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Take-Two’s CEO says having its games on subscription services on day one ‘doesn’t make sense’ (VGC) (It doesn't when you sell 160+m copies of gtav)

kingfey

Banned
Edit: Reminder, they released subscription service for gta online. They are ok with that, but not day1 releases.

https://www.videogameschronicle.com...iption-services-on-day-one-doesnt-make-sense/

Take-Two Interactive CEO Strauss Zelnick has said he doesn’t think it makes economic sense for the company’s games to be available on subscription services on the day of their release.

In a new video interview with GamesIndustry.biz, Zelnick pointed out that while Take-Two’s games do appear on subscription services, he doesn’t believe adding them on day one is the best practice.

“We’ve supported various subscription services and we’re happy to do so,” Zelnick said. “Our scepticism has been around making frontline console products available day and date with subscription.

“That doesn’t make any sense to us because, economically speaking, we don’t think consumers are prepared to pay for that – why would they? – and we can’t afford to turn our business upside down in a way that doesn’t make sense economically.

“So there always has to be an intersection between what the consumer wants and what the publisher is able to do, and it doesn’t make sense to do that for frontline properties in our opinion. I think Sony minimally agrees with us, because they’ve said so.

“It can be potentially great for catalogue properties – those are properties that have been in the market for a while. If their price has been reduced it can make economic sense to offer those on a subscription basis.”

However, Zelnick stressed that this may not always be the company’s stance, and it may change depending on how the subscription landscape changes in the future.

“This company does not operate based on one person’s opinions, including mine, and when it makes sense we’ll support subscription services, and if that’s where the consumer wants to be, that’s where we’ll be,” he explained.

“It’s one of the terrifying things about working in video games – that we’re such on the cutting edge of everything that any prediction will inevitably make someone look foolish.”

Zelnick has expressed his scepticism for subscription services in the past, especially the practice of adding games on their date of release.

In 2019, Obsidian‘s The Outer Worlds, which was published by Take-Two, was added to Xbox Game Pass on day one, after which Zelnick said it was “hard to say” if the move had helped or hurt the game’s success.

“I think what we’ve said all along is that, generally speaking, we want to be where the consumer is,” he said at the time.

“Generally speaking, we think subscription offerings to the extent they exist are probably better suited to catalogue, but we’re willing to take experimental chances when it makes sense for a particular title and when the deal underlying that option also makes sense for us.”

However, this hasn’t stopped the company committing its releases to subscription services on occasion.

Last November two of the three games included in Grand Theft Auto: The Trilogy – The Definitive Edition were added to Xbox and PlayStation subscription services on the same day the GTA collection was released.

The Definitive Edition version of GTA San Andreas was added to Xbox Game Pass, while the Definitive Edition of GTA III was added to PlayStation Now.
 
iggy azalea s GIF
 

kingfey

Banned
I mean...considering people always use the expression "this game would be perfect for Gamepass /PS Plus" when talking about indies and AAA flops like Guardians of the Galaxy...it makes sense.

Why would a game that sells over 10M of actual copies go to a subscription service?
Not to mention, those games have a big legion of consumers, who are ready to pay day1 prices.

Any game that sells 10m in the first year, has no business with these subscription. Because 1st year doesnt have big sales, and users like to pay those prices.
 

kingfey

Banned
“Generally speaking, we think subscription offerings to the extent they exist are probably better suited to catalogue, but we’re willing to take experimental chances when it makes sense for a particular title and when the deal underlying that option also makes sense for us.”
Thank you very much. Better said, than me.
 

StreetsofBeige

Gold Member
I mean...considering people always use the expression "this game would be perfect for Gamepass /PS Plus" when talking about indies and AAA flops like Guardians of the Galaxy...it makes sense.

Why would a game that sells over 10M of actual copies go to a subscription service?
Big name games go on sub all the time. GTAV has even been on PS Now and Game Pass before. And has probably every big Sony seller too at some point. All EA games go on EA Play about 9 months after launch on console, and that better EA Origins sub plan on PC has day one EA games.
 

