In recent discussions about the impact of U.S. tariffs on the gaming industry, from consoles to software, opinions vary widely. However, Take-Two Interactive's CEO, Strauss Zelnick, appeared relatively unconcerned during today's Q&A session with investors, particularly when addressing potential tariff-related console price increases.
The conversation touched on the recent price increase for Xbox Series consoles and the anticipated rise for the PlayStation 5. Despite the ongoing tariff fluctuations, Zelnick expressed confidence in Take-Two's fiscal projections for the next ten months. 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 releases will be available on platforms that consumers already own. He emphasized that 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 substantial portion of Take-Two's revenue is derived from digital sales in ongoing titles such as GTA V, Red Dead Redemption 2, and their mobile games, which are not affected by tariffs.
However, Zelnick acknowledged the unpredictable nature of tariffs, aligning with the views of industry analysts who have consistently described the situation as fluid and challenging to forecast. This uncertainty leaves room for potential shifts, even for a company as confident as Take-Two.
In a pre-call interview, Zelnick also discussed Take-Two's recent performance, including updates on the development timeline for GTA 6, which has been delayed to next year. Additionally, he shared optimistic views on the upcoming Nintendo Switch 2, reflecting his broader confidence in the company's strategic positioning amidst ongoing tariff concerns.
