Putting Up Paywalls Is a Bad Idea for Console Games, Take-Two Exec Says

One major area of growth for Grand Theft Auto and Red Dead Redemption parent publisher Take-Two Interactive is what the company calls "recurrent consumer spending." This all-new category includes digital content such as microtransaction offerings that keep a product like Grand Theft Auto V sustained in between major installments. Recurrent consumer spending is big business for Take-Two (and other publishers), and now, Take-Two president Karl Slatoff has spoken up about the company's approach.

"What's really working for us goes back to compelling content. I'll tell you what doesn't work. What wouldn't work in the context of core gaming is what is very popular in casual gaming--putting up road blocks," he explained at a Piper Jaffray business summit this week in New York.

"When you put up roadblocks, and that's how you monetize--that might work in a casual context, that sort of repetitive, addictive-type behavior--but we don't believe it works at all and doesn't really have a place in the context or core gaming," he added. "So you have have to enable people to enjoy and play the game and content that you offer to them is either enhances that gameplay experience but is not necessarily required to enjoy the game. It enhances it and it enhances it in a meaningful way."

Slatoff also stressed that every game is different and some titles will offer heaps and heaps of add-on content, like GTA V and NBA 2K16, while others will offer less. He also said that he expects most if not all of Take-Two's upcoming titles to including post-launch monetization systems in some way or another.

"There are many different approaches but it's all about the right kind of content," he explained. "And not shoving it down the consumer's face where they feel like in order to actually enjoy and play the game that they have to keep anteing up. That can get very frustrating. That make work in a casual environment, but I just don't see that that works with a core consumer."

For Take-Two's latest reporting period, its recurrent consumer spending business grew 45 percent year-over-year and made up 54 percent of the company's total net revenue from digitally delivered content, or 24 percent of total net revenue. Take-Two CFO Lainie Goldstein said during the Piper Jaffray event that she expects recurrent consumer spending revenue will continue to grow into the future.

While Take-Two has not shared any specific numbers about GTA V's microtransaction revenue, the company has previously described the game as "the gift that keeps on giving." GTA Online recently enjoyed its best week ever in terms of number of people playing and revenue, which might explain why GTA V's story DLC is nowhere to be seen.

More stories from the Piper Jaffray event can be seen below.

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