Take-Two 'Reasonably Confident' Amid Tariff Changes

The ongoing tariff situation in the United States has been a topic of concern within the gaming industry, affecting everything from consoles to accessories and software. However, Take-Two Interactive's CEO, Strauss Zelnick, expressed a calm demeanor regarding the potential impacts of tariffs during a recent Q&A session with investors. When asked about the possibility of console price increases due to tariffs, particularly in light of the Xbox Series price bump and anticipated PlayStation 5 increase, Zelnick remained confident in Take-Two's fiscal outlook.

Zelnick highlighted that Take-Two's fiscal guidance for the next ten months is robust and unlikely to be significantly affected by tariffs, unless they deviate dramatically from current expectations. He emphasized the company's strong position, noting that the majority of their upcoming game releases are targeted at platforms with an already substantial install base. This includes platforms like the Xbox Series, PS5, and the upcoming Nintendo Switch 2, which is still in the pre-launch phase. According to Zelnick, the existing user base of these consoles provides Take-Two with a clear market insight, mitigating the potential impact of any tariff-induced price changes.

A significant 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 directly affected by tariffs. This diversified revenue stream further bolsters Zelnick's confidence in the company's resilience against tariff fluctuations.

Despite his optimism, Zelnick acknowledged the unpredictable nature of tariffs, a sentiment echoed by industry analysts who have consistently described the situation as ever-changing. This acknowledgment reflects a cautious approach, recognizing that while Take-Two is well-positioned, the broader market remains subject to the uncertainties of international trade policies.

In addition to discussing tariffs, Zelnick provided insights into other aspects of Take-Two's operations during the investor call. He touched on the development timeline for GTA 6, which has been delayed to next year, and expressed optimism about the upcoming Nintendo Switch 2, indicating a positive outlook for the company's future endeavors.