The high price of video game hardware and the looming threat of further increases is still casting a shadow over the future of gaming for consumers. And while video game executives, generally, are not folks you’d expect to be particularly fussed about these cost increases, especially if they’re profiting off of them, the CEO of Take-Two—owner of Grand Theft Auto 6 studio Rockstar Games—agrees that these price hikes are not a good thing. However, he’s not too concerned, because he believes we’re all going to be streaming our games on other devices in three years anyway.
This came from a lengthy answer given in Take-Two’s quarterly earnings call this morning by Strauss Zelnick, in response to a question about the rising cost of hardware. He began his reply by saying that the rising price of hardware is “not a good thing” because it means fewer people will have machines on which to play games, but that it won’t slow Take-Two down as a business, “because we’re delivering experiences that people want.”
But Zelnick continued with a really interesting response about streaming. First, he pointed out that the world is increasingly moving to open systems, as demonstrated by the rise of PC gaming over the last 20 years. Then, he continued:
With the advent of streaming—which we really do believe is around the corner in terms of having something that’s low latency, and really works well for consumers—machines that weren’t game machines before will become game machines. So, without regard to what happens in the console business, which is of consequence to us, of course, we see the overall install base as a practical matter growing materially. And if you believe in streaming, to be clear, we really do, and I’m happy to put a timeline on it. I think we’ll be in commercial streaming mode in three years, and by commercial I mean low latency. That can 10x the effective the install base. That doesn’t mean we’re going to 10x our revenue, and we wouldn’t project that we would, because obviously your avid consumers already have access to video game machines. But I do think it creates great opportunity for titles that are broadly desirable even outside of core markets, and we do have titles like that, obviously.
Zelnick has a history of being open and at times bold with his predictions about the general trajectory of the industry, and he’s been both right and wrong at different turns about that trajectory. This is an interesting one: game streaming on phones, tablets, PCs, and other devices has been a thing for years now, but a combination of latency issues and a preference for traditional controls and TV setups has inhibited it from really taking off in the AAA space. However, it has increasingly been floated as an alternative by analysts and experts amid rising hardware costs, and especially as consumers increasingly turn toward massive social experiences like Fortnite over more traditional, single-player experiences, it’s starting to sound like the scales may tip in streaming’s favor.
My question is, does this mean Zelnick is pondering putting GTA 6 on cloud streaming services somewhat soon? It’s already not on PC at launch, which means it’s missing a good chunk of the market, as Zelnick himself as good as admits during his discussion of the rise of PC gaming. GTA 5 previously became streamable via Xbox Game Pass and via PlayStation+ as the technology began to improve, though it was removed from Game Pass recently. It’s hard to untangle what this means when cloud streaming itself is still such a murky field, but I’m leaving myself a reminder for three years from now to check back and see if Zelnick’s prediction came true—and what his company did with GTA 6 in response.