GTA 6 Interview Puts Take-Two CEO on the Spot

The Wall Street Journal spoke with Take-Two Interactive CEO Strauss Zelnick about GTA 6, Rockstar Games, the company's financial performance, and the gaming industry's future. But it quickly turned awkward when the interviewer began by asking about Take-Two's falling stock price and whether the company had enough hit franchises beyond Grand Theft Auto.

With GTA 6's November 19 release date approaching, the interview touched on a handful of key topics related to the upcoming game. Zelnick discussed the cost of developing the game, Rockstar's decision to delay it, the importance of retaining experienced developers, and how artificial intelligence could affect game development. He also discussed piracy and the increasing influence of big tech companies in the gaming space.

The interview began with the interviewer saying GTA 6 was set to be one of the biggest video game releases ever.

Take-Two's stock was down more than 20% from its prior high, and other entertainment companies had reportedly shuffled their release calendars around the game. "I don't argue with the market," Zelnick said. "I like to focus on the company's fundamentals, rather than short-term stock movements. "There are 26 analysts who follow Take-Two," he said. "The company just needs to continue to deliver on its business performance.

However, the interviewer suggested that Take-Two might be too dependent on GTA 6 and might not have enough hit games in its portfolio right now. Zelnick shot down that notion, noting that the company has 15 franchises that have each sold at least five million copies. He also said Take-Two was "one of the strongest collections of intellectual property in the gaming business."

In addition to Grand Theft Auto, Zelnick also highlighted other major franchises within the company's portfolio, including Red Dead Redemption, NBA 2K, WWE 2K, BioShock, Borderlands and Civilization. He also cited sales of Red Dead Redemption, which have topped 65 million copies, as well as the company's mobile games, including Words With Friends and Empires and Puzzles. "These franchises show that Take-Two's success isn't entirely predicated on what's coming out next at Rockstar," Zelnick said.

The discussion then shifted to the costs of developing GTA 6.

The interviewer hinted that the game may have cost more than $1 billion to produce, but Zelnick didn't confirm any specific figure. Instead, he admitted the project had been costly and had taken a long time to assemble. "Our mission at Take-Two is to create the best entertainment on Earth," he explained, "and we've built our strategy around creativity, innovation and efficiency.

Zelnick said expensive decisions are sometimes needed to achieve those goals. But when the company does the right things, he says, those investments can pay for themselves and even deliver supplemental returns. He was not willing to promise how quickly GTA 6 would recoup its development costs, saying the company never claims success before a project has actually launched.

Another big part of the conversation was Rockstar's decision to delay GTA 6. The interviewer asked about the time when Rockstar allegedly went to Take-Two and asked for more development time instead of releasing the game on schedule.

Zelnick conceded that the timing of the discussion wasn't great, especially since the company had just had a board retreat 10 days earlier.

But he said these situations are part of the balancing act of managing creative projects. Sometimes a developer needs more time, sometimes more resources, or sometimes a major change to an existing project. He likened such choices to his earlier days in the film and music business, when executives sometimes had to decide whether to go back for additional reshoots or to the recording studio because the material wasn't good enough.

"If we need to make tough decisions, we will," Zelnick said. "It is part of our culture and business strategy." He says a company's values are really tested when it's inconvenient or expensive to stick to its principles. He also says that does not mean any request for more time or resources will be automatically approved. He has turned down similar requests in the past, including one where he ruled that a game should be released despite the dev team's concerns. He thinks that specific decision was a good one, fortunately.

Zelnick also cited his long relationship with Rockstar's leadership when talking about the GTA 6 delay. "I have been working closely with the top management of the studio for almost 20 years and I know the difference between what is nice to have and what is absolutely needed," he said. He saw the extra dev time as a must-have, not a nice-to-have, with GTA 6.

The discussion also covered worries about Rockstar's seasoned development team and the risk of losing key creative individuals. According to Zelnick, the longevity of senior creative and executive teams is one of the most important ingredients for long-term success in the entertainment business. "Big games take a long time to develop, so having a team of experienced people working together through that cycle can make a big difference.

He admitted that losing key employees would be a big blow to Take-Two but argued that a company should never become too reliant on one person.

Even if an executive (such as the CEO himself) were to leave the company suddenly, the business should be able to continue without missing a beat. Zelnick believes that his role as the company's leader is to prepare it to operate successfully without him. He even said that his successor might do better than he did.

The interview then moved on to artificial intelligence and its possible uses in game development. "We still don't have enough data to properly measure the financial benefits of AI across the gaming industry," Zelnick said. He said the term "AI" has become complicated because some players don't want generative AI involved in the games they purchase.

But he added that video game development has used high-end technology, artificial intelligence, and machine learning for years. These technologies are not entirely new to the industry, and Take-Two has been experimenting with different applications in hundreds of projects. The company's mission is to use technology to make games more creative, innovative and efficient.

Zelnick also admitted that the actual cost savings from AI have been relatively small so far. He cited Take-Two's mobile business, where a studio in Turkey had previously used a local agency and human actors to create ads for its games. Later, the company showed him ads created entirely with AI to show how the technology could cut production costs in some areas.

But he was very clear that it was advertising, not the actual development of video games.

The interview also discussed piracy. "AI tools could one day allow people to recreate existing PlayStation 4 games within platforms like Roblox," the interviewer said. "Piracy has always been a concern across the entertainment industry," Zelnick said, recalling his experience with movies and recorded music.

"When I was in that business, piracy was estimated to be around 10% to 20% of the movie business at any one time," he explained. The situation became much worse in recorded music. By the mid-2000s, he believed that piracy had affected around 80% of the market.

Historically, piracy has been less of a problem for interactive entertainment due to the size and complexity of video games. Still, Zelnick believes it could become a bigger issue in the future. That means Take-Two will have to react with legal measures and technical fixes. He said many of the company's games depend on online servers for the intended experience, meaning pirated versions can't provide the same functionality.

The discussion then moved to Netflix and other entertainment companies trying their hand at gaming. "Netflix has had little success trying to get into the gaming market, spending a number of years doing that," the interviewer said. Zelnick said Netflix is also a Take-Two partner with some of the company's games available on the streaming service. Rather than necessarily building a traditional video game business, he believes Netflix is adding more value to its subscribers.

He also praised The New York Times for its successful pivot from a traditional print publishing company to a broader digital business. By acquiring existing games and then developing original titles, it showed that entertainment companies could gain a foothold in gaming without decades of industry experience.

As the interview wrapped up, Zelnick was asked about the prospect of big tech players such as Amazon and Apple acquiring established entertainment companies.

He said Amazon had already bought MGM, countering the notion that these big-ticket acquisitions had never happened. He also said Apple's current business strategy makes a major entertainment acquisition unlikely, but a change in leadership could eventually affect that strategy.

The interview concluded with a question about David Ellison and the recent changes in his entertainment business. Zelnick jokingly asked if he was really being asked to advise, explaining that Ellison had already made his decisions and brought in new leadership. He also said that the new management was talented and that there were potential synergies within the business.

Finally, the interviewer asked him to finish a sentence about what GTA 6 had to achieve when it launched on November 19. Zelnick's answer was simple: the game had to be spectacular entertainment.

The interview covered many important topics, but it also offered insight into how Zelnick makes Take-Two's business decisions. He repeatedly emphasized long-term planning, experienced creative teams, and delivering quality entertainment, whether he was defending the company's existing franchises or explaining Rockstar's development priorities. With GTA 6 looming, the company appears to believe in Rockstar's efforts, but Zelnick isn't ready to declare victory until players can actually get their hands on the game.