Take-Two 'Reasonably Confident' Amid Tariff Changes

The ongoing tariff situation in the United States has sparked considerable discussion about its potential impact on the gaming industry, affecting everything from consoles to accessories and software. While many industry observers express concern over how these tariffs could affect both consumers and businesses, Take-Two Interactive's CEO, Strauss Zelnick, appeared relatively unconcerned during a recent Q&A session with investors.

As the conversation drew to a close, Zelnick was directly questioned about his views on potential console price increases and their broader effects on the gaming ecosystem. This inquiry was prompted by recent price adjustments to the Xbox Series consoles and anticipated increases for the PlayStation 5. Despite the uncertainty surrounding tariffs, Zelnick expressed confidence in Take-Two's fiscal projections for the upcoming year:

"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 decision of a small number of consumers to purchase or not purchase an Xbox Series, PS5, or even the upcoming Nintendo Switch 2 is unlikely to significantly impact Take-Two's performance. Furthermore, a large portion of Take-Two's revenue is derived from digital sales within ongoing titles such as GTA V, Red Dead Redemption 2, and their mobile offerings, which are not subject to tariffs.

However, Zelnick acknowledges the unpredictability of the tariff situation. Over the past few months, analysts have consistently described the tariff environment as volatile and difficult to forecast, a sentiment that Zelnick himself echoed, indicating that even Take-Two's projections leave room for potential adjustments.

In an interview before the investor call, Zelnick provided insights into Take-Two's quarterly performance and touched upon the development timeline for GTA 6, which has been delayed to next year. Additionally, he shared his optimistic outlook regarding the upcoming Nintendo Switch 2, further discussed in our coverage of his Q&A comments.