Oh boy, here we go again! Much like Sony's recent comments on day one subscription service releases, Take-Two CEO Strauss Zelnick believes launching "frontline titles" day and date doesn't make sense from a business perspective.
As part of Take-Two's recent quarterly earnings report, Zelnick discussed subscriptions like Xbox Game Pass and PS Plus, questioning whether the choice to launch first-party games day one on these services is the right call. Specifically, Zelnick was responding to a question about Xbox Game Pass potentially "nearing saturation" on console, following Phil Spencer's comments that XGP console growth has been slowing down recently.
"I think the second area of skepticism was whether it made sense, and this is a rhetorical question because I think the answer is no, to offer frontline titles day and date with titles on a subscription service. I don't think that ever made sense."
"I still don't think it makes sense. And I believe that it's now becoming obvious that it doesn't make sense. It's just a lost opportunity for the publisher. So, I wouldn't want to speak for my friend, Phil [Spencer], but our views remain unchanged."
This isn't the first time the Take-Two boss has talked this way about Xbox Game Pass, also stating back in 2021 that the service didn't make sense for frontline titles, despite acknowledging that the company had still occasionally added frontline titles to the service (but usually not until months after launch).
We'll likely never know all the nitty gritty business details behind Xbox Game Pass; no company is ever that forward with its behind-the-scenes dealings! On the face of it the model seems to be working though, and we can't see Xbox changing its Game Pass approach anytime soon. Don't expect many day and date launches from Take-Two, though.
Here's more of what Zelnick had to say on the matter:
"There probably is a subscription business. It's a catalog business. It's probably best aimed at very avid consumers because those are the consumers who are interested in playing catalog titles, implying a whole bunch of different titles in a given month. But I don't think it's a mass market service that supplants the interactive entertainment business as we know it at all. And I don't think there's any evidence to the contrary so far."
What do you make of these Take-Two comments? Leave your thoughts down below!
[source take2games.com, via fool.com]
Comments 46
Yeh why bother putting games day one on game pass when u have suckers that will pay top price for games you remake so bad that the ppl who play it will prefer the old versions ...which u took off sale so they don't have any other choice but to buy Ur messed up remakes
For most 3rd party publishers it doesn’t make sense with their big AAA money making games, especially if they are single player focused. People aren’t gonna want to hear this but it’s the truth. The only reason Xbox is able to maintain this is cause Microsoft makes money in other areas. Some games, in particular multiplayer games yes it makes sense but for a lot of 3rd party games it doesn’t.
Different companies, different models. It's not one size fits all.
For a publisher like Take-Two that largely makes AAA games that sell millions of copies across a wide range of titles a subscription model is likely not going to be a good fit.
However for a platform holder, who is also a publisher, like Xbox that is trying to pull users to it's platforms then it makes a lot more sense.
Tale Two's business model is essentially to resell the same game to their gullible customers for $70 a pop, so I'm not sure they were the right people to ask about Game Pass in the first place. That being said, 2023 is likely to make or break Game Pass, and maybe the long term future of Xbox. If they don't (finally) manage to put some compelling first party content on the service, it's probably over. Yes i know they've announced a bunch of stuff, and to their credit nobody is better at announcing games than Microsoft, but I'm talking about DELIVERING games...
To be honest, he's not wrong. Theoretically GP is getting big AAA releases day one, but that has not been happening in reality. Advertising aside, that is not the applied model for now. (feel free to hate, I'm just calling it like my backlog looks)
I’m not surprised Take Two has this stance and for them it makes sense of course, their games will sell regardless, it’ll apply for other giants of the industry too.
It makes sense for smaller devs who can gain some financial security for day one releases on Gamepass though and gives their game visibility to millions of subscribers. As well as first party Xbox games, which admittedly we need to start seeing more of on the service.
This is the reason why Sony won't do it, because there smart enough to know this.
