“Recurrent consumer spending,” a.k.a. the encompassing term for virtual currency, microtransactions, and premium downloadable content, continues to thrive in the video game industry. They’re a massive source of income for Take-Two Interactive, which owns two major gaming companies, 2K and Rockstar Games. At the company’s latest earnings call, CEO Zack Strauss said that the company plans to implement more of the same methods in its future titles.
Strauss, in a response to an investor’s question, said that the basis for the company’s revenue increase in recurrent consumer spending was found in Grand Theft Auto Online. The open-world area and constant stream of content kept players players hooked years after the game’s debut.
“One of the things we learned is if we create a robust opportunity and a robust world in which people can play delightfully in a bigger and bigger way that they will keep coming back, they will engage, and there’s an opportunity to monetize that engagement,” he said.
In the reports for the second quarter of the 2018 fiscal year, recurrent consumer spending amounted to 48% of the company’s total net value. It grew by 66% when compared to last year’s quarterly earnings. The largest contributors in this area were the company’s NBA 2K titles and Grand Theft Auto Online. Both titles feature in-game currency, which you can get through gameplay, although there’s an easier method that involves paying even more real-world money. In a few minutes, you can pay a few dollars to get better items that would otherwise take hours to play in order to get the same thing. Strauss aims to use the feature in future Take-Two games.
“We aim to have recurrent consumer spending opportunities for every title that we put out at this company. It might not always be an online model, it may not always be a virtual currency model but there will be some ability to engage in an ongoing basis with our titles after release across the board. That’s a sea change in our business...it’s been transformative for us, and the only reason it’s transformative for us is because it’s transformative to our consumers. The business, once upon a time was a big chunky opportunity to engage for tens of hours, or perhaps a hundred hours has turned into ongoing engagement. Day after day week after week. You fall in love with these titles, and they become part of your daily life.”
Take-Two isn’t the only company that’s using this method in order to gain more revenue. One of the most popular methods is the introduction of the crate system, which is in Early Access games such as PlayerUnknown’s Battlegrounds and Fortnite, and it’s already in major titles including Star Wars: Battlefront II and Call of Duty: WWII. Take-Two’s next major release is coming next in the form of Red Dead Redemption 2. Similar to Grand Theft Auto V, the western-based game will also have a multiplayer component. Rockstar Games hasn’t released further details about it, but you can expect it to include some sort of microtransactions as a way to keep Take-Two’s coffers full.
