“With interactive entertainment, you not only have great graphics, great stories, great characters, great gameplay, but you can consume the experience with your friends and with communities, both existing and new, all around the world in real time.”
Strauss Zelnick serves as Chief Executive Officer and Chairman of the Board of Directors of Take-Two Interactive Software, Inc. In addition, he recently served as Interim Chairman of The CBS Corp. Board of Directors.
Quitting a role as a film studio president in order to launch a video game company 25 years was a major risk, but this relatively new genre of entertainment showed signs similar to motion pictures in the 1920s. On top of the meteoric rise in video games and interactive entertainment of the last couple decades, the pandemic has accelerated its growth and adoption as people spend more time at home. The technological developments of video games have made human interaction central to its experience, offering a social element for many who wouldn’t have it during a stay-at-home period. “We like to consume entertainment with other people; we like to participate with other people; we like to watch with other people.”
Esports represents a new frontier in the video game space with over 250 million viewers. It even serves as the primary entertainment for 125 million. The industry will continue to grow and likely evolve into an ecosystem similar to the professional sports leagues.
LISTEN AND SUBSCRIBE
SPEAKER
Strauss Zelnick
Chief Executive Officer & Chairman
Take-Two Interactive
MODERATOR
Anthony Scaramucci
Founder & Managing Partner
SkyBridge
EPISODE TRANSCRIPT
John Darsie: (00:07)
Hello everyone and welcome back to SALT Talks. My name is John Darsie. I'm the managing director of SALT, which is a global thought leadership forum and networking platform at the intersection of finance, technology and public policy. SALT Talks are a digital interview series that we launched during this work from home period with leading investors, creators, and thinkers. And what we're trying to do during these SALT Talks is replicate the experience that we provide in our global conference series, the SALT Conference. And at our conferences and on these SALT Talks, we're trying to provide a window into the mind of subject matter experts, as well as provide a platform for what we think are big ideas that are shaping the future. And we're very excited today to welcome Strauss Zelnick to SALT Talks. Strauss founded ZMC in 2001, he has a long history of leading media and communications enterprises, and is deeply involved in originating investments, advising executives and guiding strategic and operational initiatives across all portfolio company investments.
John Darsie: (01:07)
Strauss serves as the Chief Executive Officer and chairman of the Board of the Directors for Take-Two Interactive Software Incorporated. In addition, he recently served as interim chairman of the CBS Corp Board of Directors. Prior to forming ZMC, Strauss was president and CEO of BMG entertainment. And before joining BMG, Strauss was the president and CEO of Crystal Dynamics, a producer and distributor of interactive entertainment software. He spent four years as president and COO of 20th Century Fox, where he managed all aspects of Fox worldwide and motion picture productions and distribution business. Strauss holds a BA from Wesleyan University, as well as an MBA from Harvard Business School and a JD from Harvard Law School, which he shares with our moderator today. He is the author of Success, a concise guide to having a life you want, and Becoming Ageless, two great books.
John Darsie: (02:07)
And Strauss is also a workout fanatic. And he has a few years on me, but he's in much better shape than me. That is for sure. Reminder, if you have any questions for Strauss during today's SALT Talk, you can enter them in the Q and A box at the bottom of your video screen on Zoom. And hosting Today's talk is Anthony Scaramucci, the founder and managing partner of SkyBridge Capital, a global alternative investment firm. And with that, I'll turn it over to Anthony for the interview
Anthony Scaramucci: (02:30)
Just pointing out John, that it's like calling your aunt a woman, that Strauss Zelnick is in better shape than you. I just thought I would just mention that before we get the-
John Darsie: (02:41)
I left you out of it, Anthony, but-
Anthony Scaramucci: (02:43)
You didn't have to overstate the obvious. Okay? So Strauss, welcome to SALT Talks. Great to have you on. You got such a story background, but I always ask this question. Tell us something about you that we couldn't learn from Wikipedia or from doing a Google search.
Strauss Zelnick: (03:07)
Thank you for asking, Anthony. It's great to be here. It's great to see you, although first seeing you in person. And Anthony, among his many attributes, is also share something that I pride myself on which is if you text Anthony, you get an answer in about 30 seconds. I try to do the same. And I will say that during this political period leading up to the election, that was a great source of information and at times comfort. So it's been-
John Darsie: (03:39)
Or misinformation, Strauss. Don't give him too much credit.
Strauss Zelnick: (03:41)
[inaudible 00:03:41]. I was basically lying to you with overconfidence [inaudible 00:03:46].
John Darsie: (03:46)
You could have heard him on election night, he was yelling at me. He said, "You were too confident. You made me confident. What were you doing?"
Anthony Scaramucci: (03:52)
I won at nine o'clock. It was a little dicey. Okay? But that was the whole Trump design. He was still trying to get all those votes get counted after the fact. Okay, fine.
Strauss Zelnick: (04:01)
Anyway, so it's great to be here.
Anthony Scaramucci: (04:04)
Let's move on. We were talking about you being a fatso, Darsie. Let's move on. Okay? We got other more important things to talk about. But guys, [inaudible 00:04:09].
