Today, during Take-two’s financial conference call for investors and analysts, CEO Strauss Zelnick answered a few relevant questions about Grand Theft Auto 6 and the GTA franchise.
Zelnick mentioned that the company’s executives are “as excited as everyone else” about the upcoming trailer announced today and was asked whether a potential strike involving SAG-AFTRA’s voice actors and motion capture actors would slow down the game’s production.
Yet, Zenick’s answer was optimistic, mentioning that he’s optimistic about upcoming negotiations, but even in the worst-case scenario, the game is “completely protected.”
Negotiations are expected to resume next week. We’re optimistic and value all of our talent greatly, and we’ve value excellent labor relations, and we’re looking forward to reaching an agreement that serves everyone well.
That’s always been my approach. I’ve been involved with labor negotiations in every entertainment industry there is in my career and they’ve always worked out just fine. In the event that they don’t work out just fine, now we are completely protected.
The executive was also asked about the acquisition of FiveM, and he explained why the company is excited about it, not just because of the audience playing, but also due to the much larger audience watching players on livestreams.
We’re really excited about it. To be clear, this is a small economic opportunity right now and and a small cost to us. We want to be where the consumer is and what’s going in roleplaying in really two ways.
Number one, people are actually playing in roleplaying servers, and number two people are watching what they’re doing on Twitch. Both are really interesting.
The actual people playing is a relatively modest audience. It’s in the hundreds of thousands, but the people watching, that’s a huge audience and we’re interested in – first of all – making sure that our intellectual properties are protected.
We’re also really interested meeting the consumer where the consumer is and for certain consumers bonding is a really important activity. And finally, you know, people are consuming our electrical property. We would like to monetize it if we can. We think this gives us an opportunity to do all of the above.
During the same conference call, Zelnick pretty much reiterated his previously expressed opinions about generative AI and the possibility of investing in movies inspired by Take-two’s intellectual properties.
He explained that the new developments in AI are “really exciting” and he believes they’ll create efficiency and in certain instances will allow to do things that weren’t possible before. Yet, he doesn’t think generative AI will independently create hit games or remove the need for human creatives.
Zelnick believes that better AI tools will raise the bar and give Take-Two’s developers the opportunity “to do more and better.” Menial work will likely be reduced, while high-level work will be enhanced.
Yet, he doesn’t expect the price tag of making games will be reduced. On the other hand, he expects everything to get better and the competition to become more intense, especially for companies who can’t avail themselves of the resources Take-Two has.
About movies, Zelnick confirmed that Take-Two is unwilling to use its own balance sheet to finance linear entertainment projects. The risk and reward profile isn’t appealing to the company, and they much prefer the risk and reward profile of creating games.
He explained that the margins aren’t great, without even considering the risk of failure which would possibly jeopardize the involved IPs. The hit ratio for a console property at Take-Two is between 80 and 90%, while the hit ratio for a well-run movie studio is around 30%.
Licensing IPs to third-party movie studios is a possibility, as the company has done so with Borderlands and Bioshock. They have “other titles in discussion” but nothing they’re ready to announce yet. Zelnock concluded by mentioning that they’re going to be “very, very selective, and very, very careful.”
In the meanwhile, while we’re waiting for Grand Theft Auto 6, its predecessor GTA5 continues selling like hotcakes, as we learned earlier today.
