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Annualized IP eventually cannibalizes sales, says Take-Two's Zelnick
Annualized IP eventually cannibalizes sales, says Take-Two's Zelnick
November 28, 2012 | By Mike Rose

November 28, 2012 | By Mike Rose
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    11 comments
More: Console/PC, Business/Marketing



"IP that is annualized eventually seems to hit the wall and we don't want our IP to hit the wall."
- Take-Two Interactive CEO Strauss Zelnick discusses the popularity of the Grand Theft Auto franchise, and how it won't be getting annual releases anytime soon.

The GTA series continues to sell in spades, as Zelnick this week revealed lifetime shipments of 125 million, up 11 million compared to the same time last year.

The franchise had shipped more than 114 million in September last year. Grand Theft Auto IV, released in 2008, has now also shipped 25 million units worldwide, up 3 million in the last year.

Zelnick puts this roaring success down to keeping away from annualized releases for the franchise. "It's our view that if you want intellectual properties to be permanent, then you run the risk in that circumstance of having consumers fall out of love with that franchise," he explained.

"[Activision] obviously views the world differently," he added, noting that Call of Duty: Black Ops II has not yet performed as well as last year's Call of Duty installment Modern Warfare 3.

"That's never been the case with one of ours. Ours do better each time," he continued. "Our view is it's hard to make permanent intellectual properties if you annualize it, with the exception of sports titles. So far that's proven to be the case."

Take-Two will be looking to carry this success into 2013, when Grand Theft Auto V is released for Xbox 360 and PlayStation 3. Some analysts are predicting that the game could sell 25 million copies in its first year.


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Comments


Jacob Alvarez
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Thank you Take-Two for being realistic about spacing your game releases. I agree that this reduces the cannibalization of previously released IP. I also feel that this provides more time to improve the next title in line and creates a higher quality game. I love Call of Duty, but that approach is fatiguing me, and I've noticed the lack of creativity from one title to the next, whereas the Grand Theft Auto series continually improves at a steady rate.

Rob Wright
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Two points here...

1) Why are people so bothered by annualized releases? I just don't understand the argument. If the demand is there fora new CoD title every year, and clearly Activision has demonstrated that there is, then what's the problem? I don't buy the idea that annual releases are somehow robbing the series of creativity and innovation. Go back and look at Modern Warfare 1 -- what exactly in terms of gameplay and mechanics was so innovative about that game? MW1 was about taking the military shooter genre and perfecting it with top-notch design, not overhauling it with new features. And MW1 looks a lot more like the original WWII titles in the series than the more recent releases.

2) I find Zelnick's comments a little disingenuous. First, from 2001 with GTA3 to 2009 with Liberty City episodes, Take Two released a major GTA title every yeard except 2003 and 2007. So sure, you don't have annualized releases....but you're not off much. I find it a little silly that Zelnick's trying to make it sound like he's so against saturating the market with GTA content. Yes, the last couple years have been quiet, but man, just look at the release schedule before that. Plus, GTA 4 was released in 2008 and hit 25 million copies sold this year. Okay, fine -- but Black Ops 1 was released in 2010 and hit 25 million copies in less than a year. So there you have it. Maybe Zelnick has been tired of analysts and media members asking where GTA V is and why didn't Take Two release it sooner, and he felt like lobbing a few grenades at Activision. And who knows, maybe an annual GTA game wouldn't have the same success as a CoD titles (different genres, less focus on MP, more content, etc.). But to me his logic here just seems way off.

Luis Guimaraes
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Annualized releases call for games designer not to to be worth playing multiple times or for a long period. All the game is made around novelty and hype.

CoD works this way because it's single player is a very linear experience and it's multiplayer is based on leveling-up your account.

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Rob Graeber
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It may be true that annualized IP eventually canabalizes sales. But the real question is which method will allow you to milk the most value out of an IP.

IE, money has a time value, and the present value of annualized IP over 8 years could be greater than non-annualized IP over 15 years. Assuming the same number of releases and no risk of IP becoming irrevelant due to outside factors.

Michael Joseph
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Milking value from an IP? You are likely just stating a fact about how many folks conduct business, still I find there's something very twisted about that statement.

Perhaps it's because it sounds so unabashedly self serving and promoting of an "ends justify the means" way of life that I find it so surreal to hear phrases like that uttered at all.

Capitalism is the new golden rule and has touched every part of us... mind, body and soul. When we speak we promote and reaffirm it to one another without ever realizing the extent to which this religion has permeated us.

Maria Jayne
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I want to believe this is true, it seems more respectful and logical, but then I see ActiBlizz still announcing annual "Call Of Dooty" and selling millions.

It's to the point now where I hope to read news of ActiBlizz failing miserably....and I'm normally such a reasonable person!

I guess it boils down to beat it dead and take your wheelbarrows full of cash to the bank or invest in an IP people will want in the future too. As an investor looking for a return, I can't fault the beating it dead strategy, you just have to know when to take your money and run.

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k s
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In the case of "Call of Dooty", teenagers are easily taken advantage of. They more then any other demographic cave to consumerism. Adults have more self control and can more easily see past the deception and young children do have very much money to waste.

I never really got the whole CoD thing but I was already in my mid twenties when it became popular and never really was a big fan of online multiplayer to begin with.

Harlan Sumgui
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[quote=ks]teenagers are easily taken advantage of[/quote]

so true, whole industries rely on that. & it is effective because they cannot see it.

Pieterjan Spoelders
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I wouldn't be surprised if they invest more in marketing than developing the actual call of duty game.


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