Take-Two CEO Hints at Potential Future Acquisitions of Game Development Studios

Take-Two Interactive is poised to rake in a significant amount of cash with the upcoming release of Grand Theft Auto VI on November 19. So, what’s the plan for all that cash? During a recent investor call, CEO Strauss Zelnick hinted at the possibility of acquiring another game studio.

This discussion arose after the company shared its full fiscal year earnings. When a representative from Baird inquired about how the anticipated revenue from GTA VI would be utilized, particularly regarding potential returns to shareholders through methods like share buybacks, Zelnick laid out three main avenues for capital use.

First on the list was “supporting organic growth,” which translates to developing more games—a strategy Take-Two has successfully pursued and will continue to embrace. The third option, returning capital to shareholders, is also a familiar practice for the company.

However, the second point Zelnick emphasized was “inorganic growth,” referring to the acquisition of other companies. He elaborated on this strategy, making it clear that any acquisitions would be “selective” and strategically aligned with their creative vision, focusing solely on studios that can produce games. He cited the recent acquisitions of Zynga and Gearbox as examples of this successful approach.

“I’m proud to say that all of our acquisitions have turned out to be creative and successful in our nearly two-decade period,” Zelnick remarked. “That’s pretty breathtaking for corporations; it’s not generally the case. And I think that’s because we’re immensely disciplined. You’re not going to see us doing deals hand over fist, but assuming our balance sheet continues to improve, I think you could imagine more inorganic growth in the future as well. We already indicated in our release today that we expect to be in a net cash position by the end of this fiscal year.”

While he didn’t delve into specifics, this certainly suggests that Take-Two is considering acquisitions, though the exact targets remain unclear. One potential candidate could be Remedy Entertainment, especially since Rockstar is collaborating with them on a remake of the Max Payne series. Other possibilities might include parts of EA or Ubisoft, with EA currently facing an acquisition by the Saudi Arabian government and Ubisoft potentially open to selling off a studio or two as it works on stabilizing its finances.