In our ongoing coverage of the U.S. tariff situation and its potential effects on the gaming industry—from consoles and accessories to software—we've noted a range of reactions. Amidst general concern, Take-Two Interactive's CEO, Strauss Zelnick, appeared relatively unfazed by the prospect of tariffs 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 on Xbox Series consoles and the anticipated increase for the PlayStation 5—Zelnick provided a composed response. He acknowledged the complexity and unpredictability of the tariff landscape but expressed confidence in Take-Two's fiscal guidance for the coming 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 is rooted in the fact that most of Take-Two's upcoming releases are destined for platforms with established user bases. The potential impact of a few consumers deciding against purchasing a new Xbox Series, PS5, or even the upcoming Nintendo Switch 2 is minimal. Furthermore, 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 offerings, which are not subject to tariffs.
However, Zelnick acknowledges the fluid nature of the tariff situation. Over recent months, analysts have consistently highlighted the unpredictability of tariffs, a sentiment that even Zelnick concedes, leaving room for potential shifts.
In a pre-call discussion with Zelnick about Take-Two's quarterly performance, we also touched upon the development timeline for GTA 6 and its recent delay to next year. Additionally, we covered Zelnick's optimistic outlook on the upcoming Nintendo Switch 2 based on his comments during the Q&A session.