Strauss Zelnick: (04:09)
So let's see. Probably the thing that you wouldn't-
Anthony Scaramucci: (04:11)
You grew up in mass, right? You're from Mass.
Strauss Zelnick: (04:13)
The thing that you wouldn't be able to tell from Wikipedia is that I started off wanting to be a performer. So even though I spent my whole life in media and entertainment specifically in the movie business, television business, the music business, the video game business, the broadcast television business, but like many people who find themselves in an executive position in entertainment, I started off wanting to entertain. The only problem was that... I had a small problem, which was an utter and complete lack of talent. So that's where I started off. So I was-
Anthony Scaramucci: (04:45)
[inaudible 00:04:45] did you go on an audition? Were you-
Strauss Zelnick: (04:46)
Oh, yeah. I was actually... I was a singer songwriter. I wrote lots of songs. And that was sort of my area of great interest. I was a novelist. And in fact my thesis at Wesleyan was creative writing. When I was in high school, I made money by being a magician at kids' birthday parties. And I also did some acting. And in fact, I just nearly missed getting cast in a major motion picture when I was 17 years old. So I went through a sort of, one of those group auditions and I was second to last and ultimately didn't get it. And they ultimately didn't make that picture, made it many years later, but not that particular one. So I had a number of sort of a near success experiences, but I just didn't have the talent for it. And I had the presence of mind to understand that before it was too late to turn my attention to the business side of the equation.
Anthony Scaramucci: (05:37)
But you stayed in media. You like media entertainment, you like that whole sector of the US economy. Why? Why do you like it so much?
Strauss Zelnick: (05:47)
Well, first of all, again, having fallen in love with the all forms of entertainment from the point of view of a potential creator or performer, the closest I could get was to being the business side, because I seemed to have some story for business. And this is true. Many people who work in the entertainment industry, I have an enormous respect for creative talent, for performers and for creators, and to be able to help them bring their amazing creativity and talent to audiences all over the world, it gives me enormous satisfaction. It's also not lost to me that there are some great business opportunities. And the one that's been biggest in my career has been interactive entertainment because for some reason, I was able to identify that as an opportunity when I was still in the movie business many years ago. And I took an enormous risk and did something no one ever does, which is I voluntarily left the position of president of a major film studio, took a 95% pay cut and moved to Silicon Valley and started a video game business well before it was sexy to do so.
Anthony Scaramucci: (06:55)
And what did you see? So what the vision was, people would spend more time at a video game than they would actually even at a motion picture? Or what did you see? What was the insight?
Strauss Zelnick: (07:05)
No. I think this is not so long ago. What I saw was, this is the beginning of a burgeoning entertainment business, and this has all the earmarks. So the motion picture business in the 1920s before there were sound movies and before there were color movies, but you could see that this was going to be a huge business. And there were a bunch of entrepreneurs who saw that and built what became today's major studios. And I thought the same opportunity existed about 25 years ago and I was part of that with Crystal Dynamics. That was my first video game business. The second one was at BMG Interactive and the third was of course, Take-Two,
Anthony Scaramucci: (07:49)
But things have changed for the entire entertainment landscape as a result of COVID-19. However, in the interactive space, one could argue that it's actually gotten better in some ways. It's perhaps more robust. What are the changes that Take-Two has experienced? Where do you think things are going? Am I correct in that observation? That's not me doing anything scientific. It's just me observing my children, what they're doing in this period of time.
Strauss Zelnick: (08:19)
Well, of course this pandemic has brought terrible tragedy and privation so many, and then we need to be mindful of that, respectful of that. And it's hard to want to take a victory lap in that context. That said, there's no doubt that sheltering at home caused people to consume more entertainment of all forms that they could consume at home. So it took an enormous toll on live entertainment and sports and benefited linear entertainment, motion pictures that you can watch at home television, distribution, music, and of course, benefited interactive entertainment as well. But it disproportionately benefited interactive entertainment. And I think the question you're posing is why would we get a disproportionate benefit? And I think the answer is that people realize it with interactive entertainment, you not only have great graphics, great stories, great characters, great gameplay, but you can consume the experience with your friends and with communities, both existing and new, all around the world in real time, as you're consuming the game.
Strauss Zelnick: (09:20)
And we like to consume entertainment with other people. We like to participate with other people, we like to watch with other people. What a great thing to be able to play a multiplayer game as a character and to compete with, or cooperate with Anthony, even though Anthony is a 100 miles away or a 1000 miles away or 3000 miles away. And you can do that with interactive entertainment. You can't do with anything else. People love watching movies with other people, but I don't think during the pandemic Anthony, you're sitting at home watching a movie and you're in a group chat with friends in France who are watching the same movie. But you specifically are doing that when you're playing Grand Theft Auto online. That's exactly what you're doing.
