Take-Two CEO: “Our Competitors Burn Off their Franchises;” Talks about Possible Acquisitions

Take-Two CEO: “Our Competitors Burn Off their Franchises;” Talks about Possible Acquisitions

During the MKM Partners Entertainment, Leisure and Internet Conference, Take-Two Interactive Software Chief Executive Officer Strauss Zelnick talked about the possibility of annualizing the publisher’s franchises, and how it would require making compromises.

I suppose, conceptually, if we took all that and we turned it into an annualized schedule, conceptually, leaving everything else to the side, the math says you would be in a better place, but what would it imply?

It would imply doubling our development teams, it would imply calling into question our quality, and it would imply the risk the consumers tire of these franchises.

Zelnick also implied that not having annual releases helps the franchises stay beloved and permanent, while Take-two competitors burn off theirs.

One of the things that’s best about Take-two is that our franchises seem to be permanent. They are beloved and permanent. Whereas our competitors burn off their franchises, which means they need to create new ones, which is incredibly difficult to do.

We also create new ones, but if we continue to do so — and so far I think except for one year, we launched at least one successful new IP — If we continue to do that we reach a point in which we can have a really powerful release schedule without burning off the IP, and that’s our goal.

Zelnick also alluded to a”big competitor” that has done a lot of M&A (Mergers and Acquisitions), “burning” about 20 million dollars in market capital in doing so. Yet the new leadership has done a great job (and he basically revealed that the competitor is Electronic Arts, by naming its CEO “Andrew” Wilson), but according to Zelnick, most corporate M&A fail. They’re “driven by ego and empire building and a complete lack of awareness of simple mathematics.”

On the other hand, take-two is very disciplined. They think that there are some opportunities and hope to avail themselves of some, but Zelnick promised that they will be “creative opportunities,” and almost certainly “immediate creative opportunities.”

Zelnick then explained that the company continues growing its development teams, which is a bottleneck for them and for the industry because finding great talent is hard. That said, everyone is busy at take-two, no money is wasted, and the company is always active.