Strauss Zelnick, CEO of Take-Two Interactive, which owns series like GTA, NBA 2K, Borderlands, Civilization, among many others, believes that the production cost of video games has actually decreased, especially when it comes to a project that is supported in the long term and generates revenue for many years.
When asked how he feels about games that take 6 years to develop, like GTA 6, Zelnick responded, “Remember, in the good old days, or the bad old days depending on your perspective. We would work on a game, release the game, hope for the best, then make another game. Now we have the opportunity for consumers to continuously interact with our successes. Whether through additional content or through multiplayer versions of those games.”
Zelnick mentions GTA Online, NBA 2K whose online component has greatly increased the time players spend playing (from 3 to 12 months), as well as WWE 2K, so the business has changed, requiring teams to work on content to continue making money with each unit sold, which ultimately makes productions cheaper.
“You’re right that the total development cost for a blockbuster has risen, but if we amortize that cost over all the content that is released for a game, I suspect that it has actually decreased,” Zelnick said about the production cost and the earnings from supporting a game in the long term.
“The most expensive part of development is that big initial launch. Then the cost of supporting the game, from the production and marketing team’s perspective, is much, much more moderate.”
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