Devils advocate: take two only makes a few IPs that sell like crazy and makes no smaller releases. As a third party, Microsoft would have to pay them ridiculous amounts of money for it to be justified for them for the titles to be on game pass day one, and even then, they would always insist they lost potential sales if GP grows thanks to such an addition, therefore it would have to be a ton of money and extra money for each download. If MS paid per-download fees for something like GTA 6, it’s likely they could potentially stop being profitable rather quickly, at least for a quarter.
It makes perfect sense for Microsoft itself to put high profile titles in the service because they get the bulk of the subscription revenue. Smaller Double A titles like Plague Tale sales performance was never likely high enough that Microsoft would see a big hit by paying for it, even if they paid per-download.
First party titles being on subscription service day one, though, adds a lot of value to the service, boosting subscription numbers significantly.
@Snake_V5 Facts companies that make quality AAA games don't need to do this.
@Doublecell Exactly, there games are too good to just throw on a subscription service. And if throwing them on a subscription service diminishes quality like they have said already, I'm sure most people don't want that.
Now flipping on my previous post: PlayStation Studios The Show is currently #31 on Xbox most played game list, and the deal has not cost either company money in a way that either didn’t decide to do the deal for a second year in a row. So I guess even hotly popular PlayStation Studios games can benefit everyone involved by hitting subscription service day one even as a third party.
@Snake_V5 yea, The Show is too good to throw into a subscription service day one!
Take two aren't selling consoles though, as the main reason to get an xbox console is for gamepass. So Microsoft need to make gamepass as lucrative as possible by including day one titles
It’s impossible to know what effect Day 1 releases have since Xbox hasn’t tried it yet. I’m sorry, but someone has to say it. Let’s see if a good release schedule of Day 1 exclusives and legitimately new games has an impact. I’m sure Halo/Forza spiked subs, but MS hasn’t had a mammoth title in a while to make an argument. Let’s be honest: Pentiment isn’t the big exclusive to pour gasoline on the Gamepass fire. Starfield will be an indicator.
Well duh lol... Yep that's all
To use their own game, the NBA 2K is partly designed to make more money after the user purchases it. Depending on how you play it, it is loaded with microtransactions. If you up the user base, you have more chances to get that money. The Show has seen this to be the case.
Other games without these microtransactions, of course it doesn't make sense.
Giving value to the consumer doesn't fit their greedy culture.
Don't really like Take Two games for the most part so doesn't worry me - GTA3 was mindblowing to me as a teenager but the rest didn't grab me the same (4 and Vice City were OK), but I find GTA5 and Red Dead boring and Online is just a cash grab...
Mafia, Max Payne, Bioshock and Civ are the only other games I really like from their stable, and most of those haven't had a new game in a while (or at least not a particularly innovative one, in the case of Civ)
@Tharsman It's not good and that's why it was thrown on there.
Regardless of what you think of Sony's games, they are best in class at making this particular style of movie games that PlayStation fans love. The same can be said for Nintendo when it comes to them releasing games their fans love. Microsoft has left Xbox fans out to dry with mediocre game after mediocre game...(w/ the exception of Forza)
I personally don't think any Xbox fan being honest can actually say they have been satisfied with Microsoft's output this generation and the later half of last generation, especially compared to what Sony and Nintendo have delivered.
Different situation for Take Two who rely solely on Game Sales for their revenue to recuperate their costs of development, marketing etc. They are a very Sales focused business so it perhaps doesn't make sense for them at all to 'give away' their games at their most 'lucrative' - which is generally the first few months of release.
If you want to maximising your Sales, you don't put your games into a Subscription Service - especially not someone elses service who will 'benefit' from increased Subscriptions whilst you lose out on 'sales' revenue. It doesn't make sense for Sony either who want you to buy their $70 games on Playstation hardware and only when sales have dropped 'significantly', then put it in a Sub service or release on PC...
