Take-Two CEO's big microtransaction bonus

Take-Two CEO Strauss Zelnick will remain in charge of the publisher of NBA 2K and Grand Theft Auto into 2029, according to a new contract extension. And more of his pay than ever will be tied to in-game microtransactions, which may include NFTs.

Why it matters: Gaming CEOs’ multimillion-dollar pay packages often include performance incentives that help articulate their company’s priorities.

• Recent notables include goals for the CEOs at Activision and Ubisoft tying some pay to hiring more women and lessening their company’s carbon footprint.

State of play: One of Zelnick’s goals, tied to “recurrent consumer spending,” (RCS) involves player purchases of add-on content, in-game items and virtual currency. The company’s definition shared in an SEC filing yesterday includes all of that and the sale of NFTs.

• Take-Two hasn’t hidden the fact that they want players to keep buying more and more things in their games.
• Their top titles, including NBA 2K and GTA Online, are famous — and notorious — for being loaded with microtransactions that some users say make them feel nickel-and-dimed.
• But many players buy in. Take-Two generated $548 million in RCS in the last three months of 2021, more than it made from the sale of full games.

The details: Zelnick’s RCS goal, along with other incentives, can net him millions of dollars of stock each year.

• The incentive isn’t new, just tweaked, with RCS growth weighted more heavily than it used to be.
• And it’s been lucrative. Last year, Zelnick and company president Karl Slatoff together netted over $31 million in stock in performance incentives.
• If they’d missed the RCS target, they’d have gotten about $3.9 million less.

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