Last week, Google announced Project Genie, an AI-powered virtual world creator still in its infancy that seemed to spook a number of video game investors. Following the announcement, stock prices of companies such as Take-Two, Roblox, and Unity took a noticeable dip, seemingly due to a belief that Genie was going to mostly or fully replace user-generated content down the line. But at least one of those companies’ CEOs isn’t ruffled by the price drop: Take-Two’s Strauss Zelnick.
Speaking to IGN today ahead of the company’s Q3 earnings call, Zelnick responded to my question about whether or not he saw Genie as a threat to Take-Two’s business. He doesn’t. Quite the contrary, he sound pretty positive. Here’s his response in full:
“This company and its products were built upon machine learning and artificial intelligence more than 25 years ago. That’s the story of this business; we use computers to create what we do. So we’re energized and excited by these new tools and the prospects that they bring. We have actively embraced new AI, I said so when we spoke about it in the last couple calls. [Author’s note: I ask Zelnick something about AI most quarters as news-relevant, here’s a summary from 2023 of what has been his consistent stance.] In fact, we have hundreds of pilots and implementations [of AI] across our company including with our studios. I think tools are what drive additional innovation in what we do, drive efficiency, and drive creativity, and that’s our three-part strategy.
“I think the confusion in the marketplace is somehow that tools equals properties…and tools and properties are very different things. Creators use tools to make amazing entertainment, and of course that will never change, and once you make amazing entertainment you have to market it worldwide, and the people who are best at marketing entertainment worldwide are big, significant entertainment enterprises with the balance sheet to actually support those launches, companies like us. So I feel more optimistic than ever that new technology is going to allow us to supercharge our business.”
In the past, including in the aforementioned 2023 conversation with Zelnick, I’ve asked him if he thinks generative AI will ever be able to create a GTA-like game wholesale, and his response has always been that it won’t. But I asked him today if the appearance of Genie had changed anything for him; it hasn’t.
“I don’t think theres any tool by itself that you can press a button and make a competitive property,” Zelnick said. “Some romance novelists for example are using AI tools to write certain parts of their book, but they still have to come up with the concept, the characters, and the structure. I don’t think you’re going to find hit movies, hit novels, hit songs, being entirely created with technology with no creator interaction, it’s just not the history of creativity. So I think perhaps people are confusing tools and technology with hits, and they’re really different things, and I would never want to underestimate the importance of human genius, even with fantastic tools. I think fantastic tools unlock human genius to do great things.”
Okay, but what if those fantastic tools, available now to anyone, are used to make a clone of a GTA game? Does Zelnick have any intellectual property concerns? Sort of, sure, but he’s seemingly of the mind that it’s better to work with the community than against them.
“We protect our intellectual property and we are respectful of toher people’s intellectual property,” he said. “At the same time we’ve allowed a lot of users to engage with a lot of our games and of course the FiveM business is an example of that. User-generated content can be and already is a big part of what we do around here. I also feel that user-generated content sort of stands side-by-side with professionally-generated entertainment. For example, YouTube is a huge business, but it represents about 12.5% of overall linear entertainment consumption. 87.5% is still old-fashioned, professional content made by human beings.” [Take-Two cited Activate Consulting as the source of this stat following the call.]
We also spoke to Zelnick about his confidence in GTA 6’s release date, and Rockstar spinning up marketing for the game this summer. In today’s earnings report, Take-Two announced it had brought in net bookings of $1.76 billion for the quarter, and that it’s raising its expectations for the year to have net bookings between $6.65 billion to $6.7 billion.
Rebekah Valentine is a senior reporter for IGN. Got a story tip? Send it to [email protected].