Anthony Scaramucci: (10:02)
Yeah. No, I think it's fascinating. Amazon's obviously trying to do that now with Amazon Prime to try to link you to other people while you're watching the movie, but you're not interacting, you're not competing, there isn't a story arc like there isn't Grand Theft Auto that you can actually participate in, which makes it very sexy, particularly to younger people. But I want to ask you this question because there's constant product innovation, you have PlayStation 5 coming out, Xbox Series X. Both of them are out effectively, a shortage on both of them. How do you guys adapt your business model to the hardware component to this stuff? Do you make the stuff sexier? Has it been more appealing? The graphics, where are you from a vision perspective?
Strauss Zelnick: (10:51)
Well, what's great about these new platforms is they give our creative folks the technical ability to build better experiences. Whether they load faster, or the graphics are better, or the interactions are more realistic because memory is better. And the rate of data transmission is faster, or what you can do graphically is deeper or all of the above. Business model doesn't really change, although certainly new technology has enabled new business models most specifically, the ability to keep consumers engaged in between big releases and then to monetize that engagement. But this new array of platforms, including upgraded PC platforms, really doesn't have much of an influence if any, on the business model.
Strauss Zelnick: (11:41)
It does however, potentially increase the size of the market when people say, wow, that NBA 2K21, that looks like real basketball. Step back from the screen just a little bit, squint a little bit, I can't tell the difference between NBA 2K21 and a basketball game. This is amazing. And you're going to see even more of that in the next five or 10 years. And I don't think it'll take 10 years. We will be able to create video games with computers that look exactly like live action. I'm not saying we will, by the way. People may still... Our creative folks won't necessarily choose to do that. We'll still have titles of like Borderlands looks like a graphic novel. But you'll be able to do that if you want to do that, and that's going to be very intriguing.
Anthony Scaramucci: (12:26)
You're bringing up an NBA 2K, which... My kids wanted me to ask you this question. I'm dying to ask you this question. It's about esports. And so, you have this contract with the NBA, you have NBA 2K and then you have the introduction of this new sports franchising even where players are playing in arenas, players are playing in Las Vegas. Is this a fad in your opinion, Strauss? Or is this the next frontier in sports and entertainment?
Strauss Zelnick: (13:00)
Well, for sure, it's not a fad and for sure it's a frontier. The question of course, is always how high is up and that I can't speak to. I know the 250 million people love watching esports. 125 million people say that it's a primary entertainment activity for them, but this is still not a heavily monetized market. The entire esports business is about a billion dollars. And most of that goes to one title, incidentally, not our title. I don't think esports will be found in 50 different leagues doing 50 different things, any more than professional sports are. I think you'll have five titles in the same way we have five big, massive worldwide sports that matter, or so. And I'm hopeful that in the NBA 2K league will be one of them because it's based on something that we know people love to participate in and watch, which is the NBA.
Strauss Zelnick: (13:53)
So unlike some of our competitors, we don't believe that we can put out an array of titles in it. Any given time, we can take a new intellectual property and turn that into an esport. I think that's going to be very difficult to do, but I remain immensely hopeful that the NBA 2K League will become a very big business over time. It's going to take a while. It's still a very, very small part of our business, not a material part of our business yet.
Anthony Scaramucci: (14:16)
So I want you to put your traditional entertainment hat on and your interactive hat on at the same time. And I want you to think about where we are in terms of COVID-19. And so, my friends in the media business or traditional media business are slowed down, there're delays in production, they can't release movies because many movie theaters are closed or there's only 25% occupancy in the movie theaters. And so, the first part of this question is, what do you think happens to that side of the entertainment industry? How quickly can it recover or is it permanently changed? And then the secondary element of the question is, and so how was that overflowed and impacted you at Take-Two and what I would call the interactive media side of the business.
Strauss Zelnick: (15:05)
Look, I think with WarnerMedia's announcement that they're going to go day and day to their digital platform, along with a theatrical release. That puts a fine point on the possibility that post pandemic theatrical distribution is going to be challenged on an ongoing basis, but that really wouldn't be a big change. That would just be an acceleration of a prior trend. And I think one of the things that many people have said is that the pandemic has accelerated prior trends. It's been great for ZMC because we try to bet on trends that we expect to come to fruition in 5, 10, 15 or 20 years. Well, acceleration is fantastic for the companies that we already own and interesting for the companies that we'd like to own. So I think theatrical distribution is challenged. Motion picture business has been a challenge business for a very long time, much longer than most people acknowledge.
Strauss Zelnick: (15:57)
And I think that will continue to be the case, but of course the television business has been, if anything, benefited. By sheltering at home, people are consuming more television along with more interactive entertainment. So I don't believe that we're seeing any kind of tragic consequence for legacy traditional linear entertainment. I think we're just going to see more happening that was already happening. And I think there'll be great opportunity for great creators, largely in the television space. I think if you want to dig in to what will happen to all the various subscription platforms and television, I think there's not going to be a winner takes all, and there's going to be a whole bunch of losers. That's a separate conversation.
