Take-Two Expects Temporary Boost in Game Pass Subscriptions Due to Call of Duty

According to Take-Two CEO Strauss Zelnick, incorporating a high-profile game like Call of Duty into Game Pass will inevitably drive consumers to subscribe, albeit temporarily. Although Take-Two supports subscription services with its legacy titles, it has been hesitant to include brand-new AAA games in these services on their release date, citing economic concerns. Zelnick stated, 'Offering a frontline title with a premium price in a subscription service, day and date, will push consumers to that subscription service for at least a period of time.' However, this move by Microsoft does not alter Take-Two's perspective on the subscription opportunity, as Zelnick emphasized that the company's decisions are based on rational considerations. In a recent discussion with GamesIndustry.biz, Zelnick shared his thoughts following the company's latest financial results, which showed modest growth during Q1. The company has undergone cost reductions, including redundancies, over the last 18 months, partly due to its $12.7 billion acquisition of Zynga and the new realities facing the games industry post-pandemic. Zelnick expressed confidence that Take-Two is now at the right size for the current market, having cut around $165 million from the annual run-rate of the business. The company has a three-part strategy to be the most creative, innovative, and efficient entertainment company. One of the hardest-hit areas has been the Private Division label, which specializes in smaller, independent titles. Despite this, Take-Two is still supporting some independent releases and has narrowed down its pipeline to focus on the most promising titles. The highly anticipated Grand Theft Auto 6 is expected to be the biggest entertainment launch in history, with a release window set for the end of 2025. While some gamers may still be using previous-generation consoles, Zelnick believes this is not a significant challenge, pointing to strong sales of the company's older titles. He emphasized that although players may be slower to upgrade, they will eventually move to new hardware. Zelnick also discussed Take-Two's drive to be the most efficient entertainment business, acknowledging that some games, like GTA 6 and Judas, have taken a long time to develop. However, he noted that development cycles for mobile games can be shorter, and the company has annualized titles like NBA 2K and WWE 2K with consistent development cycles. Take-Two's financials indicate a strong lineup of upcoming games, including 15 'immersive core' games, one independent game, five mobile releases, and three remasters over the 2026 and 2027 financial years. With Civilization VII due to arrive at the end of this year, Zelnick expressed confidence in the company's ability to generate big hits and outperform the industry.