GTA, Red Dead Parent Publisher Wants "Recurrent Consumer Spending" In All Of Its Games
The model may be different, but all Take-Two games are going to have an element of "recurrent consumer spending," it seems.
Take-Two, the parent publisher of Grand Theft Auto and Red Dead Redemption developer/publisher Rockstar Games, has reiterated its stance on "recurrent consumer spending." That's the company's term for a bucket that includes virtual currency, add-on content, and microtransactions. In an earnings call this week, Take-Two CEO Strauss Zelnick repeated what he has said time and time again: you can expect a "recurrent consumer spending" element to be included in most if not all of the company's games going forward.
It may not always be virtual currency. It may not always be microtransactions. It may not always be expansions. But Take-Two is aiming to bake into its games some element that keeps players coming back--and spending.
"We've said that we aim to have recurrent consumer spending options for every title that we put out at this company," Zelnick said, repeating comments from previous earnings calls. "It may not always be an online model. It may not, probably won't always be, a virtual currency model, but there'll be some ability to engage on an ongoing basis with our titles after release across the board."
This comes as no surprise, given that Take-Two's recurrent consumer spending category is a huge revenue-driver for the company. For the quarter ended September 30, revenue from recurrent consumer spending rose by 66 percent and amounted to more than $200 million. That's a whopping 48 percent of Take-Two's overall revenue of $443.6 million for the period. The margins on digital content are generally more lucrative than physical content, so that's another reason why you should expect to see Take-Two and other companies continue to offer more and more microtransaction opportunities.
Zelnick said a lesson that Take-Two has learned from GTA Online is that people will flock to content--and spend extra money on it--if the experience is compelling enough. Rockstar updates GTA Online basically constantly, with new modes and activities releasing all the time. This commitment is paying off for Take-Two, and Zelnick suggested that Red Dead Redemption 2 will also offer players something extra.
"One of the things that we learned is, if we create a robust opportunity and a robust world in which people can play delightfully in a bigger and bigger way that they will keep coming back and they will engage and if there is an opportunity to monetize that engagement," he said. And we've announced that there will be an online component to [Red Dead Redemption 2]."
Zelnick went on to say that it's a new world for the economics of video games today, because no longer do developers always put out games and move on to the next ones. They often stick with them, adding new content over time, and reaping the financial benefits if players stick around and keep spending as they have in GTA Online.
"It's been transformative for us and the only reason it's transformative for us is because it's transformative to our consumers," he said. "The business that once upon a time was a big chunky opportunity to engage for tens of hours or perhaps 100 hours has turned into ongoing engagement, day-after-day, week-after-week. You fall in love with these titles and they become part of your daily life."
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