Strauss Zelnick: (16:40)
Now juxtapose that against our business. Look, we're booming. The average age of our consumers, 37 or 38. People consume for the rest of their lives the entertainment they fell in love with it at the age of 17, you know that. You know that the music you like most, no matter what you say, is the music you loved when you were 17. The entertainment you loved at 17, that's always been your love. That will stay your love. So when you turn 39, you don't stop playing video games, but new people are coming into the market. That cohort's going to grow for the next 20 or 25 years just naturally. Does that mean that we do well? Not necessarily. We have to execute every day. We have to make hits, but it certainly is nicer to have meaningful tailwinds than headwinds. And the interactive entertainment space has loads of tailwinds. Again, accelerated by the pandemic undoubtedly.
Anthony Scaramucci: (17:30)
See Darsie, what Strauss is saying, that means that NSYNC is going to be in your life for the rest of your life. I just thought that I would [inaudible 00:17:39].
Strauss Zelnick: (17:39)
I hope so. NSYNC was one of my acts. So [inaudible 00:17:42].
Anthony Scaramucci: (17:42)
Yeah, I remember. That's I'm bringing it up.
Strauss Zelnick: (17:43)
Yeah.
Anthony Scaramucci: (17:44)
Just to let you know, Darsie, you when you're 95 years old, you'll be listening in NSYNC. Imagine that. So, Strauss before he can-
Strauss Zelnick: (17:51)
I still listen to James Taylor. So I'm sure it's true.
Anthony Scaramucci: (17:54)
[inaudible 00:17:54] who's kidding who.
John Darsie: (17:55)
North Carolina guy.
Anthony Scaramucci: (17:57)
Before he gets to me, I'm going to interrupt to keep moving. I want to ask you about Quibi, if I'm even pronouncing it right.
Strauss Zelnick: (18:04)
Quibi.
Anthony Scaramucci: (18:04)
Quibi. I thought it was a fascinating idea. Some of the smartest people I know were involved in it and it failed. And it was a billion and a half dollar loss and it failed pretty quickly. And so my question to you is, did it fail because of the idea? Did it fail because of COVID-19? Is it an idea ahead of its time? Or is it the DeLorean where it was just never going to catch fire?
Strauss Zelnick: (18:37)
Well, it's hard to say. I mean, the first thing is it's so tempting to be critical of someone else's failures and to claim here I am, I'm so smart and I knew it all along. Innovation is really hard and I have enormous respect for what Jeffrey tried to do, what Meg tried to do. And they... In record time, they were able to aggregate extraordinary talent and they took a chance. And for an array of reasons, it didn't work out. And again, it's tempting to be critical of those reasons. I think ultimately, launching any kind of consumer proposition in a big way is really hard. And I do think launching something that didn't exist before into the pandemic is very different than what we faced.
Strauss Zelnick: (19:30)
And we already had a business. We had a very successful business. We already had numerous successful titles. NBA, Borderlands, Grand Theft Auto, Red Dead Redemption, the list goes on. And so, we had an ongoing business generating consumer engagement. We could build that business. And of course, we were benefited by sheltering in place. But I can't say to you that had we tried to launch our business from scratch with loads of investment in mid-March, that it would have gone well. Seems to me it would have been very, very difficult. So I admire what they tried to do greatly. It's terribly unfortunate that it didn't work out and I think it may be that they were ahead of their time. And that remains to be seen. Now, look, our approach to innovation tends to be smaller scale. I'm very conservative. I hate losing money, so we tend not to make big splashy moves.
Strauss Zelnick: (20:28)
So we tend to make smaller incremental moves. And the good news is that making smaller, incremental moves, it means that you're unlikely to have significant losses. And I'm very grateful for the fact that in my career I haven't had any at all. I've always created a return for shareholders, I've never failed to repay debt. But equally you may lose the opportunity to have that extraordinary, massive groundbreaking win. And to each person, to each entrepreneur, their own style and approach.
Anthony Scaramucci: (20:59)
Now we're talking.
Strauss Zelnick: (21:00)
I pursue the style and approach that works for me, but boy, took a long time to create the success that we've had with Take-Two and the success that we've had with ZMC. As I like to say, the only overnight successes are other people's successes, certainly not mine and onto the next. But is short form entertainment one of the past to the future of entertainment? Unquestionably. Will it be realized in a way that's additive to what already exists on Snapchat, TikTok, YouTube and other platforms? Unquestionably. We have not seen the full expression of short form entertainment, not even close. So it may turn out that what was tried with Quibi will really inform what's tried in the future.
Anthony Scaramucci: (21:46)
Well, I mean, it just to give you such a how little I know. I didn't get the opportunity to invest in Quibi, but I would have invested in it. I thought that that was a brilliant idea. And I have an enormous amount of respect for Meg Whitman. I think she was a classmate of yours, right? Or was she at Harvard Business School with you or-
Strauss Zelnick: (22:02)
Not with me, but I think she did go to Harvard Business School. Jeffrey and I obviously, worked together in the motion picture business sort of at the same company, but we were on the board of the MPA together. And I've always obviously, admired what he's been able to achieve.
