Take-Two boss warns it ‘may not end well’ for companies betting on blockchain-based metaverses

Take-Two Interactive CEO Strauss Zelnick has expressed his scepticism of the term ‘metaverse’, warning that it may end badly for companies trying to capitalise on the buzzword.

While there’s no universally accepted definition, the ‘metaverse’ is broadly defined as a network of 3D virtual spaces where users can socialise, play and work, and some envision it as a successor to the mobile internet.

Companies such as Sony, Epic, Lego, Meta, Krafton, Bandai Namco and Microsoft are all planning their own takes on the concept.

When asked about the concept in a new video interview with GamesIndustry.biz, Take-Two’s Zelnick said he was sceptical of anyone “investing behind buzzwords” and argued that his company already had its own metaverses in games such as GTA Online.

“I’m always sceptical about buzzwords because they mean different things to different people, and people investing behind buzzwords probably don’t end up having great results,” Zelnick said.

“I’m not sceptical at all about huge, interactive, dynamic, entertaining worlds because our company is responsible for housing, minimally, three of them,” he replied. “The biggest on Earth, Grand Theft Auto Online, and Red Dead Redemption Online and then NBA 2K online, and others to come.

“So I’m a dyed-in-the-wool believer that people will go to digital worlds to be entertained, and if you offer a super entertaining experience I think people will flock to it.

“I think where my scepticism lies is every company suddenly believing that by saying the word ‘metaverse’ adjacent to their company’s business strategy, that means that somehow they’ll be transformed and nirvana is around the corner, and naturally that’s not the case.”

Zelnick pointed out that he’s particularly suspicious of blockchain-based metaverses, adding: “Entertaining people is really hard, building hip properties is incredibly hard. It costs a lot of money, it takes a lot of time and there’s a massive amount of risk to it.

“So when a company that didn’t exist two years ago launches with a white paper, a blockchain-based metaverse and sells hundreds of millions of dollars of digital real estate in a two-day period, sure, I’m a little sceptical.

“Because I have a healthy respect for how hard it is to entertain people within that real estate, and in the absence of giving people a reason to visit, I don’t know why the real estate has any value. And that seems to have been lost in the shuffle.

“But of course, ultimately, all speculations end – the question is not whether, the question is when, and when lots of money is being thrown at a word, and there is some of that happening, you can probably guess how it’s going to end for a lot of people, and I think the answer is ‘not well’.”

Zelnick later clarified that he wasn’t saying that every metaverse will fail, simply that it’s no guarantee of success. He equated the situation with the dot-com boom of the late ’90s, pointing out that while it led to a number of huge success stories like Meta, Google and Amazon, “a lot of companies failed” too.

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“It would be an overstatement to say that nothing will succeed that’s focused on building a new, massive digital experience,” he explained. “Of course I believe there will be numerous successes and hopefully we’re among a continuing group of companies that will succeed.

“But there will be failures as well, and just calling something a ‘metaverse’ or ‘metaverse-adjacent’ is no guarantee that value will be created. In the absence of creating value for the consumer, there’s nothing there.”