GTA firm Take-Two will benefit from Epic Games store launch, says boss

Take-Two boss Strauss Zelnick expects increased competition among platform holders to drive down platform fees.

The Epic Games store offers developers an 88 per cent share of the revenue their games bring in, compared to the 70/30 per cent revenue split offered by rival Steam, as well as platforms operated by companies including Microsoft, Sony and Apple.

During Take-Two’s first quarter earnings call on Monday, the publisher was asked whether it sees platform fees evolving heading into the launch of Google’s Stadia, Xbox Scarlett and PlayStation 5.

“You’re already seeing that some recently launched platforms have announced lower fees. And if you go from an oligopoly environment to a broadly competitive environment, I think that has to be your expectations.

“And I would just note that obviously that benefits the company directly as those fees decline,” he added. “That doesn’t even count, of course, the volumes, so I think it’s going to be sort of, the food is both tasty and plentiful, which is nice.”

The Epic Games store launched in December 2018 and its more attractive revenue split has helped it secure some major PC exclusives including Take-Two’s biggest upcoming game, September 2019’s Borderlands 3. On PC, the title will be available exclusively through the Epic Games store until April 2020.

Fredrik Wester, executive chairman of the board at publisher Paradox, said in June that Epic Games has done “a great job for the whole industry” with the launch of its PC storefront.

“I think the 70/30 revenue split is outrageous,” he said. “I think the platform holders are taking too much money.”

Wester claimed the dominant 70/30 revenue split is an outdated model based on the distribution of movies on boxed VHS tapes. “That was physical. It cost a lot of money. This doesn’t cost anything. So Epic has done a great job for the whole industry, because you get 88%. Fantastic move. Thank you very much.”

During Take-Two’s earnings call on Monday, Zelnick also said the video games industry is in rude health and predicted decades of growth for the sector.

While the company is primarily focused on organic growth, the executive said mergers and acquisitions also form part Take-Two’s current strategy.