In recent discussions about the impact of ongoing tariff issues in the United States on the gaming industry, from consoles to accessories and software, a variety of opinions have emerged. While some express concern over potential effects on both consumers and businesses, Take-Two Interactive's CEO, Strauss Zelnick, appeared notably unconcerned during today's Q&A session with investors.
When asked about his thoughts on potential console price hikes and their impact on the gaming ecosystem—particularly in light of the recent Xbox Series price increase and anticipated PlayStation 5 price rise—Zelnick remained confident. He addressed the uncertainty around tariffs but emphasized that Take-Two's financial forecasts for the upcoming fiscal year are robust:
"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 game releases will target platforms that already have a significant user base. He noted that shifts in sales of new consoles like the Xbox Series, PS5, or the upcoming Nintendo Switch 2 would not significantly impact their business. Moreover, a large portion of Take-Two's revenue is generated from digital sales within established games such as GTA V, Red Dead Redemption 2, and their mobile gaming division, which are not affected by tariffs.
Despite his confidence, Zelnick acknowledges the unpredictable nature of tariffs, aligning with the views of analysts who have consistently noted the ever-changing tariff landscape over recent months. This unpredictability is something even Zelnick is mindful of, leaving some room for potential changes.
In a pre-call discussion, we touched on various topics with Zelnick, including the development timeline of GTA 6 and its recent delay to next year. We also covered his optimistic outlook on the Nintendo Switch 2's release, as mentioned in his Q&A comments.
