Is Strauss Zelnick Correct About the Value of Video Games?

There has been a misconception circulating that Strauss Zelnick, the CEO of Take-Two Interactive, believes video games should be priced based on the number of hours played. However, this is not the case. In a recent earnings call, Zelnick was asked about his views on subscription pricing in the entertainment industry. His response highlighted the value that video games offer to consumers, citing the depth and length of the experience as key factors. According to Zelnick, the value of entertainment is determined by the expected usage and the perceived value of ownership. He believes that the video game industry offers a great price-to-value opportunity for consumers, with many hours of engagement at a relatively low cost. For instance, 80 hours of gameplay in GTA 5 for $60 is considered better value than two hours of a movie for $12. Zelnick is not suggesting that games should be priced by the hour, but rather that the industry offers good value due to the length and quality of the experience. The question remains whether gamers consider the number of hours of entertainment when evaluating the value of a game. The data suggests that quality games with a long playtime tend to perform well, with examples including Hogwarts Legacy, The Legend of Zelda: Tears of the Kingdom, and Diablo 4. Even shorter games, such as Spider-Man 2 and Super Mario Bros Wonder, offer strong value by this measure. The significance of this conversation lies in the current economic climate, with consumer confidence falling and household financial positions expected to worsen. In the past, video games have proven to be a resilient form of entertainment during economic downturns, but it is uncertain whether this will be the case again. The rise of free-to-play games and subscription services has changed the entertainment landscape, and consumers may be more mindful of their spending habits. Ultimately, Zelnick's argument is that video games offer better value than other forms of entertainment due to their length and quality, and this will be an important factor in consumer decision-making during these uncertain times.