According to a recently leaked contract extension, Strauss Zelnick will remain the CEO of Take-Two Interactive into 2029. Moreover, a large percentage of his bonus will be tied to players using in-game microtransactions and (potentially) NFTs.
Axios reports that Zelnick’s multimillion-dollar pay packages will include performance incentives related to the company’s top priorities. In fact, one of Zelnick’s goals will be focused on “recurrent consumer spending” (RCS), which involves players purchasing add-on content, in-game items, and virtual currencies. This could even include NFTs at some point in the future according to the SEC filing.
Axios said that Zelnick’s RCS goal and other incentives could net him millions of dollars in stock annually. This is not the first time Zelnick’s bonuses have been linked to RCS incentives. Last year, Zelnick would have lost out on a $3.9 million bonus if the company had not been able to achieve its RCS goals.
The Profit‘s Take:
Strauss has been very vocal about not having a lot of interest in web3 gaming. However, these incentives could drive Take-Two in a very different direction when compared to the route it usually goes. Traditionally, Take-Two spends years making $60 games that are works of art that provide fans with great experiences. However, if some of his compensation is tied to microtransactions, you can imagine that will change the DNA and thinking of the company. This is clearly tied to their mobile acquisition. If you’re a company that wants to align with short-term goals like stock performance, you end up being led by a Bobby Kotick. While the damages may not be clear today, they will become very obvious over the next five to ten years when that happens. I like this better than tying Strauss’ compensation to Take-Two’s stock performance. You should focus on creating a good business and product while the stock price takes care of itself. With that being said, I don’t think microtransactions are important to building a good gaming business.
(All information was provided by Axios)