Bold Choices or Burnout? Take-Two’s Warning About Relying Too Much on Sequels

Grand Theft Auto owners give advice that many should listen to, relying only on sequels is “resting on your laurels.” Although Take-Two has highly successful IPs, it admits that “everything degrades” over time.

 

Take-Two has cemented itself as one of the entertainment industry’s most important conglomerates. Therefore, any advice coming from the owners of Grand Theft Auto and Red Dead is worth noting. Recently, the company has taken stock of its projects and future plans, reaching a conclusion that many might take as a guiding principle: relying solely on sequels is “resting on one’s laurels.”

Take-Two CEO Strauss Zelnick shared his thoughts during the company’s latest earnings call (via GameSpot). When asked about the value of sequels versus new IP, the CEO remarked, “We’re different than a lot of other big companies. For a big company, it’s tempting to rest on our laurels.” However, Zelnick warns that this shouldn’t be the path forward: “We have a lot of intellectual property. We know that if we make a sequel, it’s a lower-risk proposition than a new IP. But everything degrades. And while most of our franchises tend to do better than their previous installments, we’re very proud of that because it’s not the industry standard.”

“Ultimately, everything falls apart, even big titles,” Zelnick adds. “So if we’re not attempting new things and new intellectual properties, we’d be doing more than just resting on our laurels. We’d be running the risk of burning the furniture to heat the house, and that never ends well.”

 

Taking risks with new IP is “one of the key ways to create lasting value”

 

Reflecting on some recent mobile-focused products, the CEO concludes by acknowledging that “the risk is greater.” “From time to time, we take a hit and that impacts our operating margins. But, over time, this will be one of the key ways to create lasting value.” Indeed, this approach is what has brought Take-Two to its current position: “And, to be clear, if we hadn’t been willing to create new intellectual properties when we came here 18 years ago, when the risk profile of this company was much higher, well, none of us would be sitting here today, and you wouldn’t be listening to this call. That is, quite simply, the fact.”

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