Take-Two Believes China Trade Talks Could Help Video Game Industry

The current Administration’s trade talks with China could ultimately be a win for the video game industry, said Take-Two chairman Strauss Zelnick in an earning’s call Wednesday.

“As we look at trade, our government is focused on the fact that taking care of intellectual property, which is America’s second biggest export after aerospace, is on the list of important things,” he said in response to a question on the topic. “I think you’ll begin to see some progress there. There’s a wonderful opportunity for us in China, right now.  And if regulation is softened there’d be an even greater opportunity. But we understand we have to work within the environment that we find ourselves in there.”

The comments come as the Chinese government comes out of a regulatory overhaul that slowed the approval of a variety of entertainment products, including video games.

Zelnick said that the company is very encouraged by those recent developments, especially in regard to how well the company’s “NBA 2K Online” is doing there.

“We think Asia is an enormous opportunity,” he said. “Specifically, China’s a great opportunity. We’re gratified that game approvals have been re-launched under a new method. We feel cautiously optimistic that there’s great opportunity and as a result Tencent and others are engaging in developing new distribution platforms.”

Earlier in the week, Electronic Arts also spoke during its earnings call on the impact China’s regulations have had on the company and how these recent changes have presented more opportunity.

“I think as everyone would acknowledge, China is a very particular marketplace,” EA CEO Andrew Wilson said. “We certainly see robust growth opportunities for “FIFA” but we also know that we did a small partnership deal around “Command & Conquer” mobile game recently that is performing very, very well in China. We know that the Plants vs Zombies brand is very strong in China as is the Need for Speed brand. And as that market continues to evolve and mature, we are seeing that brands like FIFA, brands like Need for Speed, Plants vs. Zombies, Command & Conquer and potentially The Sims, may have tremendous appeal there and working through plans on how we execute against that over time.”

Blake Jorgensen, EA’s CFO and COO, added that while the company is being more cautious with China, “some of the regulatory hurdles are starting to get cleared across the industry which I think will help us speed” things up.

“We do view that the long-term play there is a positive one particularly with the growth of soccer in that marketplace.”

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