2K Games owner Take-Two held its latest earnings call yesterday, and in one of the questions that was posed to the company, chairman and chief executive officer Strauss Zelnick was asked about how Take-Two feels about subscription models (which incorporates the likes of Xbox Game Pass) from a business perspective.
In response, Zelnick advised that "our views remain unchanged" on the matter, and the company believes "a subscription model can make sense for deep catalog titles, but it doesn't really make sense for frontline titles". He explained that "for any business model that makes sense in the entertainment business, it has to work for the creators of the entertainment as well as the consumers of the entertainment."
"I think catalog can make sense for the publishers. It could make sense for consumers who are avid who really want access to a lot of product. But if you're getting into front-line product, then the economics are much more difficult to make sense of. And remember, consumers who are involved with interactive entertainment have different consumption patterns than those involved with linear entertainment.
Linear entertainment consumers consume something like 150 hours of programming a month. That's probably well over 100 different titles. In the case of interactive entertainment, consumers are consuming something like 45 hours a month, and that may be one, two, three, four titles, but it's certainly not 100 titles. So from a consumer point of view, it's not clear that a subscription model really makes sense for the bulk of consumers."
2K's Grand Theft Auto V is an example of a game under the Take-Two banner which is leaving Xbox Game Pass this month after just a short period on the service, most likely due to the game becoming a "frontline" title once more following the release of its enhanced edition for Xbox Series X and Xbox Series S later this year.
That said, Take-Two has included frontline titles on Game Pass such as NBA 2K21, so it's not a hard rule.
"We're open-minded. We have made catalog titles available for subscription services. Very occasionally, we've made frontline titles available as well. But we do see this more as a catalog offering than a front-line offering."
Do you agree with Take-Two on this? Give us your thoughts down in the comments below.
[source fool.com]
Comments 10
I agree 100%. Frontline titles such as RDR or GTA come out once in a gaming generation so Game Pass naturally doesn't make sense for them. I'm only interested in RDR anyway so I don't care (unless Max Payne suddenly reappears).
However, if Game Pass keeps growing it remains to be seen if they change their stance on this.
That's understandable from an 'outsiders' perspective where the deal to release their titles on anothers subscription model platform has to make sense to them.
It may not make as much sense to Take-Two, EA etc to release their flagship titles to MS's Game Pass as it does for MS's own developed flagship games. You have to remember that MS will take 'some' cut from other Publishers - inc from 'Sales' of those titles on their platform.
The system has to make 'business' sense to the Publisher - whether its in their 'best' interest to reach as many people as possible or maximise profit margins. Its clear that GTA isn't going to struggle to sell and still continues to sell today so sacrificing a 'bit' of profit to reach more isn't necessarily 'right' for Take-Two...
Its always going to come down to what these companies think is going to be the 'best' option for them at the time. It may not make sense for these companies to put their flagship IP's on a Subscription service Day and Date 'today', but that doesn't mean that it won't make sense tomorrow. Also, if they feel they aren't reaching 'enough' people with sales alone, they can opt in to the Game Pass model later in the life cycle.
MS own their Studios, are the Publisher, the Platform holder and 'retailer' (at least Digitally) so get 'Maximum' profits on their own titles.
Take-Two are often 'just' the Publisher and negotiated a 'deal' with the Studio who also wants a cut from profits. Closed Platform (Consoles) holders also take a cut for Licensing and trademark usage and also can take a cut of the profits as the 'retailer' too.
If you are only getting a 'small' slice of the Profits because you are just the Publisher, its going to take a lot more 'sales' to cover your costs before you even turn a profit.
Please can they make a RDR 3 in this decade.
Give me a max Payne trilogy HD remaster, in the gta or rdr 2 game engine.
Gamepass ain't for all games and never will be. Nothing wrong with that.
Honestly, outside of MS games I'm pretty sceptical of big games that debut on the service. Sure, sometimes it's obvious MS has just thrown big money at a great game like The Show 2021 to make a splash but when I see a supposed AAA announce it's launching on the service I set my expectations to "Outriders".
Who am I to say what works for Take Two? If they say that putting their games on Gamepass isn’t in their best interest, financially, I’m inclined to believe them.
Lol it’s obvious if a new game is actually worth buying and playing it won’t start on a game subscription service. The gaming industry is about nothing but profits anyway. Game pass is like Netflix a place to scroll hoping to find something worth the subscription but in the end being dissatisfied overall. There may be a couple of titles to keep you interested for a short time but drowning in b titles leaves you wishing for more. I never ever preorder anymore or subscribe to subscription services unless the game being added is worth my time. The entire industry has left a sour taste because of repeated shoddy unethical practices at the expense of the consumers.
Good for him he has an opinion, just like everyone else outside GPU, sadly the only opinion that matter are those behind the sub.
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