Today, Take-Two Interactive Executive Vice President Cindi Buckwalter presented her company's strategy to the analysts assembled at Citigroup's 16th Annual Entertainment, Media, and Telecommunications Conference. Coming less than a week after the company released a lower-than-expected fiscal-year 2005 earnings outlook, Buckwalter's speech provided little new information. However, she did address some noteworthy points.
First was the use of minigames as a vehicle for in-game advertising. Though Take-Two is responsible for the most infamous minigame of all time, Grand Theft Auto: San Andreas' "Hot Coffee" sex simulation, Buckwalter today said minigames will provide a novel way for brands to surface within gameplay.
She said the in-game ad model is in its infancy, but is one with potential to drive increased revenue for a publisher. Buckwalter reiterated deals Take-Two has already signed with Nike, Pontiac, and Toyota for ads that will appear in the publisher's sports titles. She said advertisers are now expressing interest in putting ads in non-sports titles as well.
"[Games are] attractive to advertisers given the volume of time that people are now spending playing games as opposed to looking at other forms of traditional media. While it's a smaller area for us now, we are looking for [in-game ads] to be an increasing contributor [of revenue] going forward,' Buckwalter told analysts.
Given that her company published three of the 17 Xbox 360 launch titles (NBA 2K6, NHL 2K6, Amped 3) Buckwalter was almost obligated to mention the shortage of the next-generation console. Though she conceded that sales of Take-Two's 360 titles were being limited by "the smaller quantity of hardware," she viewed the 360 as a "big growth area" for the company, and she was "pleased with the reaction to games Take-Two released."
When the subject turned to the PlayStation 3, Buckwalter was circumspect but clear. She said she expects to see "challenges" with the launch of the console "in terms of hardware availability," adding, "There will be hurdles [Sony] will need to overcome."
As a result of those expected shortages, Buckwalter said Take-Two was looking closely at its PS3 launch plans, indicating the publisher would tweak its marketing expenditures to conform to available supply of the console, due later this year. "If the hardware isn't there, do you have to spend so aggressively to promote?" she asked rhetorically. According to Buckwalter, Take-Two would "cut back" where it could, so that ad dollars could be more freely spent when supply wasn't limited.