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Shares of Take-Two Interactive are up; CEO explains next steps

Take-Two Q1 sales rise 13%

Shares of Take-Two Interactive popped nearly 2 percent on Friday after the video game developer narrowed its first-quarter losses to 46 cents per share from 81 cents per share, year over year.

Take-Two said it has benefited from allowing gamers to download digital copies of video games instead of the traditional model of purchasing discs. The shift resulted in higher margins that contributed to the company's 13 percent rise in revenue for the quarter.

The company reported that digital download accounted for 55 percent of revenue in the quarter.

CEO Strauss Zelnick joined CNBC's "Squawk on the Street " to share his strategy on continuing to "get it right" both creatively and commercially when it comes to Take-Two's future products.

"We're dropping in new content, we're dropping in virtual currency and we're tuning up the engagement," Zelnick said.

Zelnick also explained the evolving capabilities that come with online play and how it gives consumers the opportunity "to be a part of iterating and improving" the gaming experience."

Take-Two projects revenue between $1.75 billion and $1.85 billion for the year ending March 2017, well above analysts' expectations of $1.26 billion, according to a Thomson Reuters consensus estimate.

Shares of Take-Two Interactive have climbed more than 18 percent so far this year.