“We’re applying this price point in the cases where we think the quality not only supports it, but demands it.”
– Take-Two Interactive CEO Strauss Zelnick defends a next-gen price hike.
Take-Two Interactive hasn’t committed to pricing its next-generation titles at $70 across the board, but believes those higher prices are justified due to the value it offers in those games.
It’s a topic that came up multiple times during Take-Two Interactive’s earnings call this week, with CEO Strauss Zelnick saying that game development costs have risen over the years while the MRSP standard for new releases has not.
“But most importantly we believe we’re delivering the highest-quality titles in the business and consumers are staying more engaged than ever,” continued Zelnick. “Games have extraordinary playability and replayability and they offer many, many hours of entertainment. We think it’s a great value. It does rely on our continuing to deliver amazing experiences and that’s our strategy and our goal.”
Later on in the call, a second investor brought up the price increase, but in the context of the current economic situation and if higher priced games could negatively impact demand during a time when many people are having to tighten their purse strings.
While he remains empathetic to the current state of the world elsewhere in the call, Zelnick is largely unconcerned about the possibility that a $10 jump in MSRP like the one Take-Two has already announced for next gen versions of NBA 2K21 could price some players out of next-gen game purchases.
In short: “I don’t expect that there will be any concerns,” says Zelnick.
He explains that the jump is a “very modest price increase” when you consider that “the pricing has been going down on a real dollar basis for the better part of 15 years,” and reiterates that games are more expensive to make nowadays.
“And we’re applying this price point in the case where we think the quality not only supports it, but demands it,” continues Zelnick. “Our production costs have gone up greatly. But most importantly, the consumer experience is more robust than ever before. And I am utterly convinced that NBA 2K21 will be nothing short of extraordinary. So I don’t expect that there will be any concerns.”