Fortnite has been the phenom that came from nowhere to shake up the gaming world. Take-Two Interactive CEO Strauss Zelnick said in his analyst call Fortnite is ‘reinforcement of the fact that big hits by their very nature are unexpected’ and transformative for gamers.
Fortnite has been the phenom that came from nowhere to absolutely shake up the gaming world. Take-Two Interactive CEO Strauss Zelnick said in his analyst call Fortnite is reinforcement of the fact that big hits by their very nature are unexpected and transformative for gamers.
While Take Two Interactive earnings were lower due To the Grand Theft Auto Online delay, they were just that, a delay. This underscores the power of monster franchises for a gaming company. Right now Fortnite is ‘The Game’ for the younger gamers and it seemingly came from nowhere. It is illustrative about the industry and Fortnight and the $TTWO names hearing Zelnick’s take on it.
Take Two is the home of Red Dead Redemption and Grand Theft Auto among other titles, Take-Two CEO Strauss Zelnick said to analysts he doesn’t expect his studios, 2K Games and Rockstar Games to change course lockstep following Fortnite and PUBG. Zelnick reminded that many so called industry experts had said Red Dead Redemption was dead in the water and wouldn’t succeed because Westerns were done. We all know how huge Red Dead was and the huge anticipation for the sequel.
“Maybe the biggest learning [from Fortnite] is just the reinforcement of the fact that big hits by their very nature are unexpected. What drives a big hit is innovation not derivation. That’s what we’re proud of around here. When we put out Red Dead Redemption, the conventional wisdom was that western titles do not work in the video game business, and Red Dead Redemption was a big hit and we have extremely high expectations for Red Dead Redemption 2. ” the $TTWO CEO said.
“So I think the fact that Fortnite surprised everyone, particularly given where Fortnite came from–after all, what is now in the market is based on a prior release that did not perform all that well. It’s just a reflection of the fact that if you innovate and give consumers what they want, you can get an extraordinary result. And while we would love to corner the market in hits, and we certainly see it as our job to do so, we don’t have all of the hits and we shouldn’t expect to.”
A reminder to us that Fortnite had a few lives and just how it exploded, and no one expected it! It all started with a paid game called Fortnite: Save the World which had a free-to-play Battle Royale iteration released many years later.
Zelnick said “The free-to-play revolution, if you will, whether that’s mobile or fixed, has been transformative for the business.“
He went on to say “It’s massively increased the size of the business. There are a lot people who think Fortnite has welcomed into our industry people who didn’t previously play video games. Some of that is anecdotal; it’s hard to know, but I think some of that is right. This is all good news.”
Going through the numbers we know Take-Two has a huge existingl free-to-play business through games released in China and through its relatively recent acquisition of mobile game studio Social Point. This will be a space to watch in coming years clearly making free-to-play an important part of Take-Two’s business, but $TTWO has the GTA and Red Dead franchises.
Zelnick said in reference to dropping everything and changing to Fortnite’s model, “I think if one changed one’s business to follow other people’s big hits, you’d be constantly playing catch up. And to say you wouldn’t be in second place is an understatement. You might remain in last place. So it’s our job to innovate, and more often than not that has driven our success.”
Rockstar does not have it’s head in the sand however and will be adding the “transformative” battle royale space with GTA Online by adding a battle royale mode called Motor Wars in 2017. Ahead of earnings Rockstar also added another battle royale inspired mode, Trap Door. Activision Blizzard’s Call of Duty: Black Ops 4 scheduled to release in October includes a new battle royale mode also.
For gamers these are great times with the Free to Play making gaming affordable and avaialble to so many. It is also putting the onus on the narrative driven games to deliver beyond expectations.
Game on! Where are we droppin’ boys?