Take-Two’s CEO Strauss Zelnick has plenty of reasons to be optimistic.
It’s more than just the fact Grand Theft Auto 6 – expected to be one of the biggest entertainment launches of all time – is still on course to launch in the autumn of next year. If we look at Take-Two’s more immediate situation, the publisher’s most recent financials showed that revenues and bookings were up for the three months ending September 30, losses were shrinking, annual staple NBA 2K recovered from its 2023’s disappointing sales, and 11-year-old GTA 5 continues to outperform expectations.
It’s not been all sunshine and rainbows though. Back in April, Take-Two announced it was laying off 5% of its workforce as the company fell prey to the same economic pressures that have affected almost every company in the video games industry.
Ahead of Take-Two’s financial results for Q2 being announced, we spoke to Zelnick about the long-rumoured, now-confirmed sale of Private Division to an undisclosed buyer, and also discussed some of the wider challenges and opportunities facing the GTA firm.
The conversation can be found below, and encompasses the CEO’s thoughts on the perks and perils of cramming four blockbuster releases into the next calendar year, the impact of the disappointing Borderlands movie, and the pressures that publishers encounter given the slow transition between console generations and consumers’ ever-increasing quality demands for AAA games.
The interview has been edited for clarity.
“I do believe that PC will become a more and more important platform for AAA titles”
Take-Two has a hefty line-up for 2025, with Borderlands 4, Mafia: The Old Country, Civilization 7, and GTA 6 all arriving in the same year – plus annual releases like NBA 2K. What was the thinking behind having so many major brands release within the same window?
First of all, we bring the titles to market when they’re ready and not before, so we can’t manage the timing perfectly. Secondly, we’ve been building our pipeline for years in service of having an annual release schedule that’s robust year in, year out.
We’ve said and confirmed in this release that we expect to set new records for net brookings in fiscal [year] 2026 and fiscal [year] 2027, so we think the music is going to continue, it’s not going to stop.
How will this line-up affect you in future years? We imagine it’s unlikely you’ll have four titles of this magnitude every year, or even every two years.
We’re certainly building up our pipeline and have been for some time in service of that very goal. But you’re right, there will be bigger years and some less big years.
On the other hand, we’re building up our live services businesses. Mobile leads here at about 50% of our net bookings but we also have live services in NBA 2K, Red Dead Redemption, GTA 5. As we build those up, they effectively are a big title in and of themselves every year.
Our goal is to constantly have a really terrific frontline release schedule as we expect to have in the next fiscal, plus an incredibly robust catalogue, a huge ongoing life services business for both mobile and console – all at the same time. It’s nice if we can deliver it – that’s our challenge.
The announcement of Borderlands 4 came in the wake of the movie’s disappointing performance at the box office. What impact did the film’s struggles have on the brand and Take-Two?
With the launch of the movie, we actually sold more [back] catalogue than we expected, so it did provide a marketing umbrella. You are right that the movie was disappointing.
The Borderlands film followed a string of hugely successful and critically acclaimed video game adaptations – the Mario movie, Fallout, The Last of Us, Sonic. The quality of game-based film and TV shows is rising, so does that make it even more challenging to get it right?
That’s one of the many reasons that we’re very, very selective about bringing our intellectual properties to other media.
NBA 2K is a staple for Take-Two, but last year’s edition didn’t sell as well as expected. How has NBA 2K25 done by comparison?
It’s doing great. We’ve sold almost 4.5 million units, recurrent consumer spending is over our expectations, up year-over-year. The trajectory is terrific. We feel really good about it.
What do you attribute this kind of recovery to?
It’s a better game. I mean, last year’s game was also great, but it’s a better game. The fact we focused on delivering a great PC SKU has helped a lot and, of course, [PS5 and Xbox Series] are growing rapidly and we do really well with those. [PS4 and Xbox One] were more of a challenge last year.
The transition to the current generation of consoles has been much slower than before – four years in, and 50% of active PlayStation players are still on PS4, for example. How does that impact you as a publisher? Is there pressure to continue supporting both generations, despite the cost of doing so?
Yes, it has been a different generation. There was the pandemic, there were chip shortages, so for quite some time – really too long – there was limited supply. Supply constraints [are typical] in the early stages of a new generation, but they usually go away within about six to nine months. But these supply constraints lasted for the better part of two years.
“The quality threshold that the consumer demands always goes up”
And then the pandemic came to an end and we saw for the first time in forever for mobile – and for the first time in a long while for console – an actual decline in the overall market. So it was a confluence of events that put some pressure on this new generation.
PC continues to grow in importance for AAA – that’s a good thing for us. We’re seeing the benefits of that in NBA 2K25. I do believe that PC will become a more and more important platform for AAA titles.
Nintendo confirmed this week that Switch 2 will be backwards compatible, so that’s another new platform where you’re competing with a massive back catalogue of titles.
You’re always competing with everything, and you’re competing with yourself. Also, backward compatibility is good for our catalogue, and we think we have the highest selling catalogue per SKU in the business.
What are your hopes or expectations for the Switch successor?
I never count Nintendo out.
Finally, we’ve seen a number of AAA titles struggle in the past two years – most recently Star Wars Outlaws, which on paper seemed like a surefire hit. What are your thoughts on the challenges in the AAA space at the moment?
I think it’s hard and it’s getting harder. And that’s true of all entertainment businesses as they begin to mature.
The quality threshold that the consumer demands always goes up, and that works for us because we have a three-part strategy to be the most creative, the most innovative, and the most efficient company in the entertainment industry. If we come close to achieving those goals, then we meet the consumer where they are and where they want to be. But there’s no doubt that quality demands always increase over time.
