Take-Two, the parent company of 2K Games, Rockstar, Private Division and Zynga, has announced that they will undertake a “cost reduction program” after a lacklustre end to 2022 saw a number of game releases fail to set the video game charts alight. This could see some layoffs at the company, though it’s not expected to be along the lines of Microsoft’s recent cuts.
While speaking to investors, Take-Two CEO Strauss Zelnick highlighted Marvel’s Midnight Suns, PGA Tour 2K23 and New Tales from the Borderlands as three games that had all had critical success – Midnight Suns in particular – but struggled to find an audience.
Zelnick doesn’t blame the games or developers in any way, saying to GamesIndustry.biz that “I take personal responsibility for them. Our teams are delivering and over-delivering. They’re delivering hits; that’s what they’re supposed to do. I couldn’t be more proud of them. Personally, I have work to do to make sure we run this business efficiently and that we deliver results over time, and that’s what I aim to do.”
Marvel’s Midnight Suns is a particular example of misjudging the market. The game drew plaudits from across the industry when it launched, but with a release date in December, it was at the tail end of the holiday spending, and may have struggled to get across the kind of game it was. Coming from XCOM developer Firaxis, it feels as though it didn’t manage to quite reach that audience through the game’s marketing. Zelnick, speaking to Bloomberg’s Jason Schreier, admits the release window “wasn’t perfect”, but hopes it could have a long tail.
Take-Two aims to reduce costs by more that $50 million, in addition to $100 million in “cost synergies” that they aim to achieve through the recent Zynga acquisition. This will be made through “personnel, processes, infrastructure, and other areas, particularly in our publishing and corporate functions.”
While not ruling out som layoffs, Zelnick said to GamesIndustry.biz “We continue to support and build our development teams, and where we have overhead, we have to be very diligent about looking at the overhead. We don’t expect any kind of broad-based reduction in force. We are going department by department and trying to drive efficiency.”
Source: Jason Schreier, GamesIndustry.biz
