In recent discussions about the potential impacts of the ongoing tariff situation in the United States on the games industry, concerns have been raised about how tariffs might affect everything from consoles to accessories and software. However, Take-Two Interactive's CEO, Strauss Zelnick, appeared relatively unfazed during a recent Q&A call with investors.
When asked about his concerns regarding potential console price increases and their impact on the gaming ecosystem, particularly in light of the recent Xbox Series price bump and the anticipated increase for the PlayStation 5, Zelnick remained confident. He noted that while the tariff situation is confusing and unpredictable, Take-Two's fiscal guidance for the next ten months remains solid.
"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 the majority of Take-Two's upcoming releases will be available on platforms that most gamers already own. The potential impact of a few consumers deciding not to purchase a new Xbox Series, PS5, or Nintendo Switch 2 would be minimal. Additionally, a significant portion of Take-Two's revenue is generated from digital purchases within ongoing games like GTA V, Red Dead Redemption 2, and its mobile business, which are not affected by tariffs.
Despite this confidence, Zelnick acknowledged the unpredictable nature of the tariff situation. Analysts we've consulted over the past few months have echoed this sentiment, highlighting the ever-changing landscape. Even Zelnick leaves room for potential shifts.
In a pre-call interview, we discussed Take-Two's quarterly performance with Zelnick, including the development timeline for GTA 6 and its recent delay to next year. We also covered his optimistic outlook on the upcoming Nintendo Switch 2, based on comments he made during the Q&A session.
