Take-Two 'Reasonably Confident' Amid Tariff Changes

In recent discussions about the impact of the ongoing tariff disputes in the United States on the gaming industry, from consoles to accessories and software, there's been a range of reactions. While some are deeply concerned about potential effects on both consumers and businesses, Take-Two Interactive's CEO, Strauss Zelnick, appeared relatively unfazed during a recent Q&A session with investors.

When asked about potential console price increases and their impact on the gaming ecosystem—specifically referencing the recent price hike for Xbox Series consoles and the anticipated increase for the PlayStation 5—Zelnick expressed confidence in Take-Two's fiscal projections for the coming year. He stated:

"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 games are slated for platforms that already have a significant user base. The potential impact of a few consumers choosing not to purchase new consoles like the Xbox Series, PS5, or the forthcoming Nintendo Switch 2 is minimal for Take-Two. Moreover, a substantial portion of the company's revenue is derived from digital purchases within ongoing games such as GTA V, Red Dead Redemption 2, and their mobile business, which are not directly affected by tariffs.

However, Zelnick acknowledges the unpredictable nature of the tariff situation, which remains fluid and subject to change. Analysts we've consulted over the past few months have consistently highlighted the ever-shifting landscape of tariffs, a sentiment echoed by Zelnick himself.

In a pre-call interview, we discussed Take-Two's recent quarterly performance with Zelnick, touching on the development timeline for GTA 6 and its recent delay to next year. Additionally, we covered Zelnick's comments during the Q&A regarding the Nintendo Switch 2, and why he remains optimistic about its upcoming launch.