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‘Big Tentpole Releases Should Not Be Annualized,’ Says Take-Two’s Zelnick
On the company’s fiscal third quarter earnings call this afternoon, Take-Two CEO Strauss Zelnick offered thoughts about his company’s success. Of note was a recommitment to avoiding the annualization trend that is prevalent among publishers.
“I don’t think we think about pacing in a traditional way,” he says. “We have said that we think big tentpole releases should not be annualized except for sports titles.”
Right now, Take-Two has two annualized sports games: NBA 2K and WWE 2K. The company’s other major franchises, including Civilization, Borderlands, and Rockstar’s titles are on a longer lead.
“We think it’s valuable to build anticipation and because it takes some time to make the highest quality products in the business,” Zelnick explained. “We bring the titles to market when they are ready to be marketed.”
The company also took questions about some of its upcoming titles, including next week’s release of Evolve. As we’ve covered, Evolve’s DLC strategy is a bit confusing, with a number of different options for bonuses related to pre-ordering and pre-purchasing, as well as a season pass.
“There was some controversy stirred up by an online post,” Zelnick says. “I guess controversy, generally speaking, is a good thing. People can argue about the business model. I think we’re delivering a fantastic title well worth what consumers will pay for it.”
With Evolve winning game of show at E3 and Gamescom in 2014, Take-Two is confident, but not considering success a guarantee. “We’ll wait until consumers tell us what they think,” he says. “All body parts are crossed around here.”
Take-Two also responded to a question about last-generation titles. Publishers, including Activision and Ubisoft, have commented that Xbox 360 and PlayStation 3 software sales have slowed.
“In terms of old-gen products, we’re still seeing robust demand for legacy-gen products,” says company president Karl Slatoff. “We have heard of anecdotes of people having difficulty selling through, but we’re not experiencing that.”
Our Take
Take-Two is feeling extremely confident, and is still riding high on the success of Grand Theft Auto V. The company has two strong, though flawed, sports titles on which to rely annually. It also has almost guaranteed revenue related to the Borderlands Handsome Collection and GTA V coming before the end of the fiscal year.
Zelnick says he projects profitability in the next fiscal year and beyond. If Take-Two can continue to deliver that without resorting to non-sports annualization, it will be something to crow about indeed.
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