Take-Two CEO Confident GTA VI Publisher Will Remain Independent and Avoid EA’s Fate

Take-Two Interactive CEO Strauss Zelnick says the GTA VI publisher is large enough to remain independent and has no concerns about a takeover.

In a Bloomberg interview about the upcoming release of GTA VI and the company’s future, Zelnick was asked whether he had considered selling the publisher, as “two of the largest competitors” in the gaming industry had recently done. The companies were not named, though they were most likely Activision Blizzard and Electronic Arts. Zelnick sees no reason for Take-Two to follow their example.

I think we’ve proven that we do very well as an independent company. We’re already a pretty large enterprise. We’ve reached the right scale and have a great balance sheet. By the end of the current fiscal year, we should once again be a company with a positive cash balance. We’re not in a position where we need to be part of a larger organization to remain competitive.

Zelnick’s confidence is also supported by the publisher’s financial position. He said GTA VI preorders “continue to reach record levels.” Analysts estimate that more than 11 million copies have been preordered.

Scale matters in the entertainment industry, at least up to a point. With less than a billion dollars in revenue, it’s difficult to assemble a competitive creative team, provide global marketing and distribution, and weather the inevitable setbacks. However, when annual revenue is well above a billion dollars, and we crossed that threshold long ago and are forecasting $8–$8.2 billion for the current fiscal year, further increases in scale don’t necessarily lead to greater success.

Besides GTA, Take-Two owns franchises including Red Dead Redemption, Borderlands and NBA 2K. For comparison, EA agreed to a sale for approximately $55 billion, after which the company took on around $20 billion in debt.

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