'Fortnite' cheered by 'Grand Theft Auto' maker, Take-Two Interactive CEO
The video game industry is rapidly growing with new hits and technology. A leading developer, publisher and marketer of the industry, Take-Two Interactive Software, is responsible for some of the top selling games of all- time, including ‘Grand Theft Auto,’ and its betting on loyal fans to boost growth despite “enormous tailwinds.”
“The average gamer is 35 years old and people consume for the rest of their lives that which they fell in love with at the age of 17,” said Take-Two's CEO Strauss Zelnick to FOX Business’ Maria Bartiromo on Wednesday. “So as the cohort ages, the cohort grows. And that’s why we expect that the sector will probably continue to grow at a rate faster than GDP for the foreseeable future.”
Although Take-Two crushed Wall Street’s top and bottom line estimates in its latest earnings report, shares dropped after the company was hit by an analyst downgrade. Competitors Electronic Arts and Activision also traded down. However, Zelnick was optimistic due in part to the expected continued success of big games including, ‘Red Dead Redemption,’ which has sold 23 million units so far, and ‘NBA 2K19,’ also having a record year.
“Certain analysts may have taken a view that interactive entertainment has become a sass business—it’s still an entertainment business,” Zelnick said. “And that means you put out titles—some work—some don’t work and over time most titles will have a decay curve.”
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| TTWO | TAKE-TWO INTERACTIVE SOFTWARE INC. | 162.93 | -0.85 | -0.52% |
| EA | ELECTRONIC ARTS INC. | 152.89 | +1.63 | +1.08% |
| ATVI | NO DATA AVAILABLE | - | - | - |
And it’s not just big hits, like ‘Grand Theft Auto’ and the like, boosting Zelnick’s buoyancy. Competition from rivalries like ‘Fortnite’ is welcomed partly because success boosts the entire industry.
“Our last fiscal year, ‘Fortnite’ was a huge hit then, ‘Grand Theft Auto’ online had another record year. ‘Red Dead Redemption’ had this massive launch—‘Fortnite’ was doing well,” he said. “We think it’s great that there are other hit titles in the market.”
Zelnick also weighed in on reports that Google will launch a Netflix-style game streaming service. In his opinion, streaming is a “positive” for the industry.
“I think streaming, which is a technology in our business model of course, is likely to be important to our business probably within the next two or three years,” he said. “And that should bring our properties to people all over the world who don’t have dedicated game machines.”