Anthony Scaramucci: (22:18)
It's just one of these things. When I was back in college, one of my cousins worked for AT&T and it was 1981 or 82. And he was explaining to me that we were going to be able to play Atari Pong over the phone lines. And he was explaining to me how it was going to work and then AT&T disbanded it. And I remember him saying, well, they disbanded it because it was too costly. They couldn't figure out a way to make it work the way we're making it work today in terms of the innovation. So I do think it's something just slightly ahead of his time. You mentioned ZM-
Strauss Zelnick: (22:52)
By the way, I worked at AT&T. My first desk job was a summer internship at AT&T.
Anthony Scaramucci: (22:57)
Out in New Jersey by, right. Or [inaudible 00:22:59]?
Strauss Zelnick: (22:59)
Across Basking Ridge, New Jersey.
Anthony Scaramucci: (23:01)
Yeah.
Strauss Zelnick: (23:01)
Best corporate cafeteria ever. I think that was in 1979 or 1980.
Anthony Scaramucci: (23:06)
Yeah. So my cousin's name is Michael Saka, not that you would have overlapped with him, but he worked there for many years. And he always said that the breakup of AT&T... And this is something we've had monopolist and anti-monopolist on SALT Talks to talk about these things. Because the breakup of at AT&T actually unleashed a tremendous amount of technological growth. All those patents, as you know, Strauss, from Bell Labs, there were licenses that were able to be doled out. And sometimes what happens is monopoly power suppressed technological innovation because they're making such great economic rent from their existing structure. You don't go from copper wire to fiber optic if you don't need to, so to speak.
Anthony Scaramucci: (23:49)
But what I want to ask you about ZMC, which is a private equity firm that you are also the founder of. You've mentioned it a few times. And you basically take a position, correct me if I'm wrong, that you're looking for the future. The portfolio of companies there is what is the next trend? It's sort of a private equity firm that sees around corners, if you will. So what things should we be watching for in 2021 and beyond, as you manage to grow that portfolio?
Strauss Zelnick: (24:20)
The theme that... We're theme driven. So we don't get books from bankers and say, well, that's interesting and then send in a bid. We pursued 10 to 12 investment themes at the time, then we proactively try to find companies that are operating within that theme. Companies we believe have great futures ahead of them, and then try to invest in those companies or buy those companies. And that's what we've always done. And that's led us to stay away from themes that we thought we'd be challenged in the early part of the 2000s. We didn't buy consumer magazines, we didn't buy newspapers, even though they were... believe it or not, sexy at that time. We didn't buy broadcast radio or broadcast television, even though that was very sexy at the time, of course, multiples have come way down. It's pretty hard to make a great return when you have multiple dilution.
Strauss Zelnick: (25:08)
We did however, invest in online market research before that was a thing and television direct marketing before that was really a thing. And we've invested in businesses that enabled the growth of mobile communications before that became obvious into such businesses. The theme that I am most excited about is the explosion of data which I would express this way, however much data you think consumer and enterprise will need in five years, you're wrong. It'll be more. There was an explosion of data and the consumption storage and transmission of data. And so, we're investing in businesses that enable the consumption, storage and transmission of data first and foremost. So it's hard to do because we're not buying stock and Facebook.
Strauss Zelnick: (26:02)
I don't think our limits would think that that was a very good thing for us to do for them. They can do that without us, if they wish. We're typically buying businesses that are enabling enterprises or software enterprises within that space. There are numerous other areas that we like, but that's the theme that I find most exciting. Or said another way, Anthony, you know those to be true. There're a lot of people who say the most exciting parts of the media business and the entertainment business are behind us. The 50 years between 1930 and 1980, that was really exciting.
Strauss Zelnick: (26:35)
I think actually the next 40 years will be the most exciting time for media and entertainment and that'll live mostly be supercharged by technology. I also think there are people who say we have the internet, we have digital communications, we kind of know what that looks like now. It's all pretty mature. And I think the answer is no, it's just the beginning. I'm on an iPad today, it's great device. But in 10 years, I'll be on something that's way better, way cooler, way lighter, way cheaper. Take a look at this device. This is a super computer in your hand, but in 10 years it won't be this form factor, it won't be this heavy. It'll be a much smarter, much better, it'll look and feel different. And that's just two examples that are close at hand. So what we're trying to do with ZMC is think about what does the world look like in 5, 10, 15, 20 years and skate to where the puck is going, not where it is.
Anthony Scaramucci: (27:33)
So for somebody that doesn't understand the transition from say 4G to 5G, people think that that's incrementally 20 to 25% more improvement, but it's way more massive than that. So how would you describe that to a layperson, the move from 4G to 5G?
Strauss Zelnick: (27:55)
The opportunity will simply be that you'll be able to do more with wireless connections than you can do now. So what can we do now with a wireless connection? Well, I don't know. Right now I'm in Westchester County in New York and sometimes I have conference calls when I'm driving from Westchester into Manhattan. And what are the odds that I can make a high quality conference call completely uninterrupted from Westchester and Manhattan? The odds are about zero. Well, 5G will make those odds much higher. Just as an example. Once you have full 5G coverage. Or if I wanted to do right now, I'm on a Wi-Fi connection and I get pretty good connections, pretty fast and pretty [inaudible 00:28:36]. But if my Wi-Fi went down and I had to switch to my cellular connection, it wouldn't be as good.
