Take-Two: MMOs don't work in the US
Strauss Zelnick says MMOs are generally unprofitable in US; "A couple of our competitors have found out that through very, very expensive lessons."
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Grand Theft Auto and Max Payne parent publisher Take-Two Interactive is investing in massively multiplayer online games, but not in the United States. That's because, according to CEO Strauss Zelnick, they just "don't work" in the region compared to Asia.
"We're actively investing in online MMOs; we're not doing it in the US. Why? Because MMOs don't work here," Zenick said today at the Cowen Technology, Media, and Telecom Conference in New York.
Zelnick said though many MMOs have attempted to gain footing in the United States, only two--World of Warcraft and EverQuest--have ever been truly successful in the region.
As evidence of the difficulty of getting an MMO off the ground in the US, Zelnick pointed to Blizzard Entertainment's recent announcement of a significant overhaul to its next-gen MMO Titan.
"A couple of our competitors have found out that through very, very expensive lessons--one of our competitors just recently announced they're restarting an MMO project in the US," Zelnick said. "We look at it and say 'How many MMOs have ever been successful in the US?' Two. World of Warcraft and EverQuest. That's kind of a bad slugging percentage."
Zelnick explained that for these reasons, Take-Two has decided to invest in MMOs in Asia. The company recently partnered with Tencent for NBA 2K Online and is also working on a Civilization MMO for the region.
"We've stayed away from that market and instead we went to Asia where at any given time ten or twenty are successful in China generating lots of revenue," Zelnick said. "And we figured, we don't really know China very well, so we partnered with the best company in China: Tencent. They taught us the business, we taught them something about sports game development and we've launched NBA 2K Online with virtually no economic risk and a straight shot to the upside."
Bethesda and Zenimax Online Studios will release The Elder Scrolls Online later this year, though a pricing model for the game has yet to be announced.