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Take-Two CEO: Subscriptions not a 'foregone conclusion' for game industry

Take-Two CEO: Subscriptions not a 'foregone conclusion' for game industry

May 14, 2019 | By Alissa McAloon

"We're open-minded. We want to be where the customer is. But I don't think it's a foregone conclusion that subscription will be as massive for interactive entertainment."

- Zelnick shares his thoughts on how subscription services will impact video games.

Take-Two Interactive CEO Strauss Zelnick is keeping an eye on the rise of game subscription services but isn’t fully convinced the model will have the same impact on games as it did on music and movies.

Zelnick lightly discussed both subscription services and Google’s coming Stadia game streaming service in a call with investors this week, sharing his thoughts on some of the barriers the tech has to overcome in the process.

Overall he does share some of the optimism many others do toward both trends, noting that the company is “a believer in streaming services.” On the other side, however, he says Take-Two needs to ensure the business model makes sense for its properties and that's something that is less apparent at this point in time. 

“You need to find that intersection in business models that serve the customer successfully and also serve everyone else who participates in the value chain. And that may prove to be a little challenging for subscriptions in the space because I think people do consume video games differently than they consume linear entertainment.”

That difference leads to shifts in the “all you can eat” subscription model, as far as games are concerned. He says the average American household spends 150 hours a month watching movies and shows and only about 45 hours a month on interactive experiences like video games. But those hours spent on linear entertainment are spread across dozens of different shows and films, while that 45 hours spent on games are likely to be only one to three titles.

“And so in that event, if you play one, two, or three titles, and you play them for months in a row, which often happens in our world, then a subscription model may not be such a great deal for the customer,” says Zelnick. “So, this all remains to be seen."

"And again, we're open-minded. We want to be where the customer is. But I don't think it's a foregone conclusion that subscription will be as massive for interactive entertainment as it has proven to be for music, and motion pictures, and television, but we’ll see."

On just Stadia, Google’s instant-play cloud-based game platform, Zelnick says the concept is “compelling, if that can be delivered.”

“We're very optimistic about the notion of streaming technology, bringing our titles to consumers who currently don't have access to them,” said Zelnick. “And the promise of being able to sign on to a service, with virtually no barriers, without a box in between, and being able to play our games on any device whatsoever around the world, and to do it with low latency? Well, that's very compelling, if that can be delivered. And the folks at Google minimally have said it will be delivered and will be delivered in relatively short order.”

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