Take-Two 'Reasonably Confident' Amid Tariff Changes

In recent discussions about the potential impacts of the ongoing tariff situation in the United States on the gaming industry, there's been a mix of concern and confidence. While many in the industry worry about the effects on everything from consoles to accessories and software, Take-Two Interactive's CEO, Strauss Zelnick, appeared relatively unconcerned during today's Q&A session with investors.

When asked about the potential for console price increases and their impact on the gaming ecosystem—specifically referencing the recent price hike for Xbox Series consoles and the anticipated increase for the PlayStation 5—Zelnick remained steadfast. He pointed out that Take-Two's fiscal guidance for the next ten months is solid, despite the unpredictability of tariffs:

"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 that already have a significant user base. The decision of a few consumers to purchase or not purchase an Xbox Series, PS5, or even the upcoming Nintendo Switch 2 would not significantly impact Take-Two's performance. Additionally, a large portion of the company's revenue is generated from digital purchases within ongoing titles such as GTA V, Red Dead Redemption 2, and its mobile offerings, which are not directly affected by tariffs.

However, Zelnick acknowledges the fluid nature of the tariff situation. Over the past few months, we've consulted with industry analysts who consistently describe the tariff environment as ever-changing and unpredictable, a sentiment that even Zelnick echoes, leaving room for potential shifts.

In preparation for the investor call, we had the opportunity to speak with Zelnick about the company's performance over the recent quarter. Our conversation also touched on the development timeline for GTA 6 and its recent delay to next year. Additionally, we covered Zelnick's comments on the upcoming Nintendo Switch 2, and why he remains optimistic about its launch.