NickFire

Member
This isnt gamepass effect, so keep your torch down. Take2 IPs just sell that well. So to them, they dont see value in these day1 services.

This doesnt apply to other publishers and devs, whose IPs doesnt have those pulls.
Isn't it kind of obvious that this applies to any company that relies on huge launch numbers to justify their investment? And it doesn't apply to just videogames, which is why we aren't seeing that many big movies hit streaming day 1 anymore.
 

EverydayBeast

thinks Halo Infinite is a new graphical benchmark
Plus developers count on sales on a scale of 1-10 threat level game subscriptions serve its a 10 I give credit to people standing up to big bad “game pass” games today are thrown to subscriptions.
 

jroc74

Phone reception is more important to me than human rights
Edit: Reminder, they released subscription service for gta online. They are ok with that, but not day1 releases.
Uh, yeah...because it's not a day one release of a game?

Its like an MMO having a subscription service. But in this case, you don't need gta+ to play GTA Online.
 
This isnt gamepass effect, so keep your torch down. Take2 IPs just sell that well. So to them, they dont see value in these day1 services.

This doesnt apply to other publishers and devs, whose IPs doesnt have those pulls.
Game pass effect = subscription services effect.
 

Leyasu

Member
Basically, nobody would offer enough for gta to go on any service day one.

Besides, the cost to sony or microsoft would probably be more than Take 2 spend developing the game. All that outlay when you ain't the publisher or getting it exclusively doesn't make sense
 
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kingfey

Banned
Isn't it kind of obvious that this applies to any company that relies on huge launch numbers to justify their investment? And it doesn't apply to just videogames, which is why we aren't seeing that many big movies hit streaming day 1 anymore.
It applies to the type of IP.
If the IP can bring big numbers, then it has no place on day1 (Any big name IP). But if the IP is brand new, and there is risk of flopping, that is where they day1 comes in. Games like outer world falls in this category.
 

kingfey

Banned
Objection: Speculation.
its not speculation. There has to be cause and effect.
Gamepass/Subscription cause only affects Xbox/subscription consoles. PC is wildcard, since its a massive platform.

For example, IF Sony, MS and Steam had their own day1 subscription, then that would affect the market. Because the buying users are small, due to these subscription.
Until we reach that day, its not hurting anything. The buyer user is still massive, and wont be impacted by this.
 

kingfey

Banned
Uh, yeah...because it's not a day one release of a game?

Its like an MMO having a subscription service. But in this case, you don't need gta+ to play GTA Online.
They are ok with a subscription service, Just not the day1.
They saw, that they can make more money from their Plus service.
 
its not speculation. There has to be cause and effect.
Gamepass/Subscription cause only affects Xbox/subscription consoles. PC is wildcard, since its a massive platform.

For example, IF Sony, MS and Steam had their own day1 subscription, then that would affect the market. Because the buying users are small, due to these subscription.
Until we reach that day, its not hurting anything. The buyer user is still massive, and wont be impacted by this.
Your logic is weak:

If

"Subscription service hurts the platform which offers those services"

Then:

Subscription services hurt overall sells.
 

ChiefDada

Member
Very straightforward logic. And this is why I don't understood why Microsoft would commit to a blanket promise of all 1st party games available day 1 on gamepass. This should have been reserved for AA/indie games. Or maybe offer some of the AA/indie games at more competitive prices, say 39.99-49.99. I can only imagine how much money was left on the table with FH5.
 

DaGwaphics

Gold Member
I think it all depends on who is making the games and who is running the service. Ubi, EA, and MS are fine with putting their software on the services they have operating control of on day one. The only way it effects sales in a major way is if subscription #s are high, in which case the recurring revenue will be viewed as more valuable than individual sales. I can see a third party being in a completely different position.
 

kingfey

Banned
Your logic is weak:

If

"Subscription service hurts the platform which offers those services"

Then:

Subscription services hurt overall sells.
That would need the service to overtake the userbase.

There is 2 sides to these platforms. Buying power users, and the users who are subscribed to these service.

