Bloomberg: eSPORTS THE FUTURE?
Take 2: MAYBE? WE ON TWITCH. BUT NO MONEY WE MAKE. BUT MAYBE?

Bloomberg: DO YOU ENJOY VIDEOGAME?
Take 2: I NO PLAY VIDEOGAME?

Bloomberg: GAME GOOD. ME PLAY $60 GAME. ME ALSO PAY DLC. ME ALSO PAY MICROTRANSATIONS FUTURE?

Take 2: PRESENT.

Bloomberg: OLD BUSINESS MODEL. BUY GAME. PLAY GAME. NO MAKE MONEY ON PLAYING GAME. NEW MODEL. BUY GAME. ENGAGE. ENGAGE. MAKE MONEY ON ENGAGEMENT.

Bloomberg: ADDICTION ON GAMES?
Take 2: NO ADDICTION. WE LIKE DATA.

Bloomberg: MOBILE? INTERNATIONAL?
Take 2: 45% OUTSIDE OF AMERICA. UK, ASIA GOOD. CAUSAL GOOD. FREE TO PLAY GOOD. WE GOOD.

Bloomberg: AFFECTED BY CHINA?
Take 2: NOT AFFECTED BY CHINA.

Bloomberg: VR?
Take 2: NO VR. NO IDEA. IF GOOD.

Bloomberg: CHINA CENSOR? TENCENT?
Take 2: YES. MAYBE. WE DON'T CARE. MAKE MONEY. TENCENT GOOD.

Bloomberg: HAVE PRODUCT RELEASE SCHEDULE?
Take 2: YES.

Bloomberg: WISH FOR STAR WARS?
Take 2: SURE, WHY NOT.
 
S

soultron

Banned
Was a good watch.

Interesting that he mentions RDR and Bioshock as hits since '07. RDR especially since it's been so long.

Summary:
XB1 and PS4 will provide growth this holiday and beyond.
Mentions growth now, GTA5 & NBA2K16 recently.
Talks about Twitch investment, that they don't really monetise from events but other places (ads, subs, etc.).
Commentator talks about how he spends past initial ask of $60, Zelnick echoes that by calling it "recurrent consumer spending" (RCS) and that T2 considers that part of growth now. Says it's not something they can rely on; they need to focus on delighting consumers first for RCS to work.
Mentions UK and Asia as big growing markets.
NBA2K Online, Civ Online mentioned as big F2P titles in Asian markets.
Aware but not afraid of "China slowdown."
Remains to be seen if VR is big, but have invested in R&D. (Zelnick sounds a bit hesitant, waiting for others to prove the market first?)
Asked about censorship in China, Zelnick admits it's complicated, but having partners like TenCent (legally obligated partnership?) makes it easier.
5-10 big releases every year was strategy, tries to bank on 1 big hit/year.
11 franchises with >5mln sales on an individual entry/release (would be good to find citation)
45 titles with >2mln sales (would be good to find citation)
New IP every year, sequels to existing IPs every year
Asked about missing out on Star Wars license, Zelnick doesn't really think it's a big loss, says his offerings aren't really threatened by SW games being a presence this holiday
 
F

FZZ

Banned
  • Growth is coming from the current gen (PS4, XBO)
  • Take Two has invested into Twitch
  • CEO doesn't play video games or enjoy watching them, still thinks things like Twitch will factor into video games being the primary growth in the entertainment industry
  • Industry change from buying and game and stay playing the game (through use of IAP)
  • Main priority is delighting consumers then monetizing - usual PR talk
  • See bigger growth in Asia and worldwide markets than Mobile, but Mobile/wireless are still seen as a growth area
  • Still in R&D mode for VR, haven't fully invested into it
  • Waiting for VR to launch, CEO seems skeptical
  • Publishing in China (what the CEO sees as one of the biggest markets for growth) requires a partner. Process is complicated. Take-Two has partnered with Tencent.
  • Take-Two attempts to release 5-10 big titles every year
  • Every year they want to bring in at least 1 new IP, and a variety of sequels
  • Random Star Wars talk about how everyone wants to have access to the IP at the moment, happy for EA that they have it

That should be it.
 
entremet

entremet

Member
Summary:

Expects strong growth coming from current gen platforms--Sony and MS boxes--this holiday.

Looks to introduce new IP each year.

Catalog IP provide 40 percent of revenues

Talks about the growth of DLC/Season Passes. New opportunity for the industry. Looks to provide delight, not just squeezing customers of dollars.

45 percent net revenue comes outside from the NA market. Big growth in Asia.

NBA2K online is their biggest game in China.

In R/D mode for VR tech. Not super sold on it. Jury is still out. Will pursue if market is lucrative.

Talks about Chinese partner Tencent.

Looks to release 5-10 releases per year. Looks to introduce new IP every year. Has 11 franchises that have sold 5 million or more per individual release.

edit. Beaten by secs.
 
