Take-Two 'Reasonably Confident' Amid Tariff Changes

In our recent coverage of the U.S. tariff situation and its potential impact on the gaming industry, we've explored various angles—from consoles and accessories to software. While many industry observers are expressing concern over how these tariffs might affect both consumers and businesses, Take-Two Interactive's CEO, Strauss Zelnick, appeared relatively unfazed during today's Q&A session with investors.

During the call, Zelnick was specifically asked about his views on possible console price hikes and their broader effects on the gaming ecosystem. This query was prompted by the recent price increase of Xbox Series consoles and the anticipated rise for the PlayStation 5. Despite the ongoing tariff uncertainties, Zelnick remains confident in Take-Two's financial projections for the upcoming year.

"Our guidance covers the next ten months, the remainder of our fiscal year," Zelnick explained. "Given the fluctuating nature of tariffs, it's challenging to predict their final impact. However, we are reasonably confident that our forecasts won't be significantly affected unless tariffs take a drastic turn from what we currently anticipate. Moreover, there's a substantial existing user base for all our target platforms, except for the pre-launch Nintendo Switch 2. This gives us a solid understanding that any tariff-related changes wouldn't greatly impact us."

Zelnick's confidence stems from the fact that most of Take-Two's upcoming releases will be available on platforms that consumers already own. The potential shift in sales of new consoles like the Xbox Series, PS5, or even the upcoming Nintendo Switch 2 won't drastically affect their business model. Additionally, a significant portion of Take-Two's revenue is generated from digital sales within ongoing titles such as GTA V, Red Dead Redemption 2, and their mobile gaming segment, which are not influenced by tariffs.

Despite this confidence, Zelnick acknowledges the fluidity of the tariff situation. We've consulted with analysts over the past few months, and they've consistently pointed out the unpredictability and constant flux of the tariff landscape—a perspective that Zelnick himself acknowledges, leaving room for potential adjustments.

In a separate discussion with Zelnick before the investor call, we delved into Take-Two's quarterly performance and the development timeline for GTA 6, which has recently been delayed to next year. We also covered Zelnick's optimistic outlook on the upcoming Nintendo Switch 2, based on his comments during the Q&A session.