Take-Two CEO Strauss Zelnick: In-Game Ads in Premium Titles Would Be "Unfair," US Revenue to Drop to 20-25%
TL;DR
- Take-Two Interactive CEO Strauss Zelnick told The Games Business that interstitial advertising in $70-80 premium games would be "unfair" to players, drawing a clear line between ad-supported free-to-play titles and paid releases where ads have no place.
- Zelnick outlined an ambitious global expansion strategy, predicting Take-Two's US revenue share will fall from 65% to 20-25% within ten years through localisation, mobile distribution partnerships, streaming services, and geo-pricing tools targeting underserved markets in India, Africa, the Middle East, Asia, and Latin America.
The Take-Two Interactive CEO sat down and covered enough ground to fill a strategy document: advertising, global expansion, AI tools, and what investors consistently get wrong about the games industry.
Where Zelnick Draws the Ad Line
The context was a conversation about advertising revenue in games, specifically analyst Matthew Ball's view on the significant potential for ad revenue in sports titles like NBA 2K. Zelnick's response is more nuanced than a simple rejection.
"For free-to-play titles, yes," he said. "For titles for which you've paid $70 or $80? No."
He acknowledged that NBA 2K does carry some advertising, but framed it differently: "We have some limited advertising inside games like NBA 2K because it fits with the vernacular. You want to see advertising in a stadium, because you would if you were there in real life. But that's not a big economic contributor."
"It's difficult for me to believe that we would want to have interstitial advertising in a game that someone paid $70 or $80 for. It would seem unfair." He's framing it as a matter of what players are owed when they've already paid.
The Global Revenue Shift
The more strategically significant portion of the interview is Zelnick's prediction about where Take-Two's revenue will come from in a decade.
Right now, 65% of revenue comes from the United States. Zelnick thinks that number will be 20-25% within ten years, with the remainder coming from markets the company currently underserves. He was specific: "There's this massive population that loves interactive entertainment that we're not really serving. For example, India and Africa. I would argue we underserved the Middle East. We certainly underserved much of Asia and Latin America. We need to change that."
The pathway involves four things: localisation investment, mobile distribution partnerships, streaming service support, and geo-pricing with VPN risk tolerance. "We have to be willing to use our geo pricing tool, and take the risks that someone might use a VPN to circumvent our geo pricing, which is a risk we will take in limited circumstances."
The mechanics of getting there require PC to take a larger share of console releases, and mobile technology to extend reach to less advanced devices. Neither of those trends is speculative at this point. Both are already moving in the direction Zelnick describes.
If he's right, the US going from 65% to 20-25% would represent a fundamental reshaping of Take-Two's commercial identity. GTA VI launches into a market still dominated by Western spend.
On AI and Why Investors Keep Getting It Wrong
Google's Project Genie briefly spooked investors in publicly traded games companies. Zelnick was direct about his reaction.
"[The market's] reaction was somehow seeing it as a threat to what we do, when it's quite obvious that creation tools are beneficial for our industry," he said. His core argument: "I think the bear case for big entertainment companies is somehow that AI tools will mean everyone can create hits, but that doesn't stand to reason. These tools may help you create assets, but that won't help you create hits. There are loads of assets out there now. It doesn't matter if you push a button to create an asset, or it takes you six weeks; at the end of the day, you have an asset. And thousands of mobile games are launched every year, and there are only a handful of hits."
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