MS are not so reliant on Sales of their 'own' hardware as their software is available on virtually every device (except Switch/Playstation hardware). Its 'sold' on Console/PC so still get 'sales' revenue, but also get revenue from all the 'other' platforms Game Pass can reach. On top of that, they get revenue from every 'Take-two' (or other Publishers) game sold on their Console system, more if its bought through their store as they get 30% retailer profit.
MS are NOT like Take-Two, EA, Ubisoft etc who rely on game sales to make their money to invest in Games. It really only benefits those games where high player counts matter more than sales - big Online games for example as low player counts negatively impact on the 'game' itself - that doesn't happen with mostly SP games.
Point is, its NOT going to make Sense to any Sales driven business but MS are more Service driven and for them, it makes much more sense to put their games into a Sub service - anyone who doesn't want to Subscribe can still 'buy' the game in the traditional way and many of those that Subscribe too can buy as well so they benefit from those sales but also from increasing Subscribers in their ecosystem.
If you buy a Take Two game on Xbox/PS MS/Sony make money from that and you are in their 'ecosystem' spending time and money so it doesn't benefit Take Two to give their games away and lose 'sales' as a result.
This has always been a no brainer for me. If you make AAA titles why would you put them on sub service that instantly devalues your work? For small studios that wouldn't get the exposure otherwise, you can see a benefit. But absolutely not for AAA titles from a publisher like Take Two. Its common sense and always has been.
In my opinion Playstation exclusives are absolutely the best games. Game like The Last of Us 1 an 2, God of War, Uncharted 4, Ghost of Tsushima, Spiderman an Miles, Days Gone, etc, all mind blowing games. A big reason for this is huge investment. These game aren’t on PS+ day one as they often sell 20+ million copies. Spiderman an Miles is at about 34 million copies sold. If they were day 1 PS+ Sony would take a huge hit, less money earned means less money invested. It’s great that AAA Xbox games come to Game Pass day 1 but if they didn’t an it meant Xbox exclusives matched the quality of PS exclusives i’d be fine with that.
It doesn't have to make sense to him, it just has to make sense to Microsoft and it's customers.
@jordan1992 In your opinion is the key here. I played every game you mentioned. Didn't like The Last of Us 1 or 2, didn't like God of War at all, thought it was much too long, Ghosts, Spider Man, Days Gone and Death Stranding kept my attention for about an hour. Although I think Uncharted 2 and 4 are two of the best games I have ever played - that's only two games. Like you, this is just my opinion. Meanwhile, Forza and Halo Infinite were also two of the best games I've ever played. All subjective.
Does he make important decisions for Microsoft ??? No ??? Then his opinion is as important as my opinion is...
R* used to be creative and make games. Now they make money selling the same game every generation. As a company they make lots of dinero. As a gamer, I used to respect them as devs because I liked & played their games.
If I'm lucky maybe I get to see 3 more games (sequels) & probably 0 new IP's, in my life time. Glad people enjoy GTA Online but I rather spend my money on various other things.
@Romans12 Forza is great but it’s a driving game, can’t really compare it. Saying Halo Infinite is the best game you ever played tells me you’re an Xbox fan. It’s average at best. It flopped!! An like i said, yes an opinion is subjective but 20 odd million opinions makes it a decent shout.
This guy is just a suit, he only cares about greed.
@armondo36 Make or break lol, you just be smoking that Mt Ranier weed. Gamepass ain't going anywhere for the foreseeable future. It's about to hit TVs VR headsets and likely other platforms. If Sonys lame PS plus whatever is still making money, Gamepass is going to stay the GOAT of console gaming services.
@c1979h how can it hit VR headsets? Xbox don’t do VR. There are zero VR games on Game Pass.
why are they asking what a company the size of take two think about gamepass? there are small indie developers who LOVE gamepass and appreciate how easy it is to work with the MS team.
@jordan1992 because soon you will b able to pair a Xbox controller to a quest and play game pass games just like u can do now with Ur phone , you can technically do it now but it's not supported yet by Microsoft
GP's millions of subscribers would probably disagree.
