The ongoing tariff situation in the United States continues to be a topic of concern within the gaming industry, affecting everything from consoles to accessories and software. However, during a recent Q&A session with investors, Take-Two Interactive's CEO, Strauss Zelnick, displayed a calm demeanor regarding the potential impacts of these tariffs. When queried about his concerns over possible console price hikes and their ripple effects across the gaming ecosystem—specifically referencing the recent price increase of Xbox Series consoles and the anticipated rise for the PlayStation 5—Zelnick remained unruffled.
Zelnick explained that Take-Two's fiscal guidance for the upcoming ten months is solid, despite the unpredictable nature of tariffs:
"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."
His confidence stems from the fact that most of Take-Two's upcoming game releases are targeted at platforms with established user bases. The potential for a few consumers to either purchase or forego buying new consoles like the Xbox Series, PS5, or the upcoming Nintendo Switch 2 is unlikely to significantly impact Take-Two's business. Moreover, a significant portion of the company's revenue is derived from digital sales in ongoing games such as GTA V, Red Dead Redemption 2, and their mobile operations, which remain unaffected by tariffs.
Nevertheless, Zelnick acknowledges the fluidity of the situation. Industry analysts have repeatedly emphasized the unpredictable nature of tariffs over recent months, a sentiment that even Zelnick concedes. Prior to the investor call, we had the opportunity to discuss with Zelnick about Take-Two's quarterly performance, including insights into the development timeline of GTA 6 and its recent delay to the next year. Additionally, we covered Zelnick's optimistic outlook on the Nintendo Switch 2, as mentioned during the Q&A session.