Strauss Zelnick: (28:41)
In fact, it's possible that my video would be really choppy, while with 5G it wouldn't be. So just think about it as more data, quicker. And all of the uses that you find are currently constrained by existing cell distribution, are less likely to be constrained with 5G. It's as simple as that. It's otherwise not a game changer, but the biggest game changer is if you want to have super high quality wireless connections right now, you basically need fiber. And then you need a great short connection wirelessly. 5G can offer you much higher quality for longer distances, but I don't actually think this is how it'll be used. I still believe that the bulk of the high quality transmission will be fiber for very long distances. It's not like it would make sense to do that wireless if you don't have to.
Anthony Scaramucci: (29:32)
So before I turn it over to John Darsie and the ton of audience questions that are coming in. I've got a question about one of your books, being ageless. Basically, you wrote a terrific book. You gave a copy of it to my wife and I. And the title of it, it's called Becoming Ageless. Bill Maher, the American comedian, Strauss, he's a friend of mine, he's my nutritionist. And he basically told me three words that I should abide by as my nutritionist. And I'll tell you what he said, "Don't eat bread." That's his whole nutritional mantra. But you wrote a great book, you're living that book. You look about 15 to 25 years younger than you actually are. So I won't give up your age, but tell me something that we can share with our SALT delegates that they should be doing for their health and their wellbeing.
Strauss Zelnick: (30:32)
Well, first of all, I'm not shy about my age. I'm 63 and older than you, Anthony. And I'm not wiser, just older. And in terms of what I recommend-
Anthony Scaramucci: (30:43)
Cut Strauss's video, Darsie. You are my friend now. Can you cut his video, please?
Strauss Zelnick: (30:49)
So the first is, what is it that you want? So if you're happy with your current lifestyle, then the answer is don't do anything differently. But if you want to live as healthier life as you can, you can affect your health span. It's actually somewhat hard to do affect your lifespan. Even if you do everything right, you may not really affect your lifespan depending on your genetics or just serendipity. Terrible things can happen or good things can happen. But first and foremost, if you want to have a good health span and a good lifespan, there are a couple of things you don't do. Like, don't smoke. That is the factor most highly correlated with a short, bad life, is smoking. So don't smoke. Second factor most highly correlated with a shorter worst life is alcohol abuse, believe it or not.
Strauss Zelnick: (31:37)
So those two things, if you stop smoking, if you smoke, we can stop there. That's such a game changer. If you drink too much alcohol and you just drink less, that's a meaningful game changer. Now, beyond that, what steps can you take? And you talked about diet. We all kind of know what we should and shouldn't eat. I don't agree that don't eat bread is a whole answer. Because if you're saying, good, I'll stop eating bread, but I'm going to have 14 diet cokes a day. That's not going to go so well for you. So we know what's bad for us, we know what's good for us. And whole foods, staying away from processed foods, not drinking soda, not drinking fruit juice, which is just sugar and eating plenty of fresh fruits and vegetables, lean protein and limiting your processed carbs. That's probably a pretty good diet.
Strauss Zelnick: (32:25)
The second piece of advice is go to the doctor and do what the doctor says. Whenever people say, "Oh, I never go to the doctor. I don't need to. It's totally fine." You know what? It's not totally fine. You're making a terrible decision because there are a few illnesses for both men and women that are easily detectable. And if you happen to have them, if they're detected early easily curable, and if they're not detected early, they will kill you. For example, colon cancer. So if you don't go to the doctor and you don't have the appropriate tests, you could get that, not know you have it and it'll kill you. So go to the doctor, do what the doctor says. Another characteristic associated with a long, healthy life is actually taking the medication that is prescribed to you.
Strauss Zelnick: (33:05)
The third is move, some kind of exercise. I am a fanatic. You don't need to be a fanatic, but you should try to move five days a week. If all you do is walk for half an hour, a day, five days a week. That's great exercise. It's a great start. You want to do more than that, you're going to more than that. And finally, have some kind of spiritual life. Some kind of connection with other people, some kind of connection to the world outside of you. And whether that takes the form of religious practice, or meditation practice, or a yoga practice, or perhaps taking a walk quietly, or reading, or sitting quietly, but have some kind of spiritual life preferably that connects you to like minded people. Those things taken as a whole, I think will lead you to a healthier and better, longer life.
Strauss Zelnick: (33:53)
And when I say becoming ageless, by the way, no, I don't think I look 20 or 25 years younger, although thank you, Anthony. But I feel like I'm 25 years old. I try to operate as though I'm 25 years old. And I feel just great. And if I can continue to feel this way, it allows me to be my best self in every part of my life. My relationships, my work, my fitness, my leisure and it allows me to hold up well under stress too. So that's what I advocate [crosstalk 00:34:27], but for some people, honestly, they're just happy the way it is and God bless them. That's fine.
