Over time, it will be more difficult for small businesses to compete in the game
Speaking to investors on the company’s first quarter 2022 earnings conference call, Take-Two CEO Strauss Zelnick addressed the topic of mergers and acquisitions (M&A) in the games industry. The CEO of Take-Two admitted that a few opportunities had been missed, obviously referring to Codemasters, which the company attempted to buy before Electronic Arts stepped in and got the deal for a whopping $ 1. , $ 2 billion.
We haven’t seen any change in the market yet. And valuations remain frothy, I think because of the growth of the sector and the enthusiasm around the sector. However, our discipline has really borne fruit over the past 14 years, it’s wood, we have not made a failed acquisition. Our acquisitions pay off, usually right away. Sometimes it can take a little while. But we are happy to have made all the agreements that we have made. We missed a few that we would have liked to have done, but frankly, not that much.
Take-Two CEO Strauss Zelnick also suggested that it will be increasingly difficult for small businesses to compete in the future.
I think you raised a good point, which is that over time it will be more difficult for small businesses to compete in space. And I think it will be true, the answer will be yes, both on the mobile and on the console, the necessary resources are important. The risk profile is important. And, the story of the entertainment industry is that over time, those who are very creative become very successful. Those who succeed get bigger, those who are bigger have the opportunity to acquire smaller businesses. And as long as the focus remains on creativity, innovation and efficiency, and as long as the culture that made the company successful in the first place is maintained. There is an opportunity for continued success, even with a ladder. And that’s certainly how we see ourselves and how we see our future.
It’s likely that Take-Two’s CEO isn’t really referring to independent developers, as this slice of the market is stronger than ever. In all likelihood, Zelnick referred to the AA or midrange, which is indeed slowly being eaten away by bigger companies like Microsoft, Sony, Tencent, and Embracer.
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