Strauss Zelnick: Look, we have to balance all the different elements that go into choosing how, where and when to distribute our titles. And as our titles enter the catalog, we can be flexible about how to distribute. We tend to support all emerging platforms as long as they serve consumers and as long as the terms under which we support the platforms make sense to us.
Andrew Marok: Great. And then maybe a little bit more of an esoteric question, but interested to maybe dig into that hypercasual commentary. Is there anything that’s maybe changed in the last few months or quarters with player behavior in hypercasual games that they’re now willing to do in-app purchases?
Strauss Zelnick: All about quality. I think Rollic has been really focused on making more and more robust titles. Remember, hypercasual came about as a business where you’d actually look at hundreds of games a month and put them out into the market and see what would stick and then a game would stick for 3 months and then roll off. And what’s happening now is Rollic has title. Rollic, we believe, is a leader in the space, has titles that are much more durable and long-lasting and turning into games that could be games that last for years. We hope that, that will happen. And as those games are more durable and offer more playing value to consumers, there’s an opportunity in certain of those games to have in-app purchases, so really, moving from hypercasual to hybrid casual.
But it’s all about quality and meeting the consumer where they are. And the story of the entertainment business is always a move to quality. And remember, we’re still, in many ways, in the nascent business. Interactive entertainment is roughly 30 years old, mobile’s roughly 12 years old, and these are early-stage businesses. And they started off as glorified toy businesses and then they turned into entertainment businesses and now they’re year-round entertainment businesses. All of that’s great news for a company like ours. We are the number two pure-play interactive entertainment company on earth, and it’s still early innings. And we’re seeing a lot of movement in mobile. Our 3-part strategy includes the word innovation. And innovation means that even if you start as hypercasual, if consumers want you to go upmarket and give them something that’s deeper and more compelling and more long lasting, you have to be there to do it.
I would say our hypercasual team, led by Barak Verdal in Istanbul, is first class.
Andrew Marok: Great. Appreciate the detail.
Operator: Our next question is from Benjamin Soff with Deutsche Bank. Please proceed.
Benjamin Soff: Hey, guys. Thanks for taking the question. A follow-up on the GTA Trilogy for mobile. Does this provide a blueprint for how to bring more of your titles to mobile in the future? And just curious if you see an opportunity for additional partnerships with Netflix for additional mobile titles going forward as well? Thanks.
Strauss Zelnick: We – I’m not sure this is a model for mobile distribution, because ultimately, it all depends on how you define mobile. We think of mobile as a game that you typically play on your phone, and we have a big portfolio of games like that. And we’d love to do more with Netflix, who wouldn’t, as long as the consumers are happy to be there and as long as the economics of those arrangements make good sense.
Operator: Our next question is from Drew Crum with Stifel. Please proceed.
Drew Crum: Okay, thanks. Hi, guys. Good afternoon. So on NBA 2K, I think it was enjoying some pretty strong engagement in RCS trends into the early part of fiscal 3Q, at least. Any thoughts or explanation around what transpired thereafter? And just any more additional color you can give us in terms of your expectations for fiscal 4Q.
Karl Slatoff: So – I’m sorry. Sorry, Strauss. The NBA has – the game has been incredible for NBA 2K24, and that continues to be the case. We still have very strong momentum around RCS, also driven specifically by our Season Pass. The Gen 9 SKU is performing incredibly well. We’ve got double-digit growth over 2K23 at this point. Yet, the real story here is that Gen 8 is actually underperforming our expectations. And I think as people transition more towards Gen 9 and experience all that NBA, the franchise, has to offer in the Gen 9 SKU, then you’re going to see continued growth in that franchise. So we feel really great about where the engagement is. Engagement in the title is fantastic. It really is – any sort of softness that we’re seeing is really a story about the Gen 8 product at this point.
Drew Crum: Okay, thanks.
Operator: Our next question is from Martin Yang with Oppenheimer & Company. Please proceed.
Martin Yang: Thank you for taking my question. The two-part question regarding GTA trailer’s reception, do you see a meaningful uplift for themselves due to the trailer performance on YouTube? And then given that strong performance, do you think that – could be future marketing events for GTA could be planned in conjunction with potential updates from other games, GTA, Red Dead? Does that change your view on how to market to GTA VI in the next 12 months?
Strauss Zelnick: Look, we’re really gratified that the announcement of the trailer was a huge event online, and then the trailer debut between YouTube and other marketing partners set a record for a video to view. So we couldn’t be happier or more excited by the initial trailer. And I do think that excitement around GTA VI has had a halo effect on the entire franchise. We’ve now sold in 195 million units of GTA V, and GTA Online continues to perform above our expectations. So I do think all things GTA lead to more excitement. As far as the marketing programs, I think Rockstar is particularly expert in marketing their titles and, I think, is considering all the appropriate angles.
Martin Yang: Got it. Thank you. And then another question regarding marketing is we’ve seen Judas and Top Spin with trailers and the revealers or teasers without a release date. Is there overall philosophy to market new games change? Or is it still largely based on studio level decision on when they will release or announce the release dates for new games?
