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Take-Two Believes Traditional DLCs Are Still Compelling, But Games Need to Be Great to Begin With

Executives of the publisher behind Red Dead Redemption and Grand Theft Auto talk about business models, DLC, quality, and subscriptions.

May 30, 2018

During a panel from the Cowen and Company 46th Annual Technology, Media & Telecom Conference Take-Two president Karl Slatoff and Chief Financial Officers had some interesting insight to share mostly on the company’s business models

First of all, we learn that at Rockstar, the Grand Theft Auto Online team and the Red Dead Redemption 2 team are completely independent of each other and sufficiently-staffed, meaning that the decision-making for the two games is completely separate.

Despite the success of Grand Theft Auto Online, and speaking in general terms (independently from the unannounced plans for Red Dead Redemption 2 or Rockstar), Slatoff mentioned that Take-Two still sees the traditional DLC model (as opposed to the “Online” model) as interesting, but it depends on a game-by-game basis whether it makes sense or not. It’s a “very lucrative model” for the company and “very compelling” for consumers, as it allows them to continue to engage with games in the way they’re used to.

Goldsteen added later in the presentation that nowadays games may take longer to release because it’s very important to release them when they’re at the highest quality so that they can perform the best that they can. This is especially true with recurring consumer spending opportunities (IE: DLCs and microtransactions), because if a publisher wants consumers to stay engaged with a game, it has to come out and be something that everyone wants to begin with, and then continue to want to play down the line.

The publisher has been a little “resource-constrained” in terms of having many IPs and not too many developers to work on them. For that reason, they have been making an effort to increase their development resources. In October 2007 they had 1,200 developers, while at the end of the past fiscal year the development workforce was at 3,300.

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Slatoff added that Take-Two does not cut features from its games in order to make it in time for release. They would rather delay a game to make sure that it’s feature-complete, or even richer than anticipated. It’s important to make each game “more ground-breaking” than the last one.

He also mentioned that Take-Two does think about subscription business models, and he doesn’t believe that gaming has anything specific that precludes subscription models from working. Yet, the model needs to work for everyone involved, publishers, platform holders, and consumers. Figuring that out is the trick and an “art form of its own.” He doesn’t know if there is a model today that can accomplish it. That being said, “never say never.” The possibility is in Take-Two’s minds (even if it if doesn’t get “a lot of mindshare” for now), and they have people doing the math, making sure that when and if they engage in a subscription model, it “grows the entire pie” on top of Take-Two’s slice of the pie. Ultimately the most important thing is to develop games and franchises, because without that the model doesn’t matter.

“Overdelivery on content drives engagement and the economics take care of themselves.”

Speaking of delays, the publisher recently delayed a “highly anticipated” game to the next fiscal year, widely believed to be the next Borderlands.

In the meanwhile, if you want to pre-order Red Dead Redemption 2, you can do so on Amazon.

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Giuseppe Nelva

Hailing from sunny (not as much as people think) Italy and long standing gamer since the age of Mattel Intellivision and Sinclair ZX Spectrum. Definitely a multi-platform gamer, he still holds the old dear PC nearest to his heart, while not disregarding any console on the market. RPGs (of any nationality) and MMORPGs are his daily bread, but he enjoys almost every other genre, prominently racing simulators, action and sandbox games. He is also one of the few surviving fans of the flight simulator genre on Earth.

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