The gaming world fired up by the extended look at Rockstar Games' GTA 6, which streamed on Netflix. Take-Two Interactive expects Take-Home to take home $8.2 billion in net bookings over the next fiscal year, largely driven by the game. but the industry's momentum stretches far beyond one franchise. As of August 4th, Electronic Arts is no longer a publicly traded company after being taken private in a $55 billion sale. Now the deal brings together Saudi Arabia's sovereign wealth fund with key US VC players like Jared Kushner's affinity partners. Joining us to break all of this down is Krish Huish who is president of Xsolla and also author of Durable Advantage, Five Pillars of the Modern Game Business. Chris, good afternoon. Thank you so much for joining us. So let's start off with the $55 billion deal to take EA private. Now this did involve players such as Saudi Arabia's Public Investment Fund, Silverlake and Jared Kushner's affinity partners. So what does this mega deal show about the growth in gaming?
So this is the largest take private deal in history. And I think it really shows that smart capital, sovereigns, all the people looking at the games industry are really recognizing that this industry is built to last and has evolved beyond just a hit driven business. And that the modern games industry truly is a durable business that can last for the long term and generate significant revenue over the long term.
And Chris, while I have you here, I do want to get your take on Web3. So adoption has been slow for everyday users as well as companies, but how is Web3 integrating with gaming and how is blockchain providing gamers with a whole new world of opportunity out there?
So Web3 really unlocks a lot of functionality that is important to how the games industry is evolving. As the industry continues to evolve from that hit-driven business going through third-party platforms to an industry that is more diversified, more involved with a direct relationship with players, we're finding that players really are looking to get more value out of the gaming ecosystem. And Web3 provides a lot of the functionality that can make that happen. It allows for players to have persistent identities, to take control of their own data, transport that across games, not just items and things like that, but it really impacts the behavioral side of it, how developers and publishers can understand their players and allow them to participate in the growing business itself.
And Chris, I do want to get your perspective on the regulatory outlook for gaming. So break down the outlook moving forward and also what moves can actually help shape the future of the industry.
So when it comes to regulations and regulatory bodies around the world that are taking more of an interest in games, I think it mirrors what we're seeing with what we just talked about, the transaction and how Smart capital is looking at games as more than just a hit driven business, but an ongoing venture that generates consistent revenue over time. For regulators, they're recognizing that games are really a major part of their digital economies. And as such, that brings regulation. People are looking at how are these games and these platforms impacting privacy, kids, commerce, monetary transactions, all of that. So as the industry has grown, that has brought regulatory oversight and insight in a number of places. But the real story is that this also represents just that maturity of the industry. And it creates real opportunity for game companies to further develop their relationships with their consumers in a much more compliant, a much more direct way than they have in the past. So, you know, it's not really about regulations kind of cramping any development or any growth. It's about companies understanding that these regulations will allow them to build a more direct, more sustainable relationship with their players all over the world.
And of course, I do have to ask you about GTA 6. So November is right around the corner and just before the holiday season, but there is this debate over physical ownership here and Rockstar Games is not offering physical discs for what could be the highest selling game ever. So where do you actually stand on this debate when it comes to physical ownership in this digital age? And why are gamers so adamant about having their own copies?
You know, I think there's always a bit of just a nostalgia factor of being able to hold on to the box, being able to keep it in your hands, something that a lot of gamers grew up used to. So while that is a sentiment that I understand, I think it really represents a small part of the audience. The truth is that the games that people have been buying through the retailers in box products have, even if they're on discs or cartridges, mainly can have to still connect to the internet and download the game anyway. So functionally, there's not much of a change. I see it more as just a behavioral thing where, you know, collectors love to have something that they can put on their shelf, which you still get, you can still get, you know, a box and a code. I'm sure this opens the door for many collector's editions and things like that. But GTA is going to be a massive success, a great moment for the industry. It should really re-engage a lot of people that have lapsed and bring a lot of awareness to this industry in the similar way that the deal with EA has recently done.
Yeah, and Chris, indeed, there is something to be said to having and owning an actual physical asset. But as we look ahead, how do you see artificial intelligence as well as virtual reality shaping the gaming industry? And how interactive do you expect video games to become as we move forward?
So this is one of the great things about games why I love this industry is it really is always evolving, it's at the forefront of new technologies. I've done a lot of work in virtual reality myself, two of the best, most successful games in VR I was involved with which was a real pleasure, incredibly immersive. But at the same time, it is a segment of the market that remains niche. There's a lot of friction when it comes to the hardware and the devices. And that'll continue to evolve over time. The experience is amazing. So I think there is a good future for it within a certain segment of gamers. But AI is certainly the bigger story. And I know you've been talking about that constantly. So it affects all of us. I just got back from Gamescom where AI continued to be a topic of conversation. What we're seeing now is that it really has moved from the early phase of people not quite understanding it and being fearful of it to a phase now where there are a lot of use cases of how developers and businesses can utilize AI. So it's not so much now the fear that I see being part of the conversation. It's more, OK, how do we take this and actually scale it? Because we've seen it used. Chinese developers predominantly use AI in their work streams. We see AI. I spoke with a data analytics company that is using it to really shift into behavioral analytics to go deeper with the data. We know it's part of workflows, work streams. There's a lot of use cases. And now it really is going to be about maturing those use cases and being able to train up your workforce to do more work, better work than they ever could before.
Well, Chris, we will have to leave it there for today, but it does sound as though there's a lot to look forward to when it comes to gaming. So I appreciate your time today and thank you so much for sharing all of your insights.
Thank you for having me.
