Take-Two Confident in Avoiding Tariff Impact

In recent discussions about the impact of U.S. tariffs on the gaming industry, from consoles to accessories and software, Take-Two Interactive's CEO, Strauss Zelnick, expressed a calm demeanor during a Q&A session with investors. Despite concerns about potential price increases on gaming consoles, such as the recent Xbox Series price bump and the anticipated rise for the PlayStation 5, Zelnick remains confident in Take-Two's fiscal outlook for the next ten months.

Zelnick highlighted the difficulty in predicting the trajectory of tariffs, given their volatility. However, he assured investors that Take-Two's guidance would remain largely unaffected unless tariffs deviate significantly from current expectations. He emphasized the substantial existing user base for their target platforms, except for the upcoming Nintendo Switch 2, which is still in the pre-launch phase. This established install base gives Take-Two a solid foundation, minimizing potential impacts from console price fluctuations.

A key factor in Zelnick's confidence is the nature of Take-Two's upcoming releases. Most of their games will launch on platforms that consumers already own, reducing the impact of new console purchases. 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 subject to tariffs.

Despite this assurance, Zelnick acknowledges the unpredictable nature of tariffs, a sentiment echoed by numerous analysts who have consistently noted the fluidity of the situation. In a pre-call interview, Zelnick also discussed the development timeline for GTA 6, which has been delayed to next year, and shared his optimism regarding the upcoming Nintendo Switch 2.

For more insights into the gaming industry and the latest updates, including Zelnick's perspectives on GTA 6 and the Nintendo Switch 2, stay tuned to our coverage.