To be fair, Take Two has a point from the narrow idea of only "selling" games. I'd argue they should clean their own house before pointing at others.
Brand recognition, loyalty, and even a broader customer base can and is encouraged by GP. Nothing pisses me off more than buying a "top" game and discovering it's crap. In GP, I might be willing to try a game form a dev that I felt burned by previously. Not so if I have to always buy the game. And the idea that cost is the sole decider of quality is so outdated as to be funny. As games go all digital, reviving or finding renewed life after release will be a lot harder for games moving forward. Selling for the sake of a sale may not be enough to keep companies in business in the future. I 've certainly discovered a plethora of games I'd never have purchased or even played without game pass. Some games I bought after they left GP because I wanted to keep playing them.
Frankly, when Take Two stops regurgitating content I might value their opinion more. Yeah, the idea of a profit driven model with no other considerations might not be the best choice for GP. Luckily for gamers, not every company agrees.
@c1979h not male or break as in going out of business, more in terms of public confidence, which will affect Game Pass. You really think everything will be fine if they spend ANOTHER year not launching games, delaying this, cancelling that? They'd better start actually releasing games. They based their entire E3 presentation on games coming out in the next year, so they know it too. People will start getting fed up soon.
@Moby but that is exactly what take two doesn’t want. Word of mouth can kill a launch window so if a game is bad or has any issues but is on gamepass then word of mouth will hamper that. Unlike already invested sales/preorders upfront.
Obviously it does not make a sense for Take-Two.
Because they are
1. not a console manufacturer with access to not only first-party but also third party content
2. they are releasing 2-3 games per year which is can not sustain subscription service.
Sooo..duh?
I don't know. It's a business model that the biggest players in entertainment are using. With the Game Pass, you basically hire the game and unlike movies, music and TV it can last thousands of hours. Surely it makes sense as in many ways as the Game Pass is basically a glorified demo station.
Don't get me wrong.I love the Game Pass, but I'm under no illusion that I have paid for games I would never have bought otherwise and I don't even own them. That's the strength of it though and ultimately why I do love it.
@mikecamel because I'm sure most Xbox gamers would love it if GTA 6 , RDR 3 , Mafia 4 , Bioshock 4 etc were day one on gamepass...
"It doesn't make sense for us, a bread manufacturer, to make waterproof toasters for the monsoon affected countries"
@Would_you_kindly
then those xbox gamers should probably just go and buy the game correct?
Considering TT's pretty much sole money maker is GTA which has itself, effectively become a 1-game subscription platform.....who would expect them to want to launch it on someone else's subscription?
Correct me where I'm wrong?
Isn't this the same take two that was selling Tiny Tina Wonderlands collectors edition for like $120 and DID NOT even include the game?
From my own experience, I've bought plenty of games I wouldn't have gone near if it wasn't for the ability of playing them first on Game Pass
@Martsmall i don’t think i’d wanna do that! I can only play VR for an hour tops, then i take a break. I can play on a screen for a few hours if i’m home alone. I suppose it’d be decent for someone who hasn’t got a decent size TV.
@c1979h you do know PS+ has like twice as many subscribers as Game Pass? At the moment i put PS+ extra an premium above Game Pass. The main selling point of Game Pass is day one exclusives yet there’s been 2 in two years!! Forza H 5 which is great an Halo Infinite which is ok. PS+ has lots of Playstation exclusives that are pretty much all incredible games, just not day 1.
I agree with take two. Look for 3rd party game developers it doesn't make much sense going to GP or sony day 1 but 6 months or 1yr after then sure, get that money while you can. Microsoft can afford to do it with thier 1st party games due to having a huge purse but if for some unforeseen reason that money was to start drying up them Microsoft would have to rethink its GP model and how it launches 1st party titles to make up for the losses. Different strokes for different folks and all that.
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