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Take-Two: 'Retail Is The Channel For The Foreseeable Future'

Speaking to investors today, Take-Two's Strauss Zelnick and Ben Feder said one of the "lessons" learned from GTA4's The Lost and Damned is that "retail remains our primary channel" -- but downloadable content is going to grow.
Publisher Take-Two took an uncommon step in releasing Rockstar North's sizeable Grand Theft Auto IV expansion The Lost and Damned as initially download-only, but company chairman Strauss Zelnick says retail is still top dog for now. "One of the lessons" of that release, said Zelnick in a conference call following Take-Two's latest financial results, is that "it's clear that retail is the channel for the foreseeable future." Perhaps drawing from that "lesson," the next GTA4 expansion, The Ballad of Gay Tony, will see a simultaneous release online and as a retail package with The Lost and Damned. Said CEO Ben Feder, "We're a pioneer on downloadable content with the two episodes for GTA4. At the same time, retail remains our primary channel, so we're making those titles available on a disc." Feder added later that retail is becoming increasingly consolidated, with the big players getter bigger and edging out their smaller competitors. "We are seeing, at least in the US, a greater concentration in retail, so the top five retailers are taking more market share," said Feder. "[It's] too early to call a trend, but it would not surprise me to see further concentration of retail." Still, said Zelnick, the growth of the downloadable arena is undeniable, and Feder observed that with the "more open system" of digital distribution versus retail, higher margins are possible. "There is a download component" for most of the company's games, Zelnick said, "and there will continue to be a download component."

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