Take-Two CEO Strauss Zelnick has outlined the company’s growth strategy as it looks to capitalise on “extraordinary tailwinds” in the video games market.
During the publisher’s first quarter earnings call on Monday, Zelnick said the video games industry is in rude health andpredicted decades of growth for the sector.
“This industry is the most rapidly growing industry in entertainment and that’s not going to change for the next 10, 20 or 25 years,” he said.
“With that backdrop, can we fail to execute? Of course we can, so what are we doing about it?”
Zelnick saidTake-Twois primarily focused on organic growth – he expects new entries in the publisher’smajor franchises to be released more frequently in future– but that mergers and acquisitions also form part of the company’s current strategy.
“First our focus is on being the most creative, the most innovative and the most efficient company in the business. We take that incredibly seriously and the reflection of that is the quality of what we do most of the time, and the reflection of that is in thefinancial results that we’re able to delivermore often than not,” Zelnick said.
“Right now, we are increasing our investment in development, we are increasing our R&D investment. We do expect to enhance our release schedule – we launchedPrivate Division, we bought Social Point, and I think you can expect opportunities that are both driven organically and inorganically.
“We took over this company roughly 12 years ago, we had $700 in net revenue, this year we’re projecting $2.5 to $2.6 billion in net bookings. That is primarily organic growth, we’ve done a few acquisitions but primarily that’s organic growth.”
On Monday, Take-Two reiterated that it hasthe strongest development pipeline in its history, including sequels from its biggest franchises as well as new IP.
“I’d be loathe to give you an annual growth rate, I can’t really do that,” Zelnick said on the earnings call. “What I can tell you is we’re duty bound to deliver new IP every year and new releases of franchise IP, we’re duty bound to deliver the biggest and best titles in the business and it’s our job to create hits and more often than not we do that.
“If we do that, we’re going to have a great set of results. And if we can add on somehow some inorganic growth, which is also part of our current strategy, selectively and in a highly disciplined way, then we can deliver even more growth.
“I always like to say, you can listen to the words, but it’s always better to look at the actions because that’s probably what will be repeated. And our actions are we deliver hits and we deliver organic growth.”
