Take-Two: the Red Dead Redemption gamble has paid off
Investing heavily on Red Dead Redemption was a risk for Take-Two. There was no guarantee that the public would buy into the concept of the game, so it could easily have ended up an expensive flop. Ben Feder, CEO of Take-Two, agrees and he has been speaking to VentureBeat of his delight that the gamble has paid off.
The company in the past has been hugely reliant on the Grand Theft Auto franchise to keep their profits looking rosy, so they decided a few years back to make an extra effort to diversify their line-up.
“We set out to diversify the product line three years ago. And today, Take-Two is more diversified than at any other point in its history. Having a diverse set of brands allows us to pursue growth opportunities.”
It was a wise move on their part because a failure to diversify could have left the company exposed had the appeal for Grand Theft Auto waned. While diversifying was important, it didn’t stop Red Dead Redemption from being a major gamble. As Feder says, “There is no average cost to make a game. It costs a lot.”
“The title was under development by the time I came to the company. It’s a big bet for sure. As it turns out, it paid off. I always look at the internal rate of return for our products. Even after the high cost of development, it’s going to contribute nicely to profits. In a way, it doesn’t benefit anybody to look back on it other than to say it paid off in spades. In the process, it has created a new franchise for the company.”
Red Dead Redemption’s healthy marketing budget was as much responsible for its success as its quality. This isn’t a slight on the game, as it’s fantastic; it’s simply recognising the power of marketing. Feder says that Red Dead Redemption had the most “robust” marketing plan he had ever seen.
It was a marketing campaign which aimed to put out as many photos of lead character John Marston as they could. They hoped to make Marston iconic to the gaming public as other Western heroes such as Clint Eastwood are to Spaghetti Western fans.
The impression is that Take-Two is looking better balanced following the success of Red Dead Redemption. It no longer feels like they would struggle should they not have Grand Theft Auto to rake in the money.
Outside these two games, they also have a host of other well known franchises such as BioShock, Civilisation, Max Payne and NBA 2K. They have Mafia II on the way and that has been generating quite a bit of interest, so Feder can be very happy with his company’s position in the market.