Take-Two CEO Says Launching New Games Into A Subscription Service Like Game Pass Makes No Sense

Take-Two CEO Strauss Zelnick has again offered his perspective on subscription services in the gaming business, saying they don't make sense for frontline new releases to launch into on day one.

Speaking during Take-Two's latest earnings call, Zelick said his company has been "very cooperative" with both Microsoft and Sony on their subscription services "when it makes sense for us," but his views regarding subscription services for games as a whole have not changed.

Zelnick maintains that there are major differences between the linear entertainment (TV/film) business and interactive entertainment (video game) business, and while a subscription service may make sense for linear entertainment, Zelnick doesn't see the same viability for games.

"The interactive entertainment business is very different than the linear entertainment business. People consume far fewer hours of interactive entertainment in a given month than they do of linear entertainment," he said. "And within that consumption, there are far fewer titles consumed in interactive entertainment than there are with linear entertainment. So I, at least, pose the question as to whether subscription makes as much sense for interactive entertainment as it does for linear entertainment and registered some skepticism, which I still hold."

As for launching new games into a subscription service, like Microsoft does with first-party games for Xbox Game Pass, Zelnick said this does not make sense for Take-Two.

"I don't think that ever made sense. I still don't think it makes sense. And I believe that it's now becoming obvious that it doesn't make sense. It's just a lost opportunity for the publisher," he said.

Zelnick said he can't speak for Microsoft Gaming CEO Phil Spencer, who is very bullish on his own Game Pass subscription service for obvious reasons, but Take-Two's stance remains unchanged. For Take-Two, adding its games to a subscription service might make sense for older titles, Zelnick said, but don't expect to see Take-Two's big new releases coming to a subscription service on day one.

"There probably is a subscription business. It's a catalog business. It's probably best aimed at very avid consumers because those are the consumers who are interested in playing catalog titles, and playing a whole bunch of different titles in a given month," he said. "But I don't think it's a mass market service that supplants the interactive entertainment business as we know it at all. And I don't think there's any evidence to the contrary so far."

Zelnick has been echoing these comments for years. In 2021, the executive said a subscription service needs to make sense, economically, for the developers/publishers as well as the consumers. For older titles, the math might work, but it doesn't for new releases, Zelnick said.

"I think catalog can make sense for the publishers, it can make sense for the consumers who are avid, who really want access to a lot of product. But if you're getting into frontline product, then the economics are much more difficult to make sense of," he said.

One high-profile example of a Rockstar Games-developed title that went into a subscription service is Grand Theft Auto V. It was added and then removed from Xbox Game Pass.

While Microsoft launches all of its first-party games into Xbox Game Pass on day one, Sony doesn't do this with its own PlayStation Plus membership program. PlayStation's Jim Ryan seems to agree with Zelnick and believes this doesn't make economic sense.

For its part, Spencer recently said Game Pass is profitable, but its momentum is slowing down on console when it comes to new subscribers.