Recently, Strauss Zelnick — Take-Two’s CEO — was asked about the games industry going digital during the company’s latest earnings report. Although he believes that the physical side of the industry is profitable, he concludes that it’s just a matter of time before the whole business goes digital.
Publication site gamesindustry.biz had the chance to interview Take-Two’s CEO and ask him about the changing landscape that is the games industry and whether or not it will turn fully digital in the future.
Despite the CEO saying that physical distribution is “a very important” and that physical retailers are the company’s partners, over time, he thinks it’s not a matter of “if” but “when” regarding the business turning entirely digital.
Zelnick’s response to the publication site regarding physical and digital trends moving forward lies below:
“Look, our quarter’s a little bit skewed, because catalog was 92% of our business, and obviously catalog skews heavily toward digital distribution, so 92% of our net bookings in the quarter were digitally-delivered. That’s a pretty high number.
I actually don’t think there’s an irreducible minimum of physical distribution. I think it depends on consumer behavior. And I’ve made no secret of my belief that over time, this is a digitally-delivered business. But right now, physical distribution is still a very important part of the business, and physical retailers are our partners and we see them as very important industry partners.
But over time, I think if you look at every other entertainment medium, it’s a matter of time before the business is entirely digital.”
To break down Zelnick’s thoughts, he believes that physical media will stick around for a while until other entertainment mediums influence the games industry over time, creating an entirely digital landscape.
Whether you believe Zelnick or not, he expects digital numbers to represent 87% of Take-Two’s business for the year, which would be up from 82% last year. He also estimates that 68% of current-generation console game sales will be delivered digitally — compared to 55% last year — due to players having to stay at home.
