Think free-to-play games are often not very good? You’re not alone. Grand Theft Auto parent publisher Take-Two Interactive CEO Strauss Zelnick outlined his reasons today for why he’s not too keen on the free-to-play market, citing reasons such as a low percentage of paying players and overall bad quality.
“The problem with the free-to-play model is 95-97 percent of people who engage with your content don’t pay for it. 3-5 percent do; on a good day, 10 percent,” he said Wednesday at the Credit Suisse Annual Technology Conference. On the other hand, Zelnick pointed out that 100 percent of people who play Take-Two titles pay the company something.
“Most free-to-play games aren’t really high quality content at the end of the day” — Strauss Zelnick
“One of the reasons that free-to-play companies like Zynga did so well for a period of time is they had zero acquisition costs because they could use Facebook as a free acquisition platform,” he said. “Then Facebook changed that, and Zynga changed.”
Another problem with free-to-play games, Zelnick said, is that oftentimes–but not always–they are just not very good.
“The other thing that’s problematic with free-to-play games is in many instances, although not all, they’re vastly less engaging,” he explained. “And if you look at the history of the entertainment business across all media, the only entertainment companies that really succeed over a long period of time are those that surprise and delight consumers with incredibly high quality content.”
Zelnick
“Most free-to-play games aren’t really high quality content at the end of the day,” he added. “Certain competitors in that space have stated strategies of not making high quality content. And I’ve never seen an entertainment company–ever, ever, ever–succeed that didn’t have a stated strategy of making high quality content. Not everyone can actually achieve it, but you need to at least try.”
Although Zelnick doesn’t sound too interested in making free-to-play games, he said he understands there is potential in the market.
“So I think the model is very different, the consumer is different, the demographic is different. There is definitely a there, there,” he explained. “It is not our field of great expertise.”
Zelnick went on to temper his comments with the caveat that smartphone processing power is relatively poor at the moment. If Moore’s Law holds true, and Zelnick says he thinks it will, then Take-Two will be first in line to provide games on smartphones.
“But if that changes, and the processing power of a smartphone looks like a console and people want to play robust, high quality interactive entertainment on a smartphone, we can and should be there,” he said.
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