Game Industry Vision: Take-Two CEO Emphasizes Customer-Centric Value (UPDATED)
Portfolio Pulse from Franca Quarneti
Take-Two Interactive Software Inc's CEO Strauss Zelnick proposed a new algorithm for video game pricing based on the length and engagement of a game during a financial call. The algorithm would calculate the cost of a game by considering the per-hour value multiplied by the anticipated play hours and the perceived value of ownership. Zelnick noted that while gamers get great deals from extensive play, publishers lack direct control over retail prices, which could complicate the implementation of this pricing strategy. The impact on the price of the upcoming Grand Theft Auto 6 (GTA 6) was not specified, but it could be higher if the algorithm is applied.
November 15, 2023 | 11:06 pm
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Take-Two's CEO introduced a pricing algorithm that could lead to higher prices for games with longer engagement, like the anticipated GTA 6. The lack of control over retail prices may pose challenges to this strategy's implementation.
The CEO's proposal for a new pricing algorithm is innovative and could potentially increase revenue per game sold, especially for high-engagement games like GTA 6. However, the lack of control over retail prices and the market's uncertainty about how consumers will respond to such pricing changes introduce a level of unpredictability. Therefore, the short-term impact on TTWO's stock price is neutral, with moderate relevance and importance due to the direct connection to the company's products and potential revenue impact.
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IMPORTANCE 60
RELEVANCE 80