Take-Two Optimistic About Avoiding Tariff Impact

The ongoing tariff situation in the United States has been a topic of concern for many in the gaming industry, affecting everything from consoles to accessories and software. However, Take-Two Interactive's CEO, Strauss Zelnick, appeared relatively unfazed by the potential impact of tariffs during a recent Q&A session with investors.

When asked about the potential for console price increases and their effect on the gaming ecosystem, particularly in light of the recent Xbox Series price hike and the anticipated increase for the PlayStation 5, Zelnick expressed confidence in Take-Two's fiscal guidance for the next ten months. He acknowledged the unpredictability of tariffs but emphasized that their current projections would remain largely unaffected unless tariffs took an unexpected turn:

"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 releases will target platforms that consumers already own. The potential impact of a few consumers deciding against purchasing new consoles like the Xbox Series, PS5, or the upcoming Nintendo Switch 2 is minimal. Moreover, a significant portion of Take-Two's revenue is derived from digital sales within ongoing games such as GTA V, Red Dead Redemption 2, and their mobile titles, which are not subject to tariffs.

Despite his confidence, Zelnick acknowledged the fluid nature of the tariff situation. Analysts have consistently highlighted the unpredictability of tariffs, a sentiment that Zelnick himself echoed, leaving room for potential shifts in the economic landscape.

In a pre-call interview, Zelnick discussed Take-Two's quarterly performance, including updates on the development timeline for GTA 6, which has been delayed to next year. Additionally, his comments on the upcoming Nintendo Switch 2 during the Q&A session reflect his optimism about its future release.