Take-Two CEO: Digital Won't Kill Retail

Andy Chalk

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Nov 12, 2002
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Take-Two CEO: Digital Won't Kill Retail


Digital distribution accounts for less than 15 percent of Take-Two's [http://www.take2games.com/] revenues, and while that number is bound to grow, CEO Strauss Zelnick predicts that it won't actually mean a reduction of retail sales.

Conventional wisdom says that retail sales are on the way out as digital distribution and cloud computing become increasingly accessible and prevalent. There's no question that digital has experienced tremendous growth in recent years and will continue to do so for the foreseeable future, but Zelnick said he doesn't expect that growth to come at the expense of conventional retail sales.

Digital distribution represents less than 15 percent of Take Two's revenue, he told Bloomberg Television's Inside Track [http://www.bloomberg.com/video/63783406/], and while that number is growing, retail will remain an important part of the equation because of the sheer size of videogames. "Packaged goods isn't going away for our business... because we have huge file sizes," he said.

He said OnLive [http://www.online.com] is doing a "phenomenal job" of taking on the technical challenges of cloud computing but added that it suffers from similar issues. "It's pretty hard to interact with huge file sizes where latency issues are meaningful, if you're entirely in the cloud," he added.

Over the next three years, "I think you can see digital distribution to be 20, 30, 40 percent of our business," he said. "However, I believe our business is going to grow. So I don't think it actually takes a bite out of retail, and I doubt it takes a bite out of consoles. I think it's a growth business; I think for interactive entertainment, everything grows, the wind is at our back."

via: Gamasutra [http://www.gamasutra.com/view/news/31035/TakeTwos_Zelnick_Digital_Growth_Wont_Cannibalize_Packaged_Biz.php?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+GamasutraNews+%28Gamasutra+News%29]


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obisean

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Feb 3, 2009
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The games are too large you say? Well, Steam already has an answer to that, and it's only one word: Pre-loading.
 

The Austin

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Jul 20, 2009
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I agree. Besides, I prefer a hard copy, something I can throw at my wall when I get pissed.
 

Andy Chalk

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obisean said:
The games are too large you say? Well, Steam already has an answer to that, and it's only one word: Pre-loading.
Preloading is great for pre-release games, but it's fairly limited in utility and I'm not convinced it has sufficient mainstream appeal to make a real dent in retail sales. Files sizes go hand-in-hand with bandwidth limitations in ensuring that retail will remain an important part of the sales chain for a lot of years to come.
 

JaymesFogarty

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Aug 19, 2009
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Not only do I like to have a pretty box to display, (and show off in an extremely boastful fashion to my friends) but I have a terrible connection to the internet, so even the thought of purchasing a game online makes my stomach tremble. Retail games are definitely here to stay; for now at least.
 

SimuLord

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Aug 20, 2008
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obisean said:
The games are too large you say? Well, Steam already has an answer to that, and it's only one word: Pre-loading.
Truly. I set my computer to preload New Vegas, had lunch, took a nap, and when I woke up it was ready to go---and my Internet service sucks! If I could afford the good kind, it would've been on my hard drive before my head hit the pillow after lunch.
 

Autofaux

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Aug 31, 2009
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Also, its a ***** to privately sell digital copies. Shit has to be sent with instructions *sigh*
 

kibayasu

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Jan 3, 2008
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He is, of course, talking about digital distribution on consoles. There was an article not too long ago that said that digital downloads now account for a full half of PC revenue, wasn't there?
 

_Nocturnal

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Nov 4, 2006
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I agree, digital distribution won't be such a big deal for Take-Two.
That's because they simply don't get it. They fail spectacularly at it.
 

TraceyS

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Jan 2, 2010
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Digital won't kill retail but forcing eveyone to connect to services will certainly put a dent into all sales.

Both Starcraf II and Civ V bith require that and, thinking it would be a big deal, I didn't think too much abiut it but, I can't play either of them at my cottage (where I cannot get an internet signal).

At the moment, I cannot connect to Steam because the client started crashing my laptop yesterday.

It pisses me off that I'm being punished for the pirates who steal stuff but if this is the way of the future, I'll be looking for another hobby.
 

Andy Chalk

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Nov 12, 2002
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kibayasu said:
He is, of course, talking about digital distribution on consoles. There was an article not too long ago that said that digital downloads now account for a full half of PC revenue, wasn't there?
I think that figure takes into account every form of digital sales, including DLC and microtransactions, which kind of falls outside the scope of digital distribution as it applies to regular game sales.

Correct me if I'm wrong, however.
 

Narcogen

Rampant.
Jul 26, 2006
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He's wrong.

If he's smart, he knows he's wrong, but knows he has to say that in order to avoid alienating his traditional retail channel managers.