Take-Two CEO Touts Games Plan

Q: When will we see a version of Grand Theft Auto for the new consoles?

We haven't announced anything further. We're still enjoying sales of San Andreas.

So You Want to Be a Rockstar?

Q: Grand Theft Auto is your flagship product, but beyond that franchise, where is Take-Two's growth going to come in the next console cycle?

Our goal is to first look at Rockstar and to build Rockstar. They have more assets and resources than they have ever had before, so that they can develop more product both "sequeling" games and extending their games, as well as developing new brands and extending their games to things like the PC and the PSP.

The growth will come, really, across the board. We think Rockstar can grow, we think our 2K publishing business can grow, and our distribution business -- Jack of All Games -- that I didn't talk about, is a $359 million business that will grow through the transition. But that probably will grow at a slower rate than the publishing.

Q: How do you nurture Grand Theft Auto so it continues to be a consistent performer for you?

Well, the good news is, one, we own that brand completely. We believe we have the best creative people in the business. And two, if you just look at their track record, they did Grand Theft Auto 3, and then Vice City came out and beat expectations in terms of game play. And then San Andreas came out and again beat expectations, so the bar got raised.

There hasn't been anything close to that in the industry -- Grand Theft Auto 3 being the biggest game to hit the market and then followed by two other products, one that outperformed and one that's tracking to outperform it. Those people are extremely passionate and extremely creative -- very, very driven. I'd say if there is one thing we are very confident, or most confident about, is our ability that they will deliver great product.

Q: The console makers are talking about broadening the audience for video games beyond the core gamers. With Grand Theft Auto and your Rockstar games, Take-Two largely seems to target that core gamers demographic. How important is it to branch out beyond that?

Grand Theft Auto was a product that, based on the unit numbers, has really become a mass product. We're approaching 12 million at the end of our last quarter on San Andreas. It shows that it's been [embraced by the masses] and that the core gamer market is growing, because it's a fairly sophisticated product to play.

Because a game is rated "mature" doesn't mean it's not mass market. The average age of a PlayStation 2 owner is still 20-plus. The Xbox owner is slightly higher.

Q: You're not concerned about reaching other potential customers beyond the core gamer?

We'll reach that audience through different types of products. We have Dora the Explorer. People don't realize that it's a whole different mentality that goes into making Dora the Explorer or Codename: Kids Next Door or Willy Wonka and the Chocolate Factory. For us to grow as a business, we have to look at all the different segments.

Q: Take-Two's been talking a lot about diversifying from its dependence on Grand Theft Auto. What are the key components of the diversification effort, and where are you in the process?

Sports, because it's so inviting, and because of the annualization. And because we had an opportunity to connect with the best developer of sports games.

The other diversification efforts are products that just fit outside the Rockstar umbrella. Some of that is more opportunistic. Some of that is with outside developers. Even within sports, to diversify from the licensed leagues, to properties that we own, like Amped and Top Spin.