In recent discussions about the impact of U.S. tariff fluctuations on the gaming industry, from consoles and accessories to software, varying levels of concern have been expressed by industry leaders. However, Take-Two Interactive's CEO, Strauss Zelnick, displayed a calm demeanor regarding potential tariff impacts during today's investor Q&A session.
When questioned about the possible effects of console price increases on the gaming ecosystem—particularly in light of the recent Xbox Series price hike and anticipated PlayStation 5 increase—Zelnick remained unruffled. He emphasized that Take-Two's financial projections for the upcoming ten months are 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."
Zelnick's confidence is grounded in the fact that most of Take-Two's upcoming releases are slated for platforms with established user bases. He noted that fluctuations in sales of new consoles like the Xbox Series, PS5, or even the upcoming Nintendo Switch 2 are unlikely to significantly impact their business. Additionally, a significant portion of Take-Two's revenue is derived from digital sales within ongoing titles such as GTA V, Red Dead Redemption 2, and their mobile games, which are not directly affected by tariffs.
Despite his confidence, Zelnick acknowledged the inherent unpredictability of the tariff situation. Analysts have consistently highlighted the fluid nature of tariffs, a sentiment that Zelnick echoed, indicating that while he remains optimistic, he is prepared for potential shifts.
In a pre-call discussion with Zelnick about the company's recent quarterly performance, we also touched on the development timeline for GTA 6, which has been delayed to next year. Additionally, Zelnick shared his positive outlook on the forthcoming Nintendo Switch 2, further detailing his thoughts during the Q&A session.
