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, Take-Two Interactive's CEO, Strauss Zelnick, displayed a calm demeanor during today's Q&A session with investors. Amidst concerns about possible console price hikes, such as the recent increase in Xbox Series prices and the anticipated rise for the PlayStation 5, Zelnick remained unfazed.

During the call, Zelnick addressed a question about the potential effects of console price increases on the gaming ecosystem. He explained that Take-Two's financial projections for the next ten months are robust, despite the unpredictable nature of tariffs. He stated:

"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. He noted that the potential impact of a few consumers choosing not to purchase new consoles like the Xbox Series, PS5, or the upcoming Nintendo Switch 2 would be minimal. Additionally, a large portion of Take-Two's revenue is derived from digital sales within established games such as GTA V, Red Dead Redemption 2, and their mobile titles, which are not subject to tariffs.

However, Zelnick acknowledged the volatile nature of the tariff situation. Industry analysts have consistently pointed out the unpredictability of tariffs, a sentiment that Zelnick echoed, leaving room for potential shifts in the economic landscape.

In a pre-call interview, we delved into Take-Two's performance over the past quarter with Zelnick, touching on the development timeline of GTA 6 and its recent delay to next year. Additionally, we covered Zelnick's optimistic outlook on the upcoming Nintendo Switch 2, based on his comments during the Q&A session.