Rockstar's Parent Company Talks Microtransactions, VR Doubts, Nintendo Switch Optimism

Strauss Zelnick speaks about a number of high-profile gaming topics.

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During a speaking appearance today, Take-Two CEO Strauss Zelnick discussed a number of interesting topics, including microtransactions, virtual reality, and the Nintendo Switch.

Starting with microtransactions, Zelnick said Take-Two is not trying to nickel-and-dime players, though he did acknowledge that the company has received some amount of criticism on the subject. Microtransactions are part of what Take-Two calls "recurrent consumer spending" and this is big business for the company, and highly lucrative given the margins on digital content.

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You can expect Take-Two's future games to continue to make use of microtransactions.

"You can't give stuff away for free in perpetuity; there's no business model in that," Zelnick said at the Cowen and Company 45th Annual Technology, Media & Telecom Conference today. "But we're not trying to optimise the monetisiation of everything we do to the nth degree.

"My concern is, if you do that, the consumer knows," he said. "They might not even know that they know, but they feel it."

Zelnick added: "Think about it anecdotally--when you paid a little too much for something, even if it was something really good, it really irks you. Paying too much for something bad is even worse. Paying too much for something really good, even if you can afford it, just leaves you with a bad feeling. We don't want our consumers to ever feel that way."

Also during the talk, Zelnick said Take-Two isn't do as much in the area of microtransactions as its competitors, though he didn't mention any by name. So you can expect Take-Two to try to walk the line of making more money per user, but in a way that doesn't negatively impact the user experience.

"We are convinced that we are probably from an industry view undermonetising on a per-user basis," the executive said. "There is wood to chop because I think we can do more, and we can do more without interfering with our strategy of being the most creative and our ethical approach, which is delighting consumers."

"We're not going to grab the last nickel."

Grand Theft Auto Online was a significant contributor to Take-Two's recurrent consumer spending revenue in the last quarter. Looking ahead, Rockstar has said Red Dead Redemption 2 will have an online element, though it has yet to be formally revealed.

Switching to virtual reality, Zelnick--who has been critical of VR in the past--started off by saying with a laugh, "[VR is] developing exactly as I said it would."

He remains skeptical of VR: "So far there is not a significant entertainment market for VR software. I think that's a factual statement."

Take-Two's Carnival Games virtual reality title "sold some units," Zelnick said, while he also called out the NBA VR experience that Take-Two made.

Overall, Zelnick said Take-Two will support VR if the install base is big enough, which is the company's plan for basically all platforms.

"If VR develops as a meaningful entertainment platform, we'll be there," he said.

"I am highly convinced it's not going to be, 'put on the headset, put on the earphones, stand up, hold two controllers, and do that for six hours.' That's very unlikely to happen" -- Zelnick

"I am highly convinced it's not going to be, 'put on the headset, put on the earphones, stand up, hold two controllers, and do that for six hours.' That's very unlikely to happen," he said.

A third major topic that came up during the talk was Nintendo Switch. Asked how much support Take-Two and its labels plan to give the hybrid console, the executive started off by pointing out, "We're there, front and center" with the new NBA 2K game coming to the console this year.

Regarding Switch in general, Zelnick said, "We believe in it. We see it the way [Nintendo does]; it's been a very successful launch. It remains to be seen how it does, but we're excited about it. Assuming there is an installed base, we'll be there. Not with all of our titles, but selectively."

The Switch is Nintendo's fastest-selling console ever, with sales passing 2.74 million units in its first month.

For more on Zelnick's speaking event today, you can listen to a replay of the 40-minute talk here.

In other Take-Two news, the company announced today that it has acquired Kerbal Space Program.

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