Take-Two Thinks on Subscription Model

Strauss Zelnick, Chairman of Take-Two, is grinning at the prospect of taking his "triple-A titles" and milking them with the "holy grail" of business models: subscriptions.

It's become one of gaming's most widely-known paths to profits: get gamers to subscribe for something and recurring revenues will fund office parties until eternity. World of Warcraft's $300 million-per-quarter is a testament to the strategy.

Speaking at BMO Capital Markets's investment conference, Take-Two boss Strauss Zelnick laid out his grand vision of combining his best franchises with this proven money-making scheme.

"The holy grail is taking a business, already a very large and successful business that's focused on packaged goods that you sell once and then are occasionally resold by others with new benefit to us, and turning that into a subscription business or a semi subscription business where we have an ongoing relationship with consumers, giving them products that they want," proclaimed Zelnick.

The biggest obstacle, he acknowledged, is that only a few, well-loved games can convince people to continually spend money every month. Zelnick explained that "mid-tier" titles won't use this system, but rather "triple-A titles that people really want to have."

"Who's better positioned to do that than the company that has the top franchises?" asked a confident Zelnick.

"Top franchises" or not, asking gamers to pay for content on a continuing basis could be a tough sell. Different from microtransactions, which at least offer users content with every purchase, MMOs use subscriptions to operate ongoing costs such as servers and support staff. Unless Take-Two invests in a high-quality Grand Theft Auto MMO, it's debatable as to whether any other brand could successfully sustain a monthly payment.

Source: Destructoid