When its 50/50, the subscriber users would learn towards the buying users. But when its 70/30, the subscriber users win.

The service has to reach that stage. Even with that, the price of those games being on the service would also increase. The devs would require more money, to cover their lost sales.
 
That would need the service to overtake the userbase.

There is 2 sides to these platforms. Buying power users, and the users who are subscribed to these service.

When its 50/50, the subscriber users would learn towards the buying users. But when its 70/30, the subscriber users win.

The service has to reach that stage. Even with that, the price of those games being on the service would also increase. The devs would require more money, to cover their lost sales.
You speak like an expert.....a videogame forum expert.
 

kingfey

Banned
Very straightforward logic. And this is why I don't understood why Microsoft would commit to a blanket promise of all 1st party games available day 1 on gamepass. This should have been reserved for AA/indie games. Or maybe offer some of the AA/indie games at more competitive prices, say 39.99-49.99. I can only imagine how much money was left on the table with FH5.
To them, long term stable money is important. Since they can generate more money this way. Look at 2022 release games.
They have office, and azure which brings them insane amount of money. They understand these type of business.
 

kingfey

Banned
You speak like an expert.....a videogame forum expert.
I am using business logic.
Even with these points, there are some points, that I am missing. Like what the actual split between the devs and platform owners, aside of the known split. do they gain more money, as more copies sold? Do they make more money, when they negotiate with the service owner, compared to the games sold?

I dont have these data, So my points are all educated guess.
 
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Lognor

Banned
Well yeah. RDR2 made $750 million in the first weekend. Why they hell would they give up guaranteed $60 per copy of revenue just to share $10 per copy with Microsoft. This isnt rocket science.

The only way that would happen is if MS cuts them a check for $750 million.
Or if Microsoft buys take two ;)
 

SSfox

Lies about why mods reply ban and warn me.


I mean he need to say it? If you make super big budget games, that also sell very well usually, it is obviously just nonsensical to put those games on day one sub service.
 

NickFire

Member
It applies to the type of IP.
If the IP can bring big numbers, then it has no place on day1 (Any big name IP). But if the IP is brand new, and there is risk of flopping, that is where they day1 comes in. Games like outer world falls in this category.
I'm not following why you think the IP has significant relevance. Its all about the return needed in proportion to the investment IMO. If a company needs the massive influx of cash to justify the investment, it will not go on subscription day 1 unless they are trying to salvage poor projections about the return and believe a subscription payment will be better for the bottom line. This is not a knock against any subscription that exists. It is just reality.
 

Hugare

Member
Not to mention, those games have a big legion of consumers, who are ready to pay day1 prices.

Any game that sells 10m in the first year, has no business with these subscription. Because 1st year doesnt have big sales, and users like to pay those prices.
Which boggles my mind that MS will give up on +10M of Call of Duty per year in order to put it on Game Pass

Will be worth it? We will see, but its a bold move
 

ChiefDada

Member
To them, long term stable money is important. Since they can generate more money this way. Look at 2022 release games.
They have office, and azure which brings them insane amount of money. They understand these type of business.

I understand the lucrative potential of subscription services, but something has to give when attempting to sell premium (massive budget) content under this model. You either cut the budget/quality for these games, or achieve a subscriber base and retention rate that supports the large budgets. In my opinion, consumers won't go for the former and as of today, there is no evidence to suggest that Microsoft is anywhere close to achieving the latter.
 

AmuroChan

Member
It's ok to have different business models. I don't know why anyone feels the need to pick a side. This past week I went to the theater, watched Netflix, and bought a blu-ray. It's ok to enjoy your hobbies in different formats. I will play games via subscription services AND also continue to buy games that I want to own.
 

