Take-Two 'Reasonably Confident' Amid Tariff Changes

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 unperturbed by the potential impact of tariffs during a recent Q&A session with investors.

When questioned about the possible rise in console prices and its effect on the gaming ecosystem, Zelnick referenced the recent price increase of the Xbox Series consoles and the anticipated rise for the PlayStation 5. Despite the uncertainty surrounding tariffs, Zelnick expressed confidence in Take-Two's fiscal projections for the upcoming year:

"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 be available on platforms that consumers already own. The potential impact of a few people deciding whether or not to purchase an Xbox Series, PS5, or Nintendo Switch 2 is minimal. Moreover, a significant portion of Take-Two's revenue is derived from digital sales within ongoing titles like GTA V, Red Dead Redemption 2, and their mobile business, which are not subject to tariffs.

However, Zelnick acknowledges that the tariff situation remains fluid and unpredictable. Analysts have repeatedly emphasized this point over the past few months, and even Zelnick concedes that there is room for unexpected developments.

In an interview prior to the investor call, we discussed Take-Two's performance over the quarter, including insights into the development timeline of GTA 6 and its delay to next year. Additionally, we covered Zelnick's comments on the upcoming Nintendo Switch 2 and his optimism regarding its launch.