Take-Two 'Reasonably Confident' Amid Tariff Changes

In recent discussions about the potential impact of the ongoing tariff situation in the United States on the games industry, Take-Two Interactive's CEO, Strauss Zelnick, displayed a notable level of confidence during a Q&A session with investors. Amid concerns over how tariffs might affect console prices and the broader gaming ecosystem, Zelnick addressed questions regarding the recent price increase of Xbox Series consoles and the anticipated rise for the PlayStation 5.

Zelnick acknowledged the uncertainty surrounding tariffs but emphasized that Take-Two's fiscal guidance for the next ten months remains solid. He explained:

"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 releases will be available on platforms that consumers already own. Minor fluctuations in sales of new consoles like the Xbox Series, PS5, or the upcoming Nintendo Switch 2 are unlikely to significantly impact Take-Two's performance. 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 gaming segment, which are not directly affected by tariffs.

Despite this assurance, Zelnick did not downplay the unpredictable nature of the tariff situation. Analysts have consistently highlighted the ever-changing landscape of tariffs, a sentiment that Zelnick himself echoed, indicating that while Take-Two feels prepared, the situation remains fluid.

In a separate interview with Zelnick before the investor call, we delved into Take-Two's recent performance and discussed the development timeline for GTA 6, which has been delayed to next year. Additionally, Zelnick shared his optimism regarding the upcoming Nintendo Switch 2, reflecting his belief in its potential success.