Interview: Take-Two’s work in progress

2015 was not a big year for Take-Two.

There was multiplayer shooter Evolve in February, GTA V was released on PC in April and, of course, the annual big hitters of NBA and WWE. But outside of that, it was an unusually quiet year for the publisher.

And that’s a frustration for CEO Strauss Zelnick. The business is close to showing the level of consistency that has served EA, Activision and Ubisoft so well. From BioShock and Borderlands to GTA and Red Dead Redemption, Take-Two now has numerous blockbuster franchises to sit alongside its annual NBA and WWE games.

But not last year.

You are being very polite. Our holiday season last financial year was much more robust than our holiday season this year,” Zelnick tells us.

We aim to get to a point where our release schedule is strong every year. It is gratifying to be able to withstand and overcome ups and downs in the release schedule. But make no mistake about it, we’re utterly focused on bringing extraordinary franchises, plus new IP, to market on a regular basis, so that we have an interesting and diverse and powerful line-up year-in year-out. While we are a lot closer to that goal than we ever have been, it still remains a bit of a work-in-progress.”

"eSports is really just been a commercial opportunity
for League of Legends, and not much for anyone else."

Strauss Zelnick, Take-Two

Zelnick reminds us that Take-Two is an entertainment company, and like all creative businesses, things are never certain. Games get delayed, or even cancelled, and not everything works out all the time. He wants to tell us that there won’t be any more fallow years, but he just doesn’t know.

Not that it seems to matter, at least not according to the company’s financial reports: the phrase ‘better than expected results’ has been pretty much the catchphrase to the company’s financial year.

That’s down to Grand Theft Auto Online. The multiplayer mode to GTA V has consistently surprised Take-Two, and proven to be a headache for whoever is in charge of the company’s projections.

We’ve made no mystery of the fact that Grand Theft Auto Online continues to exceed expectations, and this holiday season was the best period ever, in terms of active users, consumer spending and the revenue from concurrent consumer spending. And that has a positive impact on our results,” explains Zelnick.

But we have other good results, as well. NBA 2K16 looks like it will be the most successful release in the history of the franchise. It has sold in over 6m units. We have also had a great result with WWE 2K16 and with Civilization. And of course with our catalogue sales, which is led by a number of titles, including Borderlands.

So the good news is pretty much across the board.”

Zelnick likes to remind everyone who will listen that Take-Two isn’t just ‘the GTA company’. But with 60m copies of Rockstar’s game sold into stores, you can understand the thinking.

A Rockstar game is noticeably missing from the firm’s current release slate, but 2016 is nonetheless a far stronger year for the firm. It has just launched XCOM 2, which has gained impressive review scores and has performed strongly with the PC strategy audience. Then there’s Battleborn, a new multiplayer IP from Borderlands creator Gearbox, which is scheduled for May 3rd. Finally, Mafia III is due sometime during 2016, and is from new studio Hangar 13, a team led by Star Wars writer Haden Blackman.

"We’ve made no mystery of the fact that Grand Theft Auto Online continues to exceed expectations, and this holiday season was the
best period ever, in terms of active users, consumer spending and
the revenue from concurrent consumer spending. And that has a
positive impact on our results."

Strauss Zelnick, Take-Two

But there’s more to Take-Two’s 2016 strategy than just releasing big games. The firm announced earlier this month a $250,000 eSports event for its NBA 2K16 franchise. It was news that came as a surprise to MCV.

When we spoke to Zelnick in October, he told us that although eSports has PR and marketing benefits, he didn’t view it as a commercial opportunity. And his position hasn’t changed.

It’s really just been a commercial opportunity for League of Legends, and not much for anyone else,” he says. We and everyone else is going: ‘Consumers love this, so is there a way to do something that supports the marketing of our titles, but will also engage consumers to create revenue and profit.’

So we are starting with our own tournament, which is based around a series of in-game events in NBA 2K16 and that will lead to a $250,000 grand prize tournament and a trip to the NBA finals.

It remains to be seen how that will work. It is our first foray and I think it will prove very interesting if nothing else, and most significantly we think it will delight consumers. And that’s the thing, if you delight consumers, the revenue and profitability will take care of itself.”

But what about launching its own eSports division, much like EA and Activision have?

We tend to focus more on the activity rather than the organisational structure,” explains Zelnick, adding: I suppose, we could have said we are launching an eSports division and its first activity is this in-game tournament for NBA 2K 16. But that’s not how we do things.”

With a number of new games, plus its eSports plans, 2016 is shaping up to be a far busier year for the teams at Take-Two. But could there be more? What about Red Dead Redemption 2? Or Ken Levine’s new project? Zelnick is tight lipped, but points towards E3 as an event to look forward to.

We will be there in a big way,” he concludes.

GLOBAL TAKEDOWN

An area of Take-Two’s business that is frequently talked about during its financial calls is its move into Asia, specifically the Chinese and Korean markets.

Western businesses trying to crack the East is nothing new, and there are countless examples of major publishers trying and failing to do so. So what makes Take-Two so different?

We have an Asian headquarters in Singapore and we are a publisher in Japan, which has served us very well, we have seen our sales increase dramatically by becoming a publisher there,” Take-Two CEO Zelnick explains.

Like our competitors, we have entered the Chinese market with our console titles. And we have the No.1 PC sports online game in China with NBA 2K Online, in December we had a record number of concurrent users of nearly 1.4m. We have made a big push into Asia, which we have done so judiciously. We have great partners in Tencent, XL and others, and we are cautiously optimistic about Civilization Online, although it is early to call it.

That part of the world is very important, and I think China is going to become more and more important, and not just for us but for the industry as a whole.”

And Zelnick has his eyes on other new markets, too.

There’s no question that interactive entertainment is still dominated by the very large territories you’re aware of: United States, Japan, United Kingdom.

But people love games the world over. And we certainly imagine more and more revenue coming out of Latin America, China, India Africa and other places, and the benefit of having a worldwide distribution footprint, which