Recent discussions have centered around how the ongoing tariff disputes in the United States could affect the gaming industry, spanning from consoles to accessories and software. While some industry observers express concern about the potential impacts on both consumers and businesses, Take-Two Interactive's CEO, Strauss Zelnick, appeared unfazed during today's Q&A session with investors.
When queried about his concerns regarding potential console price increases and their broader implications for the gaming ecosystem—particularly in light of the recent price adjustments to Xbox Series consoles and anticipated increases for the PlayStation 5—Zelnick remained steadfast. He acknowledged the tariff situation's volatility but emphasized that Take-Two's fiscal projections for the next ten months remain solid:
"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 the majority of Take-Two's upcoming releases are targeted at platforms with established user bases. The potential impact of a few consumers deciding to purchase or forego an Xbox Series, PS5, or even the upcoming Nintendo Switch 2 would be minimal. Moreover, a significant portion of Take-Two's revenue is generated through digital sales in ongoing titles such as GTA V, Red Dead Redemption 2, and their mobile gaming sector, which are not subject to tariffs.
However, Zelnick acknowledges the inherent unpredictability of the situation. Analysts we've consulted over the past few months have consistently highlighted the ever-changing nature of tariffs, a sentiment echoed by Zelnick himself, who leaves room for potential shifts.
In a pre-call interview with Zelnick, we delved into Take-Two's quarterly performance and touched upon the development timeline for GTA 6, which has faced a delay into next year. Additionally, Zelnick shared his optimistic outlook on the upcoming Nintendo Switch 2 during the Q&A, further discussing its anticipated impact on the market.
