The boss of Take-Two has suggested the video game industry will be in “commercial streaming mode” within three years — but for video game streaming to matter, it will have to run GTA 6 just as well as consoles do.
During an investor focused Q&A following the release of Take-Two’s latest financial report, CEO Strauss Zelnick was asked for his thoughts on the video game industry as it buckles under the pressure of skyrocketing chip costs, which have forced Sony and Microsoft to raise the price of their consoles and potentially delay the launches of the PlayStation 6 and the next-gen Xbox, codenamed Project Helix.
Zelnick admitted the rising cost of hardware “is not a good thing,” because cheaper hardware means more hardware in people’s hands, which is what software companies desire. But he suggested the advent of video game streaming will go a long way to tackling this problem.
Video game streaming is nothing new, of course, and is currently available across most of the major players in the video game industry in some form. However, it is still seen as offering a poor video game experience compared to playing locally, with concern over responsiveness, fidelity, and latency. Zelnick, though, believes high quality video game streaming is “around the corner,” and even put a timeframe on it being able to offer low latency gaming.
“With the advent of streaming, which we really do believe is around the corner in terms of having something with slow latency and really works well for consumers, machines that weren’t game machines before will become game machines,” Zelnick predicted.
“So without regard to what happens in the console business, which is a consequence to us of course, we see the overall installed base as a practical matter growing materially. And if you believe in streaming — and 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 within three years. And by commercial, I mean low latency. That can 10x the effective install base.
“Now it doesn’t mean we’re going to 10x our revenue, and we wouldn’t project that we would, but 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.”
In a follow-up interview with IGN, we asked Zelnick about his three year prediction, and whether he felt streaming would be able to run GTA 6 as well as consoles in terms of fidelity and responsiveness within that timeframe.
“I think for streaming to matter, it would have to do that,” he replied. “But I was speculating about the timeframe and the technology by definition, because if it were in existence now, it wouldn’t be three years away. And I really could be wrong, but it’s my best guess. But sure, I don’t think it’ll be relevant to us if you can’t support titles like GTA.”
Both Sony and Microsoft are predicted to lean heavily on streaming in the coming years as they contend with the RAMpocalypse. “I just don’t have any insight as to what the console manufacturers have planned, but it wouldn’t at all surprise me if part of what they plan is streaming,” Zelnick offered.
Last month, Microsoft launched a test for ad-supported Xbox game streaming, promising the ads wouldn’t interrupt gameplay. “For many players, the device they already own now allows them to stream games with Xbox,” Microsoft said at the time. “Cloud can also help Xbox One owners play newer games built for Xbox Series X|S without needing to purchase new hardware right away. That can be especially meaningful in places where consoles are harder to find or less affordable, giving more players another way to access great games on devices they already have.”
The test of ad-supported Xbox streaming arrived amid console price rises that are pushing some gaming hardware towards the $1,000 mark. In June, Microsoft announced significant price rises for Xbox consoles, blaming the ongoing “components crisis.”
“Last October, we increased Xbox console price by 20-70 in the U.S.,” Microsoft said at the time. “We hoped another price increase would not be necessary, and we have spent the last several months working with suppliers on options. Unfortunately, console storage and memory prices have increased by more than 2.5x and we expect another doubling by the fall of 2027.
“The entire consumer electronics industry is struggling with the current components crisis, but the effects are particularly hard on consoles. Unlike phones, computers, speakers, and other consumer devices, consoles are typically not sold at a profit, but instead for less than they cost to make.”
New Xbox CEO Asha Sharma has said the spiralling cost of new and existing consoles would require “radically different business models” over the coming generation. She added that the industry had “reached a point where it will be hard to imagine” mass audiences still being able to afford “thousands of dollars” for a new console generation.
The current PS5 and Xbox Series X and S generation of consoles have seen price increases rather than cost savings. Sony itself raised the price of PS5 consoles back in March, blaming “continued pressures in the global economic landscape.” Nintendo has also not been immune, and recently acknowledged it would up the price of Switch 2, just over a year after its arrival. And Valve has bemoaned its struggle to release Steam Machine at the price it had initially hoped, instead having to go for an eye-watering $1,049.
We’ve got plenty more from Zelnick today, including his comments on the GTA 6 price points, his defence of GTA 6 not launching on a disc, and Netflix’s timed exclusivity on the next GTA 6 trailer.
Wesley is Director, News at IGN. Find him on Twitter at @wyp100. You can reach Wesley at [email protected] or confidentially at [email protected].
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