Digital distribution accounts for less than 15 percent of Take-Two's revenues, and while that number is bound to grow, CEO Strauss Zelnick predicts that it won't actually mean a reduction of retail sales.
Conventional wisdom says that retail sales are on the way out as digital distribution and cloud computing become increasingly accessible and prevalent. There's no question that digital has experienced tremendous growth in recent years and will continue to do so for the foreseeable future, but Zelnick said he doesn't expect that growth to come at the expense of conventional retail sales.
Digital distribution represents less than 15 percent of Take Two's revenue, he told Bloomberg Television's Inside Track, and while that number is growing, retail will remain an important part of the equation because of the sheer size of videogames. "Packaged goods isn't going away for our business... because we have huge file sizes," he said.
He said OnLive is doing a "phenomenal job" of taking on the technical challenges of cloud computing but added that it suffers from similar issues. "It's pretty hard to interact with huge file sizes where latency issues are meaningful, if you're entirely in the cloud," he added.
Over the next three years, "I think you can see digital distribution to be 20, 30, 40 percent of our business," he said. "However, I believe our business is going to grow. So I don't think it actually takes a bite out of retail, and I doubt it takes a bite out of consoles. I think it's a growth business; I think for interactive entertainment, everything grows, the wind is at our back."