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Interview: Take-Two's Zelnick Talks Social Games, Acquisition Rumors

Interview: Take-Two's Zelnick Talks Social Games, Acquisition Rumors

June 14, 2011 | By Chris Morris

[Speaking with Gamasutra editor-at-large Chris Morris about the road ahead for his company, CEO Strauss Zelnick explains why he's in no hurry to sell Take Two, and why the publisher isn't taking part in the social game land grab.]

The turnaround story at Take-Two Interactive Software has been an impressive one over the past couple of years. The company, which had previously never posted a profit unless it had released a Grand Theft Auto title in its lineup that year, has managed to push into the black without the help of its biggest franchise and had several of the most anticipated games of 2011 and 2012 on display at its E3 booth this year.

But the success has once again kicked up chatter that the company might be in play. Analysts have speculated it is an acquisition target and, with activist investor Carl Icahn holding a big stake in the company, have begun openly wondering who will make the first bid.

CEO Strauss Zelnick, though, tells Gamasutra he's not in a big hurry to sell.

"I'm proud of what we've delivered," he says. "I'm proud of the value we've created for shareholders in the past few years. I'm proud the team has had precious few missteps. But, we're there for the shareholders. All public companies are potentially available. Every time something has come up we've considered it. All that said, we enjoy being an independent company."

One of the benefits of the company's current path is it has conditioned investors to recognize that it takes its time nurturing games, rather than committing to an annual cycle. Additionally, given the company's recent string of notable hits for both core and casual audiences, there's very little pressure on Take-Two to delve into the mobile and social network game spaces.

While Civilization World is still set to launch later this year, the two burgeoning gaming platforms still aren't high priorities for Take-Two and they're not likely to be so for a while.

Instead, says Zelnick, the company will follow the same path it is taking with MMOs (the NBA MMO it's working on with partners in China for that country's audience, in particular): Make slow, small investments as it learns the ropes.

And despite the land grab among publishers like EA and Disney to buy developers in the space, don't expect Take-Two to jump into those sorts of bidding wars.

"Currently, the money isn't there for someone like us, but I do see it as an increasing area," he says. "How do I square those two? Very modest investments. What we don't think is the right thing to do is to spend a lot of money on an acquisition to be an also-ran. We are not going to be able to compete with Zynga, even if we love their business model.

"Put aside Zynga. Let's try to understand casual gaming " let's decide who the consumers are and what they want. Then we decide, do we have the skill set to do so. … We're going to learn. If there's really a market there, we haven't missed the boat at all. If there's a market, all markets are hungry for good intellectual properties."

One hungry market the company has found has been the NBA. The NBA 2K line has grown into a consistent money maker for the company, which made it all the more surprising that the company did not factor a possible NBA strike into its earnings forecast.

Zelnick says the reason is simple: On a corporate level, they're simply not sure how a strike would affect the game.

"While it's possible it would be a bad thing, it's possible it might not be," he says.

On a personal level, however, he adds "I think a strike would hurt us " and frankly it's a bad thing for everyone involved."

On the company's other sports franchise " baseball " things haven't been as bright. The MLB games have been regular albatrosses, primarily due to onerous fees the company's previous management agreed to with Major League Baseball.

That contract expires at the end of next season " and while it's a bit too early to completely rule out future MLB games, Zelnick is adamant on one thing: "We don't want to lose money on any deal we do."

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