Anthony Scaramucci: (34:31)
I'm just letting you know the Botox stash that I have in my garage, none for you, Strauss. But I'm going to turn it over to John Darsie. And by the way, I really do want to recommend this book because it is a game changer and I will attribute a lot of my exercise regime to what I read in Becoming Ageless, just in terms of making it a priority like you would a meal, or savings, or investing, or spending time with family, you got to make yourself a priority during the day as it relates to exercise. So with that, let's turn it over to John Darsie. Who's got a ton of audience questions for you, Strauss.
John Darsie: (35:11)
The Botox is a very... it's a very important part of Anthony's mental health routine. He's very vain, and when he looks at the camera-
Anthony Scaramucci: (35:19)
It's just like Darsie reads Playboy for the articles, Strauss. I use Botox for my migraines. I just want to make sure everybody knows that. Okay? Go ahead, Darsie. Go ahead.
John Darsie: (35:30)
So we have a question about virtual reality and augmented reality. You talked about you're on an iPad, you have an iPhone, it's a super computer, but those, if you look 30 years into the future, our grandkids or our kids might look at us and say, wow, you used to use an iPhone? That seems very archaic way to access the internet or game or to interact with people. What types of forms do you think gaming and entertainment might take over that type of time period? Let's say 20 to 30 years. Are we going to see true augmented reality? We've seen some startups like Magic Leap that have gotten a lot of hype, but haven't really delivered. At least on a consumer level, we've seen some virtual reality like Oculus and others having quite delivered on their initial promise, but... And then you have people like Elon Musk who think we're going to implant chips in our brain. We're going to basically live experiences through our mind. What do you expect that form factor to look like?
Strauss Zelnick: (36:26)
So it's really hard to predict 30 years in the future. I mean, I think the only thing that is predictable is it will be very, very different than what we have today. And I wouldn't be at all surprised if we have certain devices implanted in ourselves. Virtual reality, what that conjures up today now is a vision and hearing occluding headset, where you embark in a world that is created for you and you move around that world. And no, I don't think that's the future of entertainment at all. First of all, it's solitary. We don't like to consume entertainment of solitary way. Second, it requires dedicated space. Third, it's really expensive. Fourth, it makes you not nauseated. And that's a real problem because nausea and entertainment, they don't really go together so well. So I don't really believe in the current expression of virtual reality is the future of entertainment, but I wouldn't rely on anything for 30 years from now.
Strauss Zelnick: (37:19)
Augmented reality means adding characters to the setting that you're currently in. Pokemon Go is a great example of that, it can be a lot of fun. Properly executed, I think that could be a great opportunity, but I don't think it will redefine the business any more than 3D redefine motion pictures. Or even frankly, any more than color redefined motion pictures. It was there, it was a tool. Great. It didn't give any company in particular leg up. So the end of the day, we like to tell stories and told stories and linear entertainment will always do that and will always exist in one form or another. And we like to compete and play games and interactive entertainment will exist for that purpose as well. And there'll be some merging of the two.
Strauss Zelnick: (38:05)
And I have zero doubt that the form factor for the devices on which we consume these properties will change and become lighter, quicker, cheaper, more convenient. But at the end of the day, storytelling has been around for a really, really long time. And playing games has been around for a really, really long time. And I suspect that won't really change. And music has been around for a really long time. Those core parts of the entertainment business won't change. Their expression will change greatly and our job as an enterprise is in fact to be at the forefront of that change and to try to innovate. And that's what we're trying to do with Take-Two and more broadly with ZMC. We'll see how we do.
John Darsie: (38:47)
So remote work is one of these mega trends that's been accelerated by the pandemic. You've seen stocks like Zoom, go to the moon and others who are enabling remote work. You're seeing big companies, Goldman Sachs recently indicated they're going to move some of their asset management business down from New York to Florida because of more favorable business climate down there. How do you think the gamification of work might play out in an environment where you're seeing more people work remotely? Obviously there's pluses and minuses to having people work in a decentralized setting. And one of the minuses is lack of interpersonal interaction and team building setting that you get in person. So how can we use things like virtual communities or video games or gamification to take some of the interpersonal interaction that you would normally get in an in-person setting and transfer it to a remote work environment?
Strauss Zelnick: (39:43)
Well, I mean, people are doing conference calls inside Red Dead online and inside Grand Theft Auto online, for example. That'd be I think, an example of what you're talking about, but I actually don't think the world is going to shift to total remote working. I think the companies that are saying, oh, we don't care if people work from home endlessly, that's fine. Or maybe we can pay them less if they do or we'll cut our real estate footprint. I don't think that is going to make any sense at all. I think you lose the ability for serendipitous interactions and team building. And the fact that you're able to do something when pressed to do it does not mean it's a great idea to do it all the time. What I do think will permanently change is first a willingness to understand that at times remote work can make sense.
