Take-Two 'Reasonably Confident' Amid Tariff Changes

In recent discussions about the impact of the ongoing tariff situation in the United States on the gaming industry, from consoles to accessories and software, there's been a mix of concern and optimism. Take-Two Interactive's CEO, Strauss Zelnick, expressed a notably calm perspective during a recent Q&A session with investors, despite the potential for tariff-induced price increases on gaming consoles.

The conversation turned to the topic of console pricing when Zelnick was asked about his concerns regarding the recent price hike of Xbox Series consoles and the anticipated increase for the PlayStation 5. His response was reassuring, focusing on Take-Two's fiscal stability:

"Our guide is for the next ten months, essentially, that's the part of the fiscal year that hasn't elapsed yet, and it's very difficult to predict where tariffs will land, given how things have bumped around so far. We feel reasonably confident that our guide wouldn't be meaningfully affected, unless tariffs ran off in a very different direction than we currently expect. In any case, there's already a very substantial install base for all of our target platforms except Nintendo Switch 2, which is pre-launch. So we have, I think, enough insight that we wouldn't be affected by any changes."

Zelnick's confidence stems from the fact that most of Take-Two's upcoming game releases are targeted at platforms with well-established user bases. The potential impact of a few consumers deciding not to purchase a new Xbox Series, PS5, or even the upcoming Nintendo Switch 2 would be minimal. Additionally, a significant portion of Take-Two's revenue is derived from digital sales within ongoing games like GTA V, Red Dead Redemption 2, and their mobile offerings, which remain unaffected by tariffs.

However, Zelnick acknowledges the fluidity of the tariff situation, echoing the sentiments of industry analysts who have noted its unpredictable nature over the past few months. Even with his confidence, Zelnick leaves room for potential shifts in the tariff landscape.

Ahead of the investor call, we had the opportunity to speak with Zelnick about Take-Two's performance in the recent quarter. This discussion included insights into the development timeline of GTA 6 and its delay to the next year. Furthermore, Zelnick shared his optimism about the upcoming Nintendo Switch 2, highlighting his positive outlook for its launch.