Take-Two CEO talks China
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Take-Two CEO talks China

Strauss Zelnick, chief executive officer of market-leading video game company Take-Two Interactive, recently attended the Goldman Sachs Communacopia conference, where he took the time to address the challenges the industry faces in China. A big part of it boils down to this: Chinese video game makers can expand overseas without any hurdles; but for western companies to operate inside China, they have to have a Chinese partner.

In the last six months, Take-Two’s share price has appreciated by 36%

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Source: Yahoo Finance

Zelnick told listeners: "We have a completely odd and unequal situation where Chinese companies can come to the U.S. and buy companies no problem in our space. And if they don't want to do that, they can bring a title here and market it and keep all the proceeds. In order to go to China, we've have to have half our business owned by a local company in China. The good news is they provide expertise. We are in business with companies like Tencent and we are thrilled to be in business with them, but we don't have a choice to be clear."

Zelnick added that the process of releasing games in China was subject to political approval (something Tencent has struggled with this year) and that “China’s been stealing our intellectual property for a really long time. Those things just have to change.”

That does not mean, however, that he favours the current trade war. He noted that it hadn’t had a manifest impact on the entertainment sector, but that “I’m not sure why the U.S. government thinks that it’s an OK thing to do with our sector.”

Worries with China aside, Zelnick’s focus includes the upcoming release of Red Dead Redemption 2, widely expected to be the industry’s biggest launch this year. That game hits consoles at the end of this month.

Dominion holds Take-Two Interactive in its Global Trends Ecommerce Fund.

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