The prerogative of Take-Two, with its expensive AAA developed titles, and Zynga, using cheaper committee driven social games, seem diametrically opposed. It shouldn’t come as a surprise then that Take-Two CEO Strauss Zelnick has serious doubts about Zynga’s fundamentally different business model.
“I would argue being the No. 1 player in (social gaming) is complicated, which is why Zynga hasn’t gone public yet because their metrics are sketchy,” said Zelnick. “Zynga is a direct marketing company, 97 percent of [users] don’t pay them anything, 3 percent who do. They churn quite quickly and they get new customers. That is their model.”
“I think they have disclosure issues,” added Zelnick, talking about user retention. “I think you are seeing their acquisition costs go up, marketing costs go up and they have very high churn.”
Source: Reuters
