Yesterday at the Goldman Sachs Communacopia Conference, Take-Two Interactive’s CEO Strauss Zelnick told investors that the upcoming next-generation consoles from Sony and Microsoft won’t affect development costs in a significantly negative way. Take-Two is the parent company of Rockstar Games, 2K, and Private Division. Overall, Zelnick paints a picture of a prepared Take-Two, ready to take advantage of the new hardware’s potential.
Zelnick provided an explanation for why Take-Two is positive that the next generation consoles can only spell success for development teams. “We don’t really expect material cost changes with the generation,” Zelnick said. “Every time we have new technology which allows us to do more, developers want to do more and that can cost a bit more. But our current expectations are not that you’ll see a cost spike. The days of the sine curve waxing and waning in the interactive entertainment business around hardware cycles… those are long gone. The transition from last gen to current gen was not taxing for us, or for the industry.”
It’s really the first time the industry’s gone through one of these transitions without someone going bankrupt.
Take-Two’s Zelnick also spoke about the changing gaming environment, specifically referring to more and more people opting to play their games on PC platforms. “The world has changed. When we consider a console release, the PC format can be 40% or 50% now of that revenue. Ten years ago, that number was 1% or 2%. Clearly, the world is changing. A previously closed system is indeed turning into an open system. That means hardware is going to look more like hardware and less like hardware taxing software, which is great news for us.”
I think it creates real opportunity, and we don’t see it having any negative influence whatsoever on our business, or our catalog.
Zelnick is clear that Take-Two sees the benefits of the next wave of gaming technology as a means to inspire their developers “to be more creative and push the envelope more,” which is a net positive for the publisher, developers, and the consumer.
Microsoft is planning to release their next-generation console Project Scarlett, successor to the Xbox One, during the Holiday 2020 season along with their mainstay title Halo Infinite. Sony’s been rather quiet on the PlayStation 5 and has not set a release window, but it’s widely speculated that it will release in time to give Microsoft’s new offering some friendly competition.