Red Dead Redemption 2 Publisher Argues Loot Boxes are Not Gambling; “Overdelivering” Is Key
Take-Two President Karl Slatoff talks about loot boxes, recurring revenues and the importance of overdelivering on the initial release of games.
During a presentation for investors at the Credit Suisse 21st Annual Technology conference on Scottsdale, Arizona, Take-two President Karl Slatoff was asked to comment on the controversy regarding loot boxes and microtransactions.
Slatoff stated that Take-Two does not see that sort of thing as gambling, and their view is aligned to that of the ESA. That being said, it’s worth mentioning that Slatoff did not mention one way or the other any intention of using the feature in future games.
In terms of the reaction from consumers, Slatoff explained that for him the issue is all about content, and about “overdelivering” on it and on making sure that the focus is on engagement. He also added that “as long as you keep your eyes on that ball you’re gonna be ok, because the consumer is going to be really happy with what they get.” We also hear that Slatoff feels that companies can’t force consumers to buy something, but they can try do their best to create the best experience they possibly can to drive engagement, and driving engagement creates value in entertainment franchises, “that’s how it’s been and how it always will be.”
Earlier in the presentation, Slatoff was asked to talk about the situation of unlocking the opportunity of recurring consumer spending. He stressed the importance of delivering the best possible experience to the consumer, with the goal being driving deeper engagement with the games for a very long period of time. Overdelivering on the initial release is key to achieve that, followed by providing the additional content that the consumer really wants.
This isn’t a new concept for Take-Two, as they have done this with expansion packs for Civilization in the nineties. That being said, Slatoff mentioned that they’re still in an early exploratory phase with recurring revenues because the publisher is still “getting to know the consumer,” which changes every year. Now there are analytical tools that allow to do that in real time and to deliver the experience that consumers want.
Slatoff concluded that the publisher is getting better at that, but there is still a lot that they can learn.
Earlier this month, Chief Executive Officer Strauss Zelnick mentioned that the Take-Two is “concerned about any perception and any negative feedback” related to microtransactions, and they’ll focus on “take it really seriously.” That being said, the publisher intends to have recurrent consumer spending in every title released from now on. That’s not so surprising considering all the money they’re making with Grand Theft Auto Online.