GTA Exec Will Make Even More Money If People Keep Buying Microtransactions
Take-Two, the parent company of GTA developer Rockstar Games, has announced it has extended CEO Strauss Zelnick's contract through 2029. Under the terms of his new deal, Zelnick could earn more in bonuses if the company can continue to grow its microtransaction business.
The fact that an executive's pay is tied to a performance-based metric is not uncommon in the technology space. For example, Microsoft CEO Satya Nadella's contract has a clause thatlets him earn more money when more people sign up for Xbox Game Pass. These types of performance-based incentives are offered to executives in an attempt to motivate them to maximize returns for shareholders (and enrich themselves, too, in the process).
A filing with the Securities and Exchange Commission says Zelnick could earn an additional «performance award» of more stock units if Take-Two can reach a certain «operational performance metric» pertaining to recurrent consumer spending (RCS).
RCS is Take-Two's terminology for «ongoing consumer engagement,» which covers revenue from virtual currency, add-on content, and in-game purchases. In essence, Zelnick stands to potentially earn more money if microtransaction sales in games like GTA Online and NBA 2K continue to climb.
RCS is a massive business for Take-Two. For the latest quarter, Take-Two earned 61% of its total net revenue from RCS, amounting to about $550.8 million of the $903.3 million that Take-Two made in total net revenue. Take-Two is due to release its next earnings report today, May 16, and this is expected to provide new numbers about RCS at Take-Two. Check back soon with GameSpot for more.
Take-Two's RCS figures are set to explode in the near future, one would think, when the company's $12.7 billion
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