Strauss Zelnick: (40:27)
Secondly, I think we are all going to be less likely to travel. I think we're going to say what, that trip that I thought I had to make, I can probably do those meetings via Zoom more frequently than before, but I don't think it will get rid of business travel at all. So for example, I think you'll still have a SALT Conference in Las Vegas when you can because I mean, it's to get people together and that's how you build connection and community. And I'll be there if I'm invited because I think it'll be fun. But I don't think you need to do SALT Talks in person five days a week. I think you can do this very effectively on Zoom.
Strauss Zelnick: (41:04)
So I think you'll see a move ahead where both will be true. We will be able to work remotely when necessary. We will primarily still work together in a physical setting because that allows for all kinds of unexpected and unscheduled interactions, it can yield great things. We'll still travel when necessary, but we may do so more selectively. And I think that is an acceleration of a pre-existing trend, but to believe it goes all the way to the other side, we need to ask ourselves, how do we gamify that thing that went to the other side? I'm going to beg the question and say, we're not going all the way to the other side in the first place.
John Darsie: (41:41)
So I'll leave you with one final question, it's something we like to ask CEOs. And you've led a lot of very successful companies, you invest in successful companies and you've obviously, catapulted your company during this work from home period as a result of the pandemic. What leadership qualities do you think are important when an organization is tested with a curve ball, like we saw come out of nowhere with a global pandemic that causes everyone to be basically quarantined in their homes for the better part of a year?
Strauss Zelnick: (42:10)
Well, first preparation. My prayer is not a business plan. The reason that Take-Two was so effective in this pandemic is that we have an incredible IT department run by Scott Belmont that had been totally focused at great expense on disaster preparation. And they were ready to do work from home test in early March and then guess what? Everyone had to work from home. We were able to roll out work from home in a week. We had 6,500 people, seven days after starting working effectively from home on enterprise quality computer setups. We had invested in a backbone that allowed us to do that. So it's all... it's tempting to talk about leadership thing, words, but leadership is based in actions and we were prepared and we try to be prepared for any eventuality that can occur. Then once you get into that situation, I think leadership is always being a player coach, being right there with the team, being engaged, being concerned. And the other part of leadership is making decisions that are in service of the common good.
Strauss Zelnick: (43:19)
So I have peers who said, wow, we're a very big strong company, but you know what? This tough time, a lot of companies are firing people. You know what we're going to do? We're going to do a 20% across the board pay cut because we can. We didn't cut any salaries, we didn't furlough any people, we didn't use it as an opportunity to reduce any head count, but we have a compact with our colleagues that we're going to take care of each other. And one of the reasons that we've been disciplined and careful and ultimately successful is so that we can withstand tough times.
Strauss Zelnick: (43:50)
So we didn't see this as an opportunity to take a pound of flesh from our colleagues and we'll come out of this. And as a result of that, I think have even better morale than before and maintain our incredibly low attrition rates, which is coincidence with having a high degree of success. We've seen those companies who said, yeah, we cut our footprint, we cut our costs, we cut our salaries. Well, that's great. When things come back to normal, you tell me how loyal your teams are. So at the end of the day, leadership is about actions not words. The words only matter if they reflect the actions that you take. And finally, I think leadership is about empathy and kindness. Something that forms an enormous part of our mission.
John Darsie: (44:31)
Well, Strauss, that's a great way to end it. Thank you so much for joining us on SALT Talks. Anthony, do you have a final word for Strauss before we let him go?
Anthony Scaramucci: (44:38)
Well, I just want to... well, read out the two books that Strauss is an author of. So the first one, which was literally last one, Becoming Ageless, the one I read. I [inaudible 00:44:49] recommend everybody. And I'm going to be out there, Strauss buying Success, a concise guide to having the life you want as well. So those two great books from Strauss Zelnick. Thank you for joining us. And yes, I see a SALT Talk in your future on a live stage somewhere, Strauss. You're not going to be able to get away from us. And congratulations on all the success that I'm sure that your team's looking forward to the these new gaming console. So I'm sure that they're already taking good advantage of. So all the best [inaudible 00:45:19].
Strauss Zelnick: (45:19)
They are. Thanks so much for having me.
Anthony Scaramucci: (45:20)
Happy holidays [inaudible 00:45:22].
Strauss Zelnick: (45:23)
Great to see you all.
Anthony Scaramucci: (45:23)
[inaudible 00:45:23] soon.
Strauss Zelnick: (45:23)
Thanks, Anthony. Thanks, John.
John Darsie: (45:24)
And we're very excited too. We were talking before we went live and we were actually joking about it a few weeks ago, but Strauss has agreed to do a workout session under the SALT Talks banner. So he does... he leads workouts for the Take-Two team internally that are religiously attended by I think, several hundred employees at Take-Two. And he has graciously volunteered to embarrass us by leading a workout session that none of us will be able to keep up with. So we're very excited to do that in the coming weeks.
Strauss Zelnick: (45:54)
Thanks again, guys.
Anthony Scaramucci: (45:55)
All right.
John Darsie: (45:56)
Thank you.
Anthony Scaramucci: (45:56)
All the best.