NickFire

Member
Which boggles my mind that MS will give up on +10M of Call of Duty per year in order to put it on Game Pass

Will be worth it? We will see, but its a bold move
Duty is the most interesting title to watch in relation to the thread topic IMO (whenever they can go day 1). But it might actually be MS's safest bet for pushing massive subs without much revenue loss. The lost day 1 sales will obviously be huge, however Activision was already drifting it deeper and deeper towards being primarily monetized by microtransactions. MS might actually come out ahead on this one if they increase the number of both cosmetic and non-cosmetic purchases (Duty has both cause weapons).
 

kingfey

Banned
I'm not following why you think the IP has significant relevance. Its all about the return needed in proportion to the investment IMO. If a company needs the massive influx of cash to justify the investment, it will not go on subscription day 1 unless they are trying to salvage poor projections about the return and believe a subscription payment will be better for the bottom line. This is not a knock against any subscription that exists. It is just reality.
Subscription at the end of the day, is only for recouping the cost, if you think your game wont have that success. It wont guarantee you a big success. Success or failure depends on how you handle it.
New projects have risks. They could lose their money like the marvel game. Or have enough success like horizon zero down and ghost of tsushima.
 

Hugare

Member
Duty is the most interesting title to watch in relation to the thread topic IMO (whenever they can go day 1). But it might actually be MS's safest bet for pushing massive subs without much revenue loss. The lost day 1 sales will obviously be huge, however Activision was already drifting it deeper and deeper towards being primarily monetized by microtransactions. MS might actually come out ahead on this one if they increase the number of both cosmetic and non-cosmetic purchases (Duty has both cause weapons).
I believe that Activision were already making bank woth salles + microtransactions. So giving up on that for subscriptions + microtransactions may be risky.

We will see. The increase in subs will be huge, will be interesting to see.
 

mckmas8808

Mckmaster uses MasterCard to buy Slave drives
Very straightforward logic. And this is why I don't understood why Microsoft would commit to a blanket promise of all 1st party games available day 1 on gamepass. This should have been reserved for AA/indie games. Or maybe offer some of the AA/indie games at more competitive prices, say 39.99-49.99. I can only imagine how much money was left on the table with FH5.

Because it would be harder for them to compete against Sony and Nintendo "without" doing it. It was a smart business move for them specifically and no one else. Don't forget that MS is neck-deep in the subscription business with almost every product they sell now. And it's working for them literally in every other business of theirs.
 

mckmas8808

Mckmaster uses MasterCard to buy Slave drives
I believe that Activision were already making bank woth salles + microtransactions. So giving up on that for subscriptions + microtransactions may be risky.

We will see. The increase in subs will be huge, will be interesting to see.

GamePass will only TRULY be a winner for Microsoft if they make it to around 100 million subs for GamePass in a few years. If they can't get to 50 million GP subs by the end of 2023 then something has gone massively wrong!
 

tmlDan

Member
Duty is the most interesting title to watch in relation to the thread topic IMO (whenever they can go day 1). But it might actually be MS's safest bet for pushing massive subs without much revenue loss. The lost day 1 sales will obviously be huge, however Activision was already drifting it deeper and deeper towards being primarily monetized by microtransactions. MS might actually come out ahead on this one if they increase the number of both cosmetic and non-cosmetic purchases (Duty has both cause weapons).
Maybe they'll do a Forza type thing and release it early for people who buy an ultimate edition, cash in on people who want to unlock new guns for WZ early and put it on GP.

That might be a good strat to get revenue through both means.
 

C2brixx

Member
Very straightforward logic. And this is why I don't understood why Microsoft would commit to a blanket promise of all 1st party games available day 1 on gamepass. This should have been reserved for AA/indie games. Or maybe offer some of the AA/indie games at more competitive prices, say 39.99-49.99. I can only imagine how much money was left on the table with FH5.
Microsoft has the data on how many full price 1st party games their customers buy per year. It's probably around 2-3, and this if they even release a 1st party title in a given year. With the subscription they are getting revenue regardless if they release new 1st party titles or not. Just pay 3rd parties and indies for some games to fill the service with until the next 1st party title is ready. Its probably marketing dollars they use to spend on TV ads in the past that they are using to acquire games for Gamepass, because you rarely see Xbox commercials on TV like you use to.
 
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