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Take-Two CEO: U.S. gov't needs to take a stand on China's game trade

Take-Two CEO: U.S. gov't needs to take a stand on China's game trade

September 13, 2018 | By Alex Wawro




" Our government actually does need to take a position with regard to our trade with China. Because we have a completely odd and unequal situation [...] by the way the other backdrop is, China has been stealing our intellectual property for a really long time. Those things just have to change."

- Take-Two Interactive chief Strauss Zelnick, speaking at a Goldman Sachs conference earlier this week.

In the middle of a wide-ranging interview at a Goldman Sachs conference this week, Take-Two CEO Strauss Zelnick answered a question about the company's plans for China with guarded optimism.

"We have a solid business, albeit a small business, in China," Zelnick said, noting that the company operates free-to-play games like NBA 2K Online there, and plans to launch Kerbal Space Program on China's WeGame platform in the near future. "It's no secret that the Chinese government changed the venue for approving game titles, and has basically slowed or shut down approvals for a period of time. [That] does not affect us because the games that we're bringing to market are approved."

But while Zelnick seemed bullish about a timely end to China's current freeze on game approvals, he sounded less optimistic about the future of Western game companies doing business with China. While he believes it will grow easier for Western devs to release games in China, he called out the U.S. government for not doing more to support the game industry in its efforts.

"I have no doubt approvals will start up again. The real question is whether, and it really is a whether, there comes a point where the Chinese government says look we're not worried that bringing Western entertainment into this country is going to be a problem...I think they'll arrive at that conclusion. I think the barriers will come down, and that would have a massive effect on us," he said during the business conference.

"But I wouldn't recommend you underwrite to one man's opinion on this topic, because I could be completely wrong. We certainly do not underwrite to it. I just observed that the opportunity is huge if we move in that direction. And at the risk of being a little bit political, our government actually does need to take a position with regard to our trade with China. Because we have a completely odd and unequal situation where Chinese companies can come to the US and buy companies, no problem. And if they don't want to do that they can bring a title here and market and distribute it, no problem, and keep all the proceeds. 

"We, in order to go to China, have to have half of our business owned by a local company," he continued. "The good news is that they provide expertise, which is great, and we have great relationships with companies like Tencent. We're thrilled to be in business with them. But we don't have a choice, to be clear. And furthermore, we need government approval, which is politically driven. And I'm not sure why the US government feels that's an okay thing to do with our second largest export category after aerospace. And I would observe that the days when we were borrowing money from China to buy oil in the Middle East, those days are basically gone. And I think the political landscape has to reflect that....by the way the other backdrop is, China has been stealing our intellectual property for a really long time. Those things just have to change."

While his concerns about piracy and the difficulty of breaking into the Chinese market echo complaints game devs have been voicing for years, it's interesting to hear Zelnick call on the U.S. government for aid addressing them. If you'd like to hear more of Zelnick's comments, you can check out the full webcast of his interview.



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