C

Chairman Yang

if he talks about books, you better damn well listen
Wow...Zelnick's answers are extremely smart and the questions are interesting. Definitely worth watching the whole video.
 
V

valkillmore

Member
I cannot wait to see a trailer for a new Rockstar game. When will we get one? Early 2016 perhaps is the best bet? Maybe this year. Didn't the first trailer for GTA V drop in November of 2012?
 
T

Tripon

Member
JeffZero said:
Did the Cookie Monster hijack the OP?
Click to expand...

Somebody had to make a silly version. ;P

Finale Fireworker said:
OP synopsis is hilarious and amazing. Thank you so much.

But, tell me more about this "Red Dead Revolution"...
Click to expand...

Typo. ;P And thanks.

More seriously, everyone should watch the interview, I think Strauss Zelnick had a good interview and its nice to see a guy who running a big company be on 'trend' like Take 2 is.
 
P

PS5

Neo Member
Dude knows his stuff.

He mentions that there are only 4 major players in their space... who are those four?
 
O

Obliterator

Member
Good answers and nice seeing some answers that aren't "mobile, mobile, mobile"

Also the next Red Dead must be getting close by now
 
R

RamzaIsCool

The Amiga Brotherhood
PS5 said:
Dude knows his stuff.

He mentions that there are only 4 major players in their space... who are those four?
Click to expand...

EA, Activision-Blizzard, Ubisoft and Take2. This is the case for like a decade no? Was there ever another publisher that mingled in this space?
 
O

Obliterator

Member
Nirolak said:
Correct, though Warner is becoming more competitive.

They have to keep up with the kind of output they had this year though to do that.
Click to expand...

Yeah hopefully WB can continue their strong output. The more major pubs we have investing money in the industry the better.

But man their announced 2016 lineup isn't very strong now that I think about it right?
 
N

Nirolak

Mrgrgr
Obliterator said:
Yeah hopefully WB can continue their strong output. The more major pubs we have investing money in the industry the better.

But man their announced 2016 lineup isn't very strong now that I think about it right?
Click to expand...
IIRC their 2016 announced line-up is LEGO: Marvel Avengers and... I think that's it.

Suicide Squad is rather likely for next year and Injustice 2 is a possibility. Obviously more LEGO games as well, but I can't think of much else. Seems a tad early for Mordor 2.
 
O

Obliterator

Member
Nirolak said:
IIRC their 2016 announced line-up is LEGO: Marvel Avengers and... I think that's it.

Suicide Squad is rather likely for next year and Injustice 2 is a possibility. Obviously more LEGO games as well, but I can't think of much else. Seems a tad early for Mordor 2.
Click to expand...

Yeah thats what I was thinking which was a bummer after just how great 2015 is for them. It seems like they kind of put everything they had in late 2014-2015 and next year will be much softer. Unless they have a couple big hitters they just haven't announced yet. Injustice 2 maybe but we had MKX this year and I agree Mordor 2 seems like a 2017 title not 2016. Hmm hopefully they have some stuff cooking
 
N

Nirolak

Mrgrgr
RamzaIsCool said:
EA, Activision-Blizzard, Ubisoft and Take2. This is the case for like a decade no? Was there ever another publisher that mingled in this space?
Click to expand...

There was a time when THQ was the third largest publisher in the US on the strength of their licensed games business.

Usobuko said:
Don't forget Zenimax too!
Click to expand...
ZeniMax is more of a one trick pony in terms of competing. Bethesda Games Studios' titles sell incredibly well, but they're one team and thus effectively making one franchise.

Beyond that, nothing is selling enough to get them out of the mid-tiers. Dishonored is probably their second biggest hit, but that's done what, maybe 4 million copies? There are years where Ubisoft releases three 10 million sellers (and other titles to boot) and they're one of the weaker major competitors. Games likes Wolfenstein and The Evil Within are doing a lot less than Dishonored as well.

They are becoming a more notable mid-tier, but I don't feel they're actively working to get out of that band yet.

Shard said:
Square Enix?
Click to expand...
They're near the top of the mid-tier, but until they can get more consistent with big hits, they essentially have a bunch of drops in the bucket that add up to 1 to 1.5 games at a flagship publisher. They're on track for their best year ever heavily fortified by great mobile and MMO success relative to their stature, but they're still only looking at like $1.2 billion in revenue compared to EA and Activision's $4+ billion.

It's not impossible they move up at some point if they keep investing heavily. They're similar to Warner in this regard, but I just have less faith in them to not deteriorate their flagship brands.
 
F

funkystudent

Member
Seems like every big publisher is taking the "I dunno. We are messing with it but will wait and see" stance on VR.

I guess after Kinect and Move (and for a lot of traditional games, the wii) flopped as software drivers I dont blame them.
 
O

Obliterator

Member
funkystudent said:
Seems like every big publisher is taking the "I dunno. We are messing with it but will wait and see" stance on VR.

