Take-Two 'Reasonably Confident' Amid Tariff Changes

In recent discussions about the ongoing tariff issues in the United States and their potential impact on the gaming industry, Take-Two Interactive's CEO, Strauss Zelnick, appeared notably unfazed during today's Q&A session with investors. The topic of tariffs, particularly their effect on console prices and the broader gaming ecosystem, was brought up in light of recent price increases for Xbox Series consoles and anticipated hikes for the PlayStation 5.

Zelnick addressed these concerns by emphasizing the stability of Take-Two's fiscal projections for the next ten months. He acknowledged the unpredictability of tariffs but expressed confidence that their current guidance would remain largely unaffected, unless there were significant and unforeseen changes in tariff policies. He noted, "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 are targeted at platforms with existing large user bases. The potential impact of a few consumers opting in or out of purchasing new consoles like the Xbox Series, PS5, or the upcoming Nintendo Switch 2 is minimal. Additionally, a significant portion of Take-Two's revenue is derived from digital sales within ongoing games such as GTA V and Red Dead Redemption 2, as well as their mobile gaming sector, none of which are directly affected by tariffs.

Despite this optimism, Zelnick acknowledged the fluid nature of the tariff situation, echoing sentiments from industry analysts who have described the tariff environment as constantly evolving and unpredictable. This leaves even a seasoned CEO like Zelnick open to the possibility of future shifts.

In a separate conversation before the investor call, Zelnick discussed Take-Two's quarterly performance and provided updates on the development timeline for GTA 6, which has been delayed to next year. Additionally, he shared his positive outlook on the upcoming Nintendo Switch 2, further highlighting his confidence in the company's future amidst the tariff uncertainties.