Take-Two Talks Cross-Platform Support, Streaming and Subscriptions

Some companies believe that subscriptions and streaming could change the video game industry, but there are some -- like Take-Two CEO Strauss Zelnick -- that believe otherwise.

Per this report from GamesIndustry International, Zelnick explained while there is room for growth with subscriptions and streaming, it won't necessarily change how the company does business with games like NBA 2K19 and the forthcoming Red Dead Redemption 2.

"I think streaming will happen," he explained. "There are numerous companies that are looking at it. The companies that are best positioned to pursue streaming are technology companies that have hyperscale data centers all around the world. So you know what that means; There aren't very many of those because you do have to address latency, and you do have to be pretty close to where the consumer is in order to address latency. Do I think that will happen? I'm sure it will happen. I think that will happen in one to three years.

"Does it increase the total addressable market? Naturally, it does, because you don't need to buy a box in order to play our games. You'll probably need to buy a controller, and those will be available."

But then he explained how Take-Two will keep on marching to its own beat. "Our job is to be where the consumer is, so more, better, faster, cheaper distribution -- as long as its high quality -- is always good for us, because it's good for the consumer," Zelnick explained. "And generally speaking, when you make a product more widely available, more people consume it. But I can't sit here and argue it will be a sea change in the business. I know one of our competitors has argued that, but my view is we should really talk about what we can control, which is making really great content. And probably leave stuff that we can't control--massive hyperscale distribution systems--to other people, except to make the point that if they're there, we'll be there. It's the same way that if someone wanted to open a video game store next to GameStop, we'd sell to them tomorrow."

As for subscriptions, Zelnick noted, "I don't think the answer is each company for each title has a subscription business and that's transformative. I'm not even sure the subscription model applies to our business. It certainly doesn't apply to frontline products. Could it apply to catalog products? Yeah, it probably could. Would it? Sure. Would we participate in businesses like that? Yes. Will we have one of our own? Eh, probably not.

"But none of this is a game changer. You know why? Because if there's an opportunity to go direct to consumer, no one can go direct to consumer with our products. Only we can. We have the opposite of fungible products in this business. So if we're asleep at the switch--and I certainly hope we don't come across that way--but if we were, and all of our competitors go develop direct relationships, as long as we keep making titles that are as good as Grand Theft Auto and NBA 2K and others, we'll have a direct relationship like that as well. Worst case scenario, we'll be a few months behind our competitors because we just were too sleepy to do it.

"So there's no competitive advantage to be gained in distribution when you're in the content business. It does not exist. It is not a meaningful long-term competitive advantage to control distribution of any sort. Therefore, arguing about whether subscription exists or how you take advantage of it... it's kind of irrelevant. Because it's going to be, or won't be, a rising tide that will affect all of us. And if it is, great, wonderful, we'll all be there. And if it isn't, it's not going to change anything."

Finally, he discussed the potential of cross-platform play and believes it's on the rise, despite Sony's objections to such an idea. "Eventually, I think we'll be in a cross-platform world for a lot of titles," Zelnick added. "Certainly, between console and PC we will. Microsoft is basically already there. So I think the walls are coming down. The closed system walls are coming down, and they have to. Streaming is going to accelerate those walls coming down.

"We're all here for the consumers. If you're going to create rules that don't benefit the consumers but somehow you think benefit your enterprise, you're mistaken. Consumers will go elsewhere. You have to pay attention to what the consumer wants."

We'll see how Take-Two fares, with NBA 2K19 making its debut on the market recently and Red Dead Redemption 2 nearing release on October 26.

(Hat tip to GamesIndustry International for the details!)