I guess after Kinect and Move (and for a lot of traditional games, the wii) flopped as software drivers I dont blame them.
Click to expand...

I think the tricky thing about VR is its so different no one really knows what "works".

Until we see some kind of breakthrough title that kind of defines the product I don't forsee a ton of support
 
Bolivar687

Bolivar687

Banned
My two big takeaways:

1) Take Two stock has tripled over the last five years. It more or less tracked a software application index (is currently ahead of it) and has outperformed the S&P 500. This mirrors something Michael Pachter said on episode 2 of Pachter Factor on SIFTD. Investors are starting to see big gaming companies not just as risk/growth positions (although Take Two has certainly brought a return) but they're now putting money into these companies as they would other safe investments, as something that's going to generally track the rest of the market.

2) The strategy of Strauss' team is 5-10 big, "meaningful" games every year and one new big IP. They currently have 11 franchises that sell over 5 million units and 45 titles having sold over 2 million. Their back catalogue makes up 45% of their net revenue, which makes them less dependent on hits and insulates them from the uncertainty of that model. I think it was also Strauss who says he doesn't sweat seeing mid-tier companies like THQ go under or fewer physical releases every year, that they instead see that as an opportunity to invest more in different IPs. I know there's a lot of concern about the current physical AAA space. I'm not worried though, hearing how Take Two approaches the situation.
 
T

Tripon

Member
Obliterator said:
I think the tricky thing about VR is its so different no one really knows what "works".

Until we see some kind of breakthrough title that kind of defines the product I don't forsee a ton of support
Click to expand...

That, and I'm not sure companies have figured out what they can charge for a stand alone product. Can you charge $60 for a game? $20? Free to play model?

That's a lot of uncertainty at the moment.
 
F

FullMetalx117

Member
I really wish I didn't sell TTWO at $16 (bought at $8). Even now TTWO is probably undervalued at 2.91 Billion. GTA as a franchise alone could be worth $2 Billion (minecraft sold for $2.5B, but that's of course a different situation).
 
Q

QaaQer

Member
Bolivar687 said:
My two big takeaways:

1) Take Two stock has tripled over the last five years. It more or less tracked a software application index (is currently ahead of it) and has outperformed the S&P 500. This mirrors something Michael Pachter said on episode 2 of Pachter Factor on SIFTD. Investors are starting to see big gaming companies not just as risk/growth positions (although Take Two has certainly brought a return) but they're now putting money into these companies as they would other safe investments, as something that's going to generally track the rest of the market.

2) The strategy of Strauss' team is 5-10 big, "meaningful" games every year and one new big IP. They currently have 11 franchises that sell over 5 million units and 45 titles having sold over 2 million. Their back catalogue makes up 45% of their net revenue, which makes them less dependent on hits and insulates them from the uncertainty of that model. I think it was also Strauss who says he doesn't sweat seeing mid-tier companies like THQ go under or fewer physical releases every year, that they instead see that as an opportunity to invest more in different IPs. I know there's a lot of concern about the current physical AAA space. I'm not worried though, hearing how Take Two approaches the situation.
Click to expand...

My big take away is that they see themselves as an entertainment company, not a data driven gaming company looking to get people hooked like most top grossing mobile concerns. 'Delight the customer, then make money' is very much a Bethesda-like attitude. They aren't looking for those yellow spikes in the middle of the night. I think that is why console gaming will be around for a while yet.

On, and great OP.
 
S

Sulik2

Member
Take Two knows what they are doing. Seem way smarter about how to make money in the games industry then just about anyone else I see interviewed.
 
T

Tripon

Member
QaaQer said:
My big take away is that they see themselves as an entertainment company, not a data driven gaming company looking to get people hooked like most top grossing mobile concerns. 'Delight the customer, then make money' is very much a Bethesda-like attitude. They aren't looking for those yellow spikes in the middle of the night. I think that is why console gaming will be around for a while yet.

On, and great OP.
Click to expand...
It's a very Nintendo like attitude as well.
 
You must log in or register to reply here.

Similar threads

[Bloomberg] ‘Grand Theft Auto’ Maker Rockstar Games Asks Workers to Return to Office Five Days a Week
Game Dev 8 9 10 11 12
583
30K
StereoVsn replied
Palworld devs want to remain a small studio: “triple-A games are not for us”
Game Dev
10
791
Gideon replied
Bloomberg: Take-Two Bet $12 Billion on Zynga, Just as Mobile Games Tumbled
Game Dev
17
2K
ChuckeRearmed replied
Bloomberg: Sega Pulls Back From Blockchain Gaming as Crypto Winter Persists
8
1K
Spukc replied
Video Game Prices Are ‘Very, Very Low’ For What They Offer, Says GTA 6 Publisher Take-Two
2 3 4 5 6
255
12K
deriks replied
Top Bottom