Take-Two: Console Cycle Alive and Well

Take-Two: Console Cycle Alive and Well

The changing landscape of gaming has brought on the question of console cycles: is the typical five-year console cycle dead?

"I don’t think the cycle’s dead at all," said Take-Two chair Strauss Zelnick (pictured) when answering an analyst’s question during Monday’s UBS Global Media and Communications Conference.

"For the cycle to be dead, you have to reach a point where the machinery is perfect and you can’t make a material improvement, and we’re just not there. I don’t think we will be there until our interactive entertainment looks like live action. It looks really good, but it still looks like animation."

Zelnick said that graphics will "inevitably" be on par with live action, and games will also eventually move to 3D. "You have to envision a time when what we can do graphically reaches a limit, but I don’t think that’s anytime soon."

Some analysts and execs expect that this console cycle will be longer than previous ones, due to greater computing power of today’s consoles and the fact that companies like Sony and Microsoft are working hard towards reaching or maintaining profitability in their games businesses. Introducing a new console too soon would be detrimental to their business strategies.

One exec, Alex St. John with WildTangent, has repeatedly expressed the theory that the current console generation will actually be the last.

Zelnick disagrees with the notion. "There will indeed be another transition," he said. But the exec was hesitant to peg exactly when new consoles would arrive. "Now in terms of the timing, we certainly have not seen the end of the current hardware in terms of what you can do with it. I think the cycle could last longer, and the economy could affect that as well."

Take-Two CEO Ben Feder added that there is a strong "competitive imperative" coming from Sony, Microsoft and Nintendo "and anybody else that’s waiting in the wings."

"Almost everybody has got imperative one way or the other, to get something else out there or to exit the business. … Competitive pressure is going to force the players to innovate. They have to."

Feder added, "That said, I don’t think Sony or Microsoft have the